Micron Technology, Inc. (NASDAQ:MU) announced that on March 14 it successfully won the auction for Cando Corporation assets, which will be utilized in establishing a back-end site for Micron Taiwan. Micron has now completed the title acquisition process for the new site.
The acquisition includes the cleanroom and tools that are adjacent to Micron’s existing Taichung fab, bringing the company’s fabrication and back-end together in one location. The new site will be focused on establishing a centralized back-end operation.
“This marks a significant step in our plan to create a center of excellence for leading-edge DRAM in Taiwan,” said Wayne Allan, VP, Global Manufacturing. “Bringing fabrication and back-end together, all in one location, builds an efficient support structure for end-to-end manufacturing with quicker cycle times that benefit our business and customers.”
The new back-end site is expected to begin production in August, and the new integrated center of excellence is expected to bring greater operational cost efficiency that will benefit Micron’s DRAM business on a global scale. These cost efficiencies are part of the overall US$500 million of ongoing operational enhancement opportunities cited at the company’s 2017 analyst conference.
The strategic acquisition, with a winning bid of US$89.2 million, also highlights Micron’s goal to grow its presence in Taiwan – where it is the largest foreign employer and investor – from its current wafer manufacturing function to a broader center of expertise in the global memory industry. The back-end site will further enhance the company’s strong presence on the island, which already includes state-of-the-art, 300mm wafer fabrication facilities in Taichung and Taoyuan, as well as sales and technical support offices in Taipei.
The back-end operation will be led by site director Mike Liang, who joined Micron in November 2016 with more than 35 years of experience in the semiconductor industry. Having previously served in leadership roles at Ti-Acer, KYEC and Amkor Taiwan, Liang brings significant expertise in both front-end wafer fabrication and back-end assembly and test manufacturing.
Shares of Micron Technology closed yesterday at $26.21, up $0.41 or 1.59%. MU has a 1-year high of $26.61 and a 1-year low of $9.35. The stock’s 50-day moving average is $24.55 and its 200-day moving average is $20.54.
On the ratings front, Micron has been the subject of a number of recent research reports. In a report released yesterday, Nomura analyst Romit Shah maintained a Buy rating on MU. Separately, on the same day, Rosenblatt Securities’ Hans Mosesmann reiterated a Buy rating on the stock and has a price target of $40.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Romit Shah and Hans Mosesmann have a yearly average return of 14.7% and 12.4% respectively. Shah has a success rate of 63% and is ranked #187 out of 4564 analysts, while Mosesmann has a success rate of 57% and is ranked #347.
Micron Technology, Inc. engages in the designing, and building memory and semiconductor technologies. It operates through the following segments: Compute and Networking Business Unit, Storage Business Unit, Mobile Business Unit, Embedded Business Unit. The Compute and Networking Business Unit segment includes memory products sold into compute, networking, graphics, and cloud server markets. The Storage Business Unit segment are the products sold into enterprise, client, cloud, and removable storage. The Mobile Business Unit segment includes memory products sold into smart phone, tablet, and other mobile-device markets. The Embedded Business Unit segment is comprised of memory products sold into automotive, industrial, connected home, and consumer electronics markets.