April 11, 2006 – Micron Technology Inc., Boise, ID, posted a 64% hike in fiscal 2Q06 profits to $193.2 million on 6% lower sales of $1.23 billion, thanks to roughly $230 million in one-time gains related to selling NAND flash technology to Intel Corp. as part of their IM Flash Technologies joint venture. Revenues and gross margins decreased sequentially due to declining memory prices.
Micron also has increased its 2006 capital expenditures budget, from $2.0 billion to $2.6 billion, including investments in IM Flash Technologies and TECH Semiconductor, its semiconductor memory manufacturing JV with the Singapore Economic Development Board that has contributed 20%-25% of Micron’s overall memory production. Micron contributed approximately half of the $260 million invested into the Singapore JV by investors on March 3, giving the company a 43% ownership stake.
The IM Flash Technologies JV began operations during 2Q06, fueled by cash contributions of $500 million from Intel. Initial plans called for support of $1.2 billion from each company, plus another $1.4 billion over the next three years. Apple prepaid $250 million in 2Q06 to secure NAND flash supply from the venture, half of what initial reports said it would contribute to the venture.