At a $550 million investment each, Micron and Nanya create MeiYa Technology, a DRAM joint venture that will leverage both companies' manufacturing technology.

Following a disclosure last month that they were exploring potential technology sharing, joint technology development, and development of a new joint venture for the DRAM memory market, Boise, Idaho-based memory giant Micron Technology Inc and Taipei, Taiwan-based fellow memory company Nanya Technology Corp today announced they have signed an agreement to create DRAM joint venture MeiYa Technology Corp.

MeiYa will leverage both companies’ manufacturing technology and will be located in a 200-mm Nanya manufacturing facility in Taiwan that will be upgraded to 300-mm manufacturing process technology this year. The facility is expected to begin volume production next year.

In addition to MeiYa, the companies said they will jointly develop and share future technology.

Even with DRAM prices suffering at the moment, Micron spokesman Daniel Francisco told Electronic News that this JV is a cost-effective way to share capital and continue to grow and innovate.

“We do not expect this to impact industry supply for the remainder of the calendar year as the [Nanya] 200-mm fab will be taken offline and the 300-mm conversion will be completed in 2009. Any decisions on capacity plans beyond this will be market-dependent,” he said.

Micron and Nanya will each own 50% of MeiYa initially, and each will contribute $550 million in cash by the end of 2009. Micron’s Francisco confirmed there will be no impact in 2008, as the money will be spent beginning in fiscal year 2009, and that fiscal year 2008 capital spending guidance will remain $2.5 billion to $3 billion. The company has not provided capital spending estimates further out.

“We cannot estimate the full impact on quarterly results for fiscal 2008 and 2009, but the net impact on DRAM operating income in the near term should approximate one-half of our historical R&D expenditures,” Francisco said.

Mark Durcan, Micron’s president and COO, commented, “This partnership brings greater scale and efficiency to the DRAM manufacturing operations of both parent companies, and Micron is pleased to officially enter into this joint venture with Nanya.”

The deal is expected to close within the next few months.