Boston, MA 10/02/2013 (wallstreetpr) – Micron Technology, Inc. (NASDAQ:MU), the U.S. based semiconductor device company, is one of the market leaders which produces several flash drives. Micron’s products are widely appreciated for its quality and they also sell under some of the leading brand across the globe. Micron recently disclosed that its production unit in Israel is facing liquidity crunch and has almost gone bankrupt. The key officials of the company have already decided to stop its operations from the unit soon. The unit employs around 1000 people out of which 800 are permanent employees while the others are contractual employees. The news of the closure came as a shock for the Israeli government. Intel Corporation (NASDAQ:INTC), which is also struggling because of its declining sales as more and more number of people are now opting for the mobile phones and tablets instead of personal computers. Intel grabbed this opportunity with a view of expansion. Since, taking over the control of plant means Intel will enter a new product line. Intel will also retain all the employees of the plant.
The unit will be handed over to Intel in 2015 after Micron Technology stops its production from the unit. However, after assuming control of this unit, Intel will continue producing the same products which Micron currently manufactures. A part of the product that Intel will manufacture here has to be sold to Micron as per the agreement deal. In the next 3 months, the deal will materialize. Israeli government will also pay Intel a onetime benefit package of $280 million for continuing its operations from the unit.
Micron is presently facing problems in selling the products which it produces in the manufacturing unit of Israel. Since, most of the products remained unsold the loss figure is continuously shooting up raising concerns for the management of the company.
