Micron Technology Inc. said it would buy the 67% stake in Taiwan’s Inotera Memories Inc. it doesn’t already own for $4.1 billion, solidifying control over a major source of memory chips.

The deal, valued at $3.2 billion net of cash, was announced along with an additional deal to license manufacturing technology to Nanya Technology Corp., another major Inotera 3474, +10.00% investor based in Taiwan that is affiliated with Formosa Plastics Corp. Micron’s MU, +3.51% deal follows a spate of consolidation moves in the chip sector as well as moves by China to enter the memory market, an effort likely to require Chinese companies to tap foreign expertise.

Micron, based in Boise, Ida., is the last remaining U.S. maker of the chips called dynamic random access memories, or DRAMs, which are used in personal computer, smartphones and many other devices. The company has often boosted its production capacity by acquiring other manufacturers that exit the fiercely competitive market.

Inotera, founded in 2003, was formed as a joint venture of Nanya and Infineon Technologies AG. Micron in 2008 acquired the stake originally held by Infineon. Micron currently buys all of Inotera’s output, which accounts for about 35% of Micron’s DRAM production. The company said the new deal enables Micron to realize the full financial and operational benefit of Inotera’s business.

Micron will begin getting Inotera DRAMs at the cost of producing them rather than at a higher price that included a profit margin shared with other investors, said Doug Freedman, an analyst at Sterne Agee.

By: DocMemory
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