The economic value for Micron from the sale is $1.5 billion, comprised of $900 million in cash from TI from the sales transaction, and approximately $600 million in value from select tools and other assets
Texas Instruments Incorporated (TI) (Nasdaq: TXN) has signed an agreement to acquire Micron Technology’s 300-mm semiconductor factory in Lehi, Utah, USA for $900 million. The Lehi fab will be TI’s fourth 300-mm fab, joining DMOS6, RFAB1 and soon-to-be-completed RFAB2 in TI’s wafer fab manufacturing operations.
“This investment continues to strengthen our competitive advantage in manufacturing and technology and is part of our long-term capacity planning,” said Rich Templeton, TI’s chairman, president and CEO.
In addition to its value as a 300-mm fab, the acquisition is a strategic move, as Lehi will start with 65-nm and 45-nm production for TI’s analog and embedded processing products and be able to go beyond those nodes as required.
“The Lehi fab is a great asset and a great team. We are excited about the engineering experience and technical skills the team brings in ramping and manufacturing advanced semiconductor processes,” said Kyle Flessner, TI’s senior vice president of technology and manufacturing.
The companies plan to complete the sale by the end of 2021. Related underutilization costs of about $75 million per quarter are expected in 2022. First revenue is expected in early 2023.
“We are pleased to have reached an agreement with Texas Instruments as it is an industry leader and truly values the talented Lehi team and the capabilities this site offers to deploy its technology effectively. We are greatly appreciative of the contributions that the Lehi team has made to Micron, as well as the collaboration and engagement Micron has had with the local community,” said Micron President and CEO, Sanjay Mehrotra.
The economic value for Micron from the sale is $1.5 billion, comprised of $900 million in cash from TI from the sales transaction, and approximately $600 million in value from select tools and other assets.
TI had reported fourth quarter revenue of $4.08 billion. The company noted that its net income in the quarter was $1.69 billion. The comppany had earlier stated that it was using 2008 financial crisis to model Q2 2020 outlook.
“With a COVID-19 recession likely upon us, and with reduced visibility of customer demand, we are using the 2008 financial crisis to model our second quarter outlook. To reflect the increased uncertainty, we have expanded the range of our guidance,” Templeton had shared earlier.
