After months of speculation and growing losses, Texas Instruments announced Thursday that it was
pulling out of dynamic RAM (DRAM) devices by selling the memory business to Micron Technology. In a definitive agreement,
said it would sell the assets of its memory business to the Boise, Idaho-based company for
stock and assumption
of debt, totaling $800 million.
The deal includes all of TI's own memory assets as well as its shares in two DRAM
joint ventures in Singapore
For TI TXN, the end of two
decades of DRAM manufacturing is an emotional and historic decision. During most of
1980s and early 1990s, DRAM devices were used as the principal technology driver for the
company's logic products.
TI said it had hoped to stay in the DRAM business with joint ventures helping to protect
it from the volatile nature of the
commodity memory market, but the current downturn proved to be too much for the
Dallas-based company. TI (company profile)
also has shifted much of its long-term attention on growing digital signal processing
"Several years ago, TI set a course to become a company focused on its leadership position
in digital signal
processing solutions," said Thomas J. Engibous, TI chairman, CEO, and president.
"With this latest transaction, TI
truly becomes a DSP solutions company, and we do so under an innovative agreement that
positions TI to benefit
from an upturn in the memory market."
For Micron MU, the
acquisition gives it greater market share and a bigger DRAM business. "This strategic
will enhance Micron's position as the most cost-effective memory producer in the world by
leading-edge technology into existing fabs without significantly increasing R&D,
administrative, and operating
costs," said Steve Appleton, chairman, CEO, and president of Micron.
"The additional global capabilities,
including participation in a unique joint-venture manufacturing strategy, positions
Micron to take advantage of
But greater market share in the DRAM business may not be enough to pull Micron out of its
slump. Also Thursday, Micron said its net losses in the third quarter topped $106 million,
or 50 cents per share. The company blamed a 30 percent decrease in price per megabit of its
memory products and gross margins of -20 percent in that business.
Revenue fell sharply to $610 million, down from $755 million in the second quarter.