Micron Technology buys Numonyx

Numonyx has 1,200 employees at its Israeli fab, where no layoffs are expected.

After months of speculation, Micron Technology Inc. (Nasdaq: MU) acquired Numonyx Holdings BV for $1.27 billion in shares. The acquisition comes less than two years after Numonyx was founded as a joint venture by Intel Corporation (Nasdaq: INTC), STMicroelectronics NV (NYSE: STM), and Francisco Partners to develop flash memory products.

Numonyx has 1,200 employees at its Kiryat Gat Fab 1, which was previously Intel's Fab 18. The Israeli fab is one of Numonyx's strengths, and, so far as is known, is pleased with its management. Micron will presumably make no changes in its operation. Numonyx Israel employees sounded pleased today, and talked about the takeover as an achievement. So far as is known, employees have been told that no layoff or major changes are likely.

The acquisition will give Micron a leading presence in the market for NOR flash memory non-volatile processors (which are not erased when power is cut). The processors are designed to run commands at computer and communications facilities. Numonyx struggled for the first year after it was founded, as the flash memory market was grounded, and for a time there was doubt about the company's soundness. In 2009, the company was forced to make cutbacks and layoffs, and reduce production.

While 2009 was a tough year for Numonyx, it was critical for the NOR flash memory leader, Spansion Inc., which went bankrupt early in the year. Spansion's bankruptcy gave Numonyx new customers at Spansion's expense, and Numonyx became the industry leader in the second quarter, with a market share of 35%.

In the conference call yesterday after the acquisition, Micron said that Numonyx had $550 million in sales in the fourth quarter of 2009. Micron added that it believes that Numonyx will begin making a positive contribution to its bottom line beginning in the 2011 fiscal year, which begins in September.

Published by Globes [online], Israel business news - www.globes-online.com - on February 10, 2010

© Copyright of Globes Publisher Itonut (1983) Ltd. 2010

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