© mikael damkier Analysis | June 20, 2016

Micron-Inotera deal faces further delays

Inotera held a brief press conference on 6/13, 2016, stating that Micron has decided to delay the schedule of merging Inotera, and the future update will be announced in later part of this year.
Other than the NTD 80 billion syndicated loan is still processing, current technical support between MMT (Micron Memory Taiwan) and Inotera has been put on hold. However, both Micron and Formosa group stated that it is only the delay of schedule, not the end of discussion. Both parties will continuously seek for the possible solution in order to complete the transaction.

Since Micron announced plans to migrate 20nm, Inotera has replaced MMJ (Micron Memory Japan) and became the most important production site. Among the Micron camp, including MMJ, MMT, Inotera and the original capacity that Micron processed in house, Inotera was the earliest one to start 20nm migration. In addition, other than PC and Server DRAM, Inotera extended a major scale of production into the most cutting-edged Mobile DRAM LPDDR4. As for now, the wafer start scale of 20nm is still showing upside, and it is scheduled to have full migration by Sept this year.

This coloration plan is also crucial to Nanya's fate. As for the source of Nanya's future technology, addition to the minor transition of 20nm by the end of 2016, the following 1Ynm or 1Xnm are also depending on the licensing support from its partner Micron. Therefore, even if there is still room of discussion on the swap percentage or the absolute price of shares, the closing of this case will eventually benefit Micron, Nanya and Inotera.

According to DRAMeXchange’s previous report, in the first quarter of 2016, Samsung accounted 46.4 percent of total DRAM revenue, ranked number one. SK Hynix positioned in second place (27.1 percent) and Micron was third (18.5 percent). Nanya ranked number four (only 3.7 percent). Out of Micron’s total DRAM capacity of 315K per month, MMJ accounts for about 100K, MMT accounts for about 90K and Inotera accounts for 100K, about one-third of Micron’s total capacity. Current major 20nm production is based at Inotera.

More information can be found at Trendforce.


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