Texas Instruments: Micron`s Lehi Plant is expected to start contributing revenue from early 2023

Micron today announced the sale of the Lehi plant to Texas Instruments. This transaction Micron will receive 1.5 billion US dollars in revenue, of which 900 million will come from cash and 600 million will come from equipment and assets. Micron has already sold some of these assets and will keep the remaining assets redeployed to other manufacturing bases or sold to other buyers.

In response to the above transaction, Texas Instruments CEO Rich Templeton said that this investment is part of Texas Instruments' long-term production capacity plan and will continue to strengthen Texas Instruments' competitive advantages in manufacturing and technology.

The Lehi fab will be the fourth 12-inch fab of Texas Instruments. Prior to this, Texas Instruments had DMOS6, RFAB1 and RFAB2 to be completed.

In addition to its value as a 12-inch fab, this acquisition is also a strategic move, because the Lehi fab will initially produce Texas Instruments analog and embedded processing products through 65nm and 45nm processes, and if necessary, Step into a more advanced manufacturing process. Texas Instruments plans to complete the acquisition before the end of 2021. In 2022, it is estimated that it will recognize a low utilization cost of $75 million for the Lehi fab every quarter.

Texas Instruments estimates that Lehi wafer fab will start contributing revenue from early 2023. Micron CEO Sanjay Mehrotra said on the earnings call on Wednesday that Texas Instruments will invite all team members of the Lehi fab to join Texas Instruments after the completion of the plant acquisition.

Micron CFO Dave Zinsner also stated on the earnings call that the $900 million plant sale price is lower than the asset's book value, so Micron needs to recognize approximately $330 million in asset impairment charges after tax.