This past week, Micron Technology announced that it is planning to buy Intel’s stake in a flash memory joint venture that launched more than a decade ago. Specifically, Micron will be paying Intel $1.5 billion for its stake of the IM Flash Technologies joint venture.
According to MarketWatch, Micron SVP and CFO Dave Zinsner said that the company is going to pay for the buyout from free cash flow. Micron said that the plan to continue buying back shares in the company will continue despite this transaction.
“We ran the calculus whether that was a good deal and we think the (return on investment) on this is very good,” said Zinsner on a conference call via MarketWatch. And Zinsner pointed out that a total of $6 billion has been invested in IM Flash’s facility based out of Lehi, Utah.
Another reason why Zinsner said that this deal makes sense is that IM Flash’s Utah facility is located relatively close to Micron’s headquarters in Boise, Idaho. Plus IM Flash is the only fab in the world that makes 3-D XPoint technology. 3-D XPoint technology is a type of nonvolatile memory that helps improve storage performance and brings down the cost of server memory.
“Micron’s acquisition of IM Flash demonstrates our strong belief that 3-D XPoint technology and other emerging memories will provide a unique differentiator for the company and be an essential solution for new data-hungry applications,” added Micron president and CEO Sanjay Mehrotra in a statement.
Back in July, Micron and Intel said that the companies were nearing development completion of the second generation of 3-D XPoint technology. This was expected to be completed by the first half of 2019, which is before the partnership ends. As part of the agreement, Micron will be selling 3-D XPoint memory wafers to Intel for up to a year after the deal ends.