Good Times: Micron Closes $1.2 Billion Deal 

Micron Technology, Boise's tech-sector Goliath, made a major investment earlier this month with the $1.2 billion, all-stock acquisition of Switzerland-based memory chip maker Numonyx Holdings B.V.

The deal, which Micron closed on May 7 with 138 million shares of its common stock, gives the company access to Numonyx's portfolio of memory chip products, as well as its manufacturing facilities and customer base.

Numonyx, which prior to the Micron sale was owned as a joint venture between STMicroelectronics, Intel and Francisco Partners, specializes in a memory chip technology called NOR. The chip type has traditionally competed with NAND flash memory--one of Micron's key products--and is a crucial technology for cell phone cameras.

With the purchase of Numonyx, Micron is positioned to become the top manufacturer of NOR-type memory worldwide.

"With this acquisition, Micron builds on its position as one of the world's leading memory companies with increased scale, a broader product portfolio and industry-leading technology," Micron chairman and CEO Steve Appleton said in a company release.

Founded and headquartered in Boise, Micron is the only memory-chipmaker in the world that is based in the United States. It remains one of the largest employers in Idaho, but times have been tough for the company. A years-long oversupply in the chip market drove down prices and resulted in Micron suffering a string of deep quarterly losses.

In early 2009, Micron shuttered one of its memory chip fabrication plants in Boise and cut about 2,000 local jobs, worsening the effects of an already painful economic downturn in the Treasure Valley.

But the Numonyx acquisition seems to be part of a general turnaround for the company.

Though Micron ended fiscal year 2009 with a loss of $100 million on $1.3 billion in sales, its first quarter 2010 numbers were decidedly better: $204 million profit on net sales of $1.74 billion. First quarter earnings were the first positive results for Micron in three years and were followed in the second quarter with $365 million in revenue on net sales of nearly $2 billion.

According to Micron, Numonyx will be a healthy addition to the company's bottom line. As of Dec. 31, 2009, Numonyx reported net assets of $1.3 billion and quarterly revenues of about $550 million.

Jim Handy, a Los Gatos, Calif.-based semiconductor industry analyst for the firm Objective Analysis, estimated that Numonyx could add up to $1.5 billion to Micron's revenue stream.

"Objective Analysis projects for the memory market to explode in 2010, and this is likely to amplify the impact of this acquisition," Handy wrote in a research note on chip industry website fabtech.org.

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