Friday, June 29, 2012

Report: Micron to Buy Elpida, Japanese Chipmaker

Posted By on Fri, Jun 29, 2012 at 9:14 AM

Japan's Nikkei newspaper is reporting that Boise-based Micron Technology is set to buy bankrupt Japanese chipmaker Elpida Memory for an estimated 200 billion yen ($2.5 billion).

At the opening bell of this morning's NASDAQ exchange, Micron shares bumped up nearly 3 percent to $6.14 per share. Micron was trading as low as $5.53 on June 26.

In early May, Micron won the right to negotiate exclusively for Elpida. If successful with the takeover, Reuters reported that Micron could "more than double its global market share."

Currently, Samsun Electronics is the world's biggest maker of memory chips used in personal computers, but by acquiring Elpida, Micron could boost its share to 25 percent, surpassing South Korea's SK Hynix, and becoming the second-biggest player in the memory chip marketplace.

Elpida, which specializes in chips for smartphones and tablets, filed for bankruptcy protection in February, reporting 448 billion yen in liabilities. Part of Micron's offer could be used to repay Elpida's debts and part would be invested in the chipmaker's operations.

Micron’s purchase of Elpida would mark “the end of a perfectly competitive market as Samsung, Hynix, and the new Micron team become the three main players in an oligopolistic market,” TrendForce said in a June 6 statement.

Taking over Elpida would also help Micron boost its mobile DRAM business, as the Japanese chipmaker held a 17 percent share in the market in the fourth quarter, TrendForce said. Micron controlled 7.3 percent of the mobile DRAM market, lagging behind Samsung’s 54 percent and Hynix’s 21 percent.

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