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Micron to acquire Apple supplier Elpida in memory shakeup

updated 07:59 am EDT, Tue July 3, 2012

Micron to become number 2 memory maker in the world

US-based Micron Technology has entered into an agreement to acquire bankrupt Japanese DRAM maker Elpida for $2.5 billion, according to Digitimes. Elpida is remains a key component supplier for Apple's new iPad and iPhone 4S, and will propel Micron to the number 2 position in memory chip fabrication behind only Samsung with a 24 percent share of the global market. Like a number of its Japanese compatriots, Elpida had struggled to cope with the challenge posed by the Korean tech giant and filed for bankruptcy protection in February after it could not pay back $1.89 billion in debt due in April.

Although Apple has huge cash reserves and could have easily acquired Elpida to ensure that it maintained maximum control of its component supply, particularly given its current legal problems with Samsung Electronics, it is thought that it instead influenced Microns decision. Despite its position as the number three maker of DRAM in the world, Elpida blamed falling prices and record yen values as it racked up a $5.6 billion debt. Adding to its woes, the flooding in Thailand further affected its business.

The new deal will give Micron additional capacity and better bargaining power as it seeks to take up the challenge posed by Samsung in the hotly contested mobile flash memory segment. Elpida was formed in 1999 when Hitachi and NEC merged their DRAM operations. The company later absorbed Mitsubishis DRAM division in 2003 before being traded on the Tokyo Stock Exchange in 2004.



By Electronista Staff
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