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Micron acquires Elpida, grows stronger in the DRAM market

It’s shopping time for Micron: the American memory chip manufacturer is ready to acquire Elpida, its Japanese competitor recently gone bankrupt. The acquisition total cost will be 2.5 billion dollars, a price that will gain Micron a huge boost for market share and revenues in the DRAM chip business.

With a 12.2% market share and $759m in annual revenues, Micron is currently number 4 in the rank of the largest memory chips manufacturers worldwide behind Elpida, Hynix and Samsung. By acquiring Elpida, the company will jump to the second place essentially doubling its market share and revenues overnight (24.8% for $1.5bn).

Analysts at IHS highlight that “the purchase of Elpida represents a huge boost for Micron’s status in the DRAM industry”, a boost that will also bring new DRAM technologies and patents thanks to which the American company will be able to “improve its product portfolio”.

The acquisition will take some time – at least six months, according to the aforementioned analysts – but then the transition should be quick. Micron will have a new production facility at its disposal, while Elpidia’s assets and workers should be able to survive after what has been called the largest bankruptcy ever occurred to a manufacturer in Japan.

And things should improve steadily in the overall DRAM business too, after the sharp decline (-25%) recorded in year 2011 due to overproduction (and subsequent price reduction for memory banks) and the overall PC market crisis that followed the huge floods in Thailand.


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