Tue, Oct 14, 2008 - Page 12 News List

Nanya agrees to Inotera holdings plan

PARTNERSHIP A glut in supply has caused a 38 percent decline in third quarter DRAM prices, which a market researcher said went down 85 percent last year

By Lisa Wang  /  STAFF REPORTER

Nanya Technology Corp (南亞科技), the nation’s second-largest computer memory chipmaker, said yesterday it had agreed to Qimonda AG’s plan to sell its holdings in Inotera Memories Inc (華亞科技), a joint venture with Nanya, to Micron Technology Inc in a move that will strengthen its technological partnership with the US chipmaker.

Micron Technology, the world’s fourth-largest memory chipmaker, said it had signed a definitive agreement to acquire Qimonda’s 35.6 percent stake in Inotera, located in Taoyuan, for US$400 million in cash which would expand its partnership with Nanya, a company statement on Micron’s Web site said.

That puts an end to months of speculation about the fate of Inotera after Nanya turned to Micron, which belongs to a different technological camp to Qimonda, for technological support in March. Nanya, which also holds a 35.6 stake in Inotera, had priority status to buy the stake owned by Qimonda.

Munich-based Qimonda said yesterday that the sale of its Inotera stake would be a key step in a restructuring plan designed to cope with the severe industry downturn.

Shares in Inotera yesterday rallied to almost the 7 percent daily limit at NT$9.4, recovering from losses in early trading. Meanwhile, Nanya shares fell by the newly implemented 3.5 percent daily downward limit.

“We believe the deal [between Micron and Qimonda] will help Nanya obtain stronger technological support,” Nanya spokesman Pai Pei-lin (白培霖) said by telephone.

Early this year, Nanya formed a new venture with Micron in Taoyuan to make dynamic random access memory (DRAM) chips at a 12-inch fab using Micron’s technology.

“The deal will help ease the oversupply of DRAM chips in the short term, as output from Inotera will be reduced while it adjusts to making chips using technology from Micron,” said Rick Hsu (徐稦成), a senior research analyst at Nomura Securities Co Ltd’s Taipei branch.

A supply glut has caused a 38 percent decline in DRAM prices in the third quarter after prices dived 85 percent last year, Taipei-based market researcher DRAMeXchange Technology Inc (集邦科技) figures showed.

Inotera may see a decline in sales because of falling output before it benefits from a rise in combined market share with Micron, Hsu said.

Micron expects to complete the first stage of the purchase, during which it plans to buy 18 percent of Inotera for US$200 million in cash, within a week, the statement said.

The company will proceed with the second stage of purchase to complete the deal after receiving approval from the regulators, the statement said.

To help fund the purchase, Micron has obtained US$285 million in loan financing commitments from strategic sources at favorable terms, the company said.

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