Micron plans to spin off its CMOS image sensor (CIS) business and form an independent company. The rumors also note that private equity firm the Blackstone Group will invest in the new independent company although Micron will maintain control.

The spin-off is expected to be finalized by the end of 2007 at the earliest, according to the rumors, which also imply that after the spin off Micron will focus more on DRAM and NAND flash production.

The decision is being pushed by Micron's shareholders and expectations from the financial market, noted memory module makers, adding that most shareholders at Micron expect the company to focus more on memory products. The company's lack of clear direction on memory products has negatively affected the potential high growth of the CIS business, noted the memory module makers.

Micron may use the new funds from the private equity to expand its capacity for 12-inch plants, noted sources.

Micron's CIS business accounted for 15-20% of its revenues during the third quarter of 2007 while standard DRAM and NAND flash sectors accounted for 70% of overall sales, noted the sources.