Micron Technology is ramping up IM Flash Singapore (IMFS) facility without CapEx funds from Intel and will as a result get all the output of the fab. At the same time, the company is planning to start transiting to 20nm process technology in summer, 2011, amid Intel's gradual reduction of contribution into the joint venture in general.
"Intel is currently not participating with the CapEx in IMFS. We actually are pretty comfortable with that. Number one, we already have that in our financial models making assumption they are not going to participate. Secondly, we could really use the output for service center customers. [...] They have the ability to come in and participate in downstream cap expansion," said Steve Appleton, chief executive officer of Micron, during the quarterly conference call with financial analysts.
Analyst Gregory Wong from Forward Insights said that Intel currently has a 29% stake in IMFS and will get wafers from IMFS. But the market observer believes that future capital investments will be made primarily by Micron, which means the percentage obtained by Intel will decline. Intel and Micron are still partners in the U.S., though. Since Intel only uses flash memory to make its solid-state drives (SSDs), it does not need maximum possible production capacity and would rather save its money for times when it needs more flash.
Micron, by contrast, produces various NAND flash-based products and also sells its memory chips to smartphone makers and other customers. As a result, it will continue to aggressively expand its capacities and transit to newer process technologies so to boost output and further cut down production costs.
"We are happy with the way the 25nm ramp is going and we are in about full swing.[...] [We are] pretty comfortable with the NAND trajectory, and the 20nm that will come into play in the summer as well," Mark Durcan, the president and chief operating officer of Micron.
Micron on Wednesday announced results of operations for its first quarter of fiscal 2011, which ended December 2, 2010. For the first quarter, the company had net income attributable to Micron shareholders of $155 million, or $0.15 per diluted share, on net sales of $2.3 billion. The results for the first quarter of fiscal 2011 compare to net income of $342 million, or $0.32 per diluted share, on net sales of $2.5 billion for the fourth quarter of fiscal 2010, and net income of $204 million, or $0.23 per diluted share, on net sales of $1.7 billion for the first quarter of fiscal 2010.
In the company's memory segment (which excludes Numonyx and other non-reportable segments), revenue from sales of DRAM products was 19% lower in the first quarter of fiscal 2011 compared to the fourth quarter of fiscal 2010 due to a 23% decrease in average selling prices partially offset by a 5% increase in unit sales volume. Revenue from sales of NAND flash products was up slightly in the first quarter of fiscal 2011 compared to the fourth quarter of fiscal 2010 due to a 20% increase in unit sales volume partially offset by a 15% decrease in average selling prices.