Micron Technology Inc. has acquired Avago Technologies' image sensor business in a deal valued at $53 million.

The move complements Micron’s existing presence in the CMOS image sensors market, giving the company an additional 2.5 percent stake, according to Lehman Brothers.

“Based on our checks, we believe Avago accounts for roughly 2.5 percent of the global CMOS image sensor market,” said Tim Luke, a managing director at the firm, in a research note this morning. “Therefore, assuming approximately 800 million units in annual image sensors sold, and an image sensor ASP of $2.50, we estimate Avago's annualized image sensor revenues at approximately $50 million.”

The acquisition also gives Micron Avago’s imaging team, made up of approximately 90 employees of which most are engineers, and select imaging products and intellectual property relating to the image sensor business.

“The Avago imaging team is one of the pioneering groups in CMOS imaging, and the talented team further bolsters Micron’s leading position in the industry,” said Bob Gove, VP of Micron’s imaging group, in a statement. “Micron image sensors are in one in three camera phones in the world today, and we’re advancing in other key imaging market segments including automotive, security, consumer electronics, medical applications and more. It’s an exciting time for us, and the Avago team will immediately strengthen our business potential.”

The acquisition further includes contingent payments payable to Avago if certain milestones are met.

Other acquisitions by the company of note in 2006 include Micron’s purchase of flash player Lexar Media Inc. in March. According to Lehman, more acquisitions may be on the way.

“We fully expect MU [Micron] to continue to explore strategic acquisition targets where possible, which we view constructively. However, we maintain our cautious view given intense competition at the low-end of the imaging segment (Samsung weighing on prices) and the push by Toshiba and potentially Samsung at the higher end. We also view lower Lexar revenues versus our estimates and continued NAND pricing pressure as near-term risks,” Luke said.

By: DocMemory
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