Micron and Intel create new company to manufacture NAND flash memory

Micron Technology Inc, and Intel Corporation have agreed to form a new company

to manufacture NAND flash memory for use in consumer electronics, removable storage and handheld communications devices. The new company will exclusively

manufacture product for Micron and Intel. 

The company, to be called IM Flash Technologies, LLC, brings together the manufacturing technology, assets, experience and scale necessary for Intel and



Micron to successfully compete in the NAND flash memory business. Micron has expertise in developing NAND technology and operating efficient manufacturing


facilities with Intel's multi-level cell technology in the flash memory business.

Additionally, Intel and Micron have each entered into separate long-term agreements to supply Apple with a significant portion of each of their share of

IM Flash Technologies' NAND flash memory output. As part of these agreements, Apple would prepay $250 million each to Intel and Micron.

"This strategic relationship positions both Intel and Micron to build on each other's strengths to become leaders in the fast-growing NAND market

segment," said Steve Appleton, Micron Chairman, President and CEO. 

"This enhances Micron's competitive position as a leading supplier of advanced semiconductor solutions by ensuring we better serve our customers in

the mobile communication and consumer electronics market segments." 

"The creation of this new company supports Intel's intent to maintain its industry-leading position in nonvolatile memory and enables us to rapidly enter



a fast-growing portion of the flash market segment," said Paul Otellini, Intel President and CEO.
Intel and Micron have agreed to initially contribute approximately $1.2 billion each in cash, notes and assets to IM Flash Technologies. Subject to certain

conditions, the parties will each contribute an additional approximately $1.4



billion over the next three years and intend to make additional investments as appropriate to support the growth of the operation.  

The company will be 51 percent owned by Micron and 49% owned by Intel. Production will initially take place in manufacturing facilities located in

Boise, Idaho, Manassas, Va. and Lehi, Utah. The new company will benefit from Micron's and Intel's process technology expertise to aggressively convert to

advanced 72nm and 50nm technology. Initial production from the company is expected in early 2006.

The management team for the new company will be led by Intel's Dave Baglee, who

previously served as manager of Intel's Fab 11 in New Mexico, and Micron's Rod Morgan, who most recently served as manager of Micron's fabrication facility in

Manassas.

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