Micron Technology (NYSE: MU ) has snapped its last photograph. The imaging sensor unit is spinning out into the hands of private investors.
It's hardly a surprising move -- rumors of Micron's departure from the image sensor arena have been floating around ever since that division was renamed Aptina about a year ago. But the situation came to a head very quickly as the bottom fell out of the whole market for fancy camera chips.
When Micron reported earnings in early April, the imaging segment had a 39% year-over-year revenue drop to just $83 million. That puts it behind chief rival OmniVision Technologies' (Nasdaq: OVTI ) $89 million for the quarter, which may have put shareholder pressure on Micron's management to do something about this flagging venture.
Equity firms TPG Capital and Riverwood Capital will take Aptina off Micron's hands. We don't have a buyout price, but Micron will take a $100 million loss in its fourth quarter to account for this deal. Yeah, "ouch," and all that -- but the imaging chips ran at a $102 million operating loss last quarter anyway. It hurts Micron less in the long run to just get rid of the thing. Well, most of the thing: It will still maintain a 35% stake in the new independent, privately held sensor spinoff.
Now, the biggest tech company in Idaho is free to focus all of its assets and efforts on the core operation, which is digital memory of various kinds. And that'll take some doing. The memory industry is falling to pieces around Micron, with some competitors filing for bankruptcy protection and others looking to merge just to increase their chances of survival. Giants like Intel (Nasdaq: INTC ) and STMicroelectronics (NYSE: STM ) bent over backward in the last couple of years to get out of that high-risk game, and Micron is bleeding cash at an alarming rate.
So thanks for the memories, Micron. But the main memory market hasn't hit rock bottom yet, and I'm not touching this toxic stock until Micron can sell products for more than they cost to make. Spin out and refocus all you want, but it's not good enough for me.