Throughout the summer rumors have flown that Boise-based semiconductor giant Micron may purchase battered German competitor Qimonda. Now analysts are saying the deal is all but done.
According to a Monday research note from American Technology analyst Doug Freedman, snapping up Qimonda now would position Micron, along with Samsung Electronic, to control supply and intellectual property as it waits out the current chip industry downturn.
The acquisition would also give Micron a cheaper route to expanded capacity – converting Qimonda’s fabrication facilities to Micron’s processes would cost $100 million, as opposed to the $500 million Micron planned to spend on increasing DRAM capacity in Fiscal Year 2009, Freedman said.
For Infineon, which owns 77 percent of Qimonda, the deal would unload a company that has lost about $2.3 billion over the past year.
"Infineon just wants out of the losses," Freedman said, as quoted in EE Times. "The faster they transfer the assets the cheaper it will be for them."
Gregory Wong, an analyst at Forward Insights, also believes the Micron-Qimonda deal is in the offing, and could include the purchase of Qimonda’s stake in DRAM manufacturing joint venture Inotera. Qimonda’s partner in Inotera is Nanya, which Micron joined in a separate joint venture earlier this year called Meiya.
Neither Wong nor Freedman could put a solid price figure on the acquisition – and Micron and Qimonda aren’t talking – but Freedman said Micron may use a financing deal that would require it to pay as little as $350 million up front, with the rest coming from cash flow from acquired assets.
Micron closed at $4.33 Monday, down 51 cents. Qimonda finished the day at $2.30, down 12 cents.
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