Equity Method Investments

9 Months Ended

Jun. 01, 2017

Equity Method Investments and Joint Ventures [Abstract]



As of	June 1, 2017				September 1, 2016
	Investment Balance		Ownership Percentage		Investment Balance		Ownership Percentage
Inotera	$	—	—	%	$	1,314	33	%
Tera Probe	—		—	%	36		40	%
Other	15		Various		14		Various
	$	15			$	1,364

Equity in net income (loss) of equity method investees, net of tax, included the following:



	Quarter ended					Nine months ended
	June 1, 2017		June 2, 2016			June 1, 2017			June 2, 2016
Inotera	$	—	$	(19	)	$	9		$	35
Tera Probe	2		(22		)	(3		)	(16		)
Other	—		1			1			5
	$	2	$	(40	)	$	7		$	24

Inotera

We held a 33% interest in Inotera, a Taiwan DRAM memory company, through December 6, 2016, at which time we acquired the remaining 67% interest in Inotera. Historically, we accounted for our interest in Inotera on a two-month lag under the equity method. As a result of the Inotera Acquisition, we account for Inotera without a lag, consistent with our other wholly-owned subsidiaries.

From January 2013 through December 2015, we purchased all of Inotera's DRAM output under supply agreements at prices reflecting discounts from market prices for our comparable components. After December 2015 and until our acquisition of the remaining interest in Inotera, the price for DRAM products purchased by us was based on a formula that equally shared margin between Inotera and us. We purchased $504 million of DRAM products from Inotera in the first quarter of 2017 and $348 million and $1.05 billion in the third quarter and first nine months of 2016, respectively.

Tera Probe

In the third quarter of 2017, we sold our 40% interest in Tera Probe, which provides semiconductor wafer testing and probe services to us and others, in a transaction that included the pending sale of our assembly and test facility located in Akita, Japan. (See "Restructure and Asset Impairments" note.) In the first quarter of 2017 and third quarter of 2016, we recorded impairment charges of $16 million and $25 million, respectively, within equity in net income (loss) of equity method investees to write down the carrying value of our investment in Tera Probe to its then fair value based on its trading price (Level 1). We incurred manufacturing costs for services performed by Tera Probe of $15 million and $47 million in the third quarter and first nine months of 2017, respectively, and $19 million and $58 million in the third quarter and first nine months of 2016, respectively.