Micron Technology Confirms Plans to Acquire Elpida Memory

Micron Confirms Discussions With Elpida Memory Trustees

by Anton Shilov
05/09/2012 | 11:57 PM

Micron Technology has confirmed it is engaged in discussions with Elpida Memory's trustees to acquire Elpida's business. Earlier it was reported that Micron had won exclusive right to bid for Elpida. The Boise, Idaho-based memory maker will pay between approximately $2.5 and $3.75 billion for Elpida's assets.

 

Micron made the announcement following approval by the Tokyo district court allowing Elpida's trustees to negotiate an agreement with Micron, pursuant to which Micron would become Elpida's sponsor and acquire Elpida's entire business in accordance with the corporate reorganization proceedings. Elpida, a semiconductor DRAM memory manufacturer, began insolvency procedures in late February, 2012.

Elpida recently undertook a bidding process to select a company to "sponsor" Elpida during its corporate reorganization proceedings and to acquire the company's business. In that process, Elpida has decided to move forward in negotiations with Micron as the potential sponsor.

In Q1 2012 Micron and Elpida had 11.6% and 12.4% revenue share of the DRAM market, respectively; a good distance behind second-place maker SK Hynix, who controlled 23.9% market share. After Micron and Elpida have integrated, their combined market share will bring the Micron team’s market share (Micron, Inotera, Elpida, and Rexchip) to nearly 24%, surpassing SK Hynix’s 23.9% to become second only to memory giant Samsung Electronics, according to DRAMeXchange.

As previously stated, the DRAM industry is heading towards becoming an oligopolistic market: the emergence of three major DRAM players. This situation is projected to  help DRAM chip price gradually stabilize, bidding farewell to the price-slashing market competition of the past.