Crucial 2013 Annual Report Download - page 20

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The acquisition of our ownership interest in Inotera from Qimonda has been legally challenged by the administrator of
the insolvency proceedings for Qimonda.
On January 20, 2011, Dr. Michael Jaffé, administrator for Qimonda AG ("Qimonda") insolvency proceedings, filed suit
against us and Micron Semiconductor B.V., our Netherlands subsidiary, in the District Court of Munich, Civil Chamber. The
complaint seeks to void under Section 133 of the German Insolvency Act a share purchase agreement between us and Qimonda
signed in fall 2008 pursuant to which we purchased all of Qimonda's shares of Inotera Memories, Inc. and seeks an order
requiring us to retransfer the Inotera shares purchased from Qimonda to the Qimonda estate. The complaint also seeks to
terminate under Sections 103 or 133 of the German Insolvency Code a patent cross license between us and Qimonda entered
into at the same time as the share purchase agreement. A three-judge panel will render a decision after a series of hearings with
pleadings, arguments and witnesses. Hearings were held on September 25, 2012, February 5, 2013, June 11, 2013 and July 2,
2013. An additional hearing is scheduled for November 12, 2013. We are unable to predict the outcome of this lawsuit and
therefore cannot estimate the range of possible loss. The final resolution of this lawsuit could result in the loss of the Inotera
shares or equivalent monetary damages and the termination of the patent cross license, which could have a material adverse
effect on our business, results of operation or financial condition. As of August 29, 2013, the Inotera shares purchased from
Qimonda had a carrying value of $190 million.
Our joint ventures and strategic relationships involve numerous risks.
We have entered into strategic relationships to manufacture products and develop new manufacturing process technologies
and products. These relationships include our IMFT NAND Flash joint venture with Intel Corporation ("Intel"), our Inotera
DRAM joint venture with Nanya and our MP Mask joint venture with Photronics. These joint ventures and strategic
relationships are subject to various risks that could adversely affect the value of our investments and our results of operations.
These risks include the following:
• our interests could diverge from our partners or we may not be able to agree with partners on ongoing manufacturing
and operational activities, or on the amount, timing or nature of further investments in our joint venture;
• we may experience difficulties in transferring technology to joint ventures;
• we may experience difficulties and delays in ramping production at joint ventures;
• our control over the operations of our joint ventures is limited;
• we may recognize losses from equity investment Inotera in our future results of operations;
• due to financial constraints, our joint venture partners may be unable to meet their commitments to us or our joint
ventures and may pose credit risks for our transactions with them;
• due to differing business models or long-term business goals, our partners may decide not to join us in funding capital
investment by our joint ventures, which may result in higher levels of cash expenditures by us;
• cash flows may be inadequate to fund increased capital requirements;
• we may experience difficulties or delays in collecting amounts due to us from our joint ventures and partners;
• the terms of our partnering arrangements may turn out to be unfavorable; and
• changes in tax, legal or regulatory requirements may necessitate changes in the agreements with our partners.
If our joint ventures and strategic relationships are unsuccessful, our business, results of operations or financial condition
may be adversely affected.