Just days after Micron Technology, Inc., announced a layoff of 1,500 employees as part of a 15 percent reduction in its global work force of 19,000, the company said Sunday that it is purchasing 35.6 percent ownership in a Taiwanese dynamic random-access memory maker.

Micron says it is expanding its partnership with Nanya Technology Corporation and has signed an agreement to acquire Qimonda AG's ownership stake in Inotera Memories, Inc., a leading Taiwanese DRAM memory manufacturer, for $400 million in cash.

To help fund the purchase price, Micron has obtained $285 million in financing commitments from strategic sources at favorable terms, the company said in a press release posted to its Web site Sunday.

"This new relationship with Inotera will increase Micron's competitiveness by further leveraging our current MeiYa joint venture with Nanya," Steve Appleton, Micron chairman and CEO, said in a press release. "Micron will gain greater scale in DRAM, reduce our operating expenses per wafer and have access to a very cost competitive operation."

Micron is the only U.S. maker of dynamic random-access memory and ranks No. 4 among producers, with 11 percent of the market, according to iSuppli Corp., which monitors the industry.

The company has been trying to take advantage of weaknesses in its competitors. It also has a whole lot of cash, and now it's spending some to strengthen the company compared to the competition in the worldwide memory chip market.

In the current Qimonda and Nanya partnership, Inotera operates two state-of-the-art 300-millimeter wafer fabrication facilities producing a total of 120,000 wafers per month. Under the agreement, Micron will acquire access to half of the total manufacturing capacity of Inotera, with the other half allocated to Nanya.

Micron will also share its industry-leading Stack DRAM technology with Inotera for the production of Stack DRAM products for Micron and Nanya.

The transaction will be completed in two stages, with Micron purchasing half of Qimonda's stake, or about 18 percent of Inotera, for $200 million in cash within about the next week - subject to certain government approvals and other customary conditions. The remaining approximately 18 percent stake in Inotera will be acquired upon receipt of Taiwan Federal Trade Commission approval and other customary conditions.

Following the acquisition, Qimonda's share of Inotera's capacity will be ramped down over several months. In conjunction with the acquisition, Micron anticipates entering into a series of agreements with Nanya to restructure the previously announced MeiYa joint venture, taking into account its new relationship with Nanya in Inotera. Both companies expect end future resource commitments to MeiYa and redirect those resources to Inotera.

"Working with Micron on the MeiYa joint venture has been a positive experience for Nanya, and we look forward to broadening our relationship," said Jih Lien, Nanya president. "Both Nanya and Micron have proven records of developing cost-effective leading memory solutions, and we expect to build on this foundation with our Inotera relationship."

Statesman staff