SHARE

Micron Buys Mobile DRAM Maker Elpida for $2.5 Billion

Micron today announced that it is acquiring Japanese DRAM firm Elpida Memory in a deal valued at $2.5 billion. The move, said Micron CEO Mark Durcan during an investor conference call, will “create the world’s leading pure-play memory company.” Under the terms of the deal, Micron will pay $750 million in cash at closing. The […]

Written By

Pedro Hernandez

Jul 2, 2012

Datamation content and product recommendations are editorially independent. We may make money when you click on links to our partners. Learn More

Micron today announced that it is acquiring Japanese DRAM firm Elpida Memory in a deal valued at $2.5 billion. The move, said Micron CEO Mark Durcan during an investor conference call, will “create the world’s leading pure-play memory company.”

Under the terms of the deal, Micron will pay $750 million in cash at closing. The remaining $1.75 billion will be paid in annual installments through 2019. The companies expect the transaction to close in the first half of 2013, pending approvals.

Acquiring Elpida and settling its debts — plummeting DRAM prices and increased competition forced it into bankruptcy earlier this year — expands the Boise, Idaho-based computer memory maker’s technology portfolio and market presence. The deal also gives Micron some added muscle to compete against fast-growing Asian chipmakers, particularly Korean technology giant Samsung.

“The memory business is perhaps the most competitive and rapidly evolving in the world,” said Durcan. “It requires significant, ongoing technology, product development and market development investments.” By acquiring Elpida, Micron is paying big to stay in the game.

Elpida’s manufacturing assets include a fab in Hiroshima, Japan that produces 300 millimeter (mm) DRAM chips and an assembly and test facility in Akita, Japan. Micron hopes to exploit the “cost synergies as well as scale advantage” of the union, says Durcan.

With Elpida’s manufacturing capabilities and intellectual property in hand, Micron stands to better adjust to shifting market dynamics that increasingly favor mobile devices. Micron has the enterprise IT segment of the market covered as a provider of DRAM chips for servers. Elpida is a supplier of mobile memory whose customers include tablet market leader Apple.

Specifically, the Micron-Elpida deal will enable “additional wafer capacity to balance among DRAM, NAND and NOR memory solutions,” according to a statement.

On a related note, Micron announced that it is acquiring Powerchip Technology’s 24 percent stake in Rexchip, a Taiwanese DRAM manufacturer in a deal valued at approximately $334 million. Rexchip operates a 300mm DRAM factory in Taiwan.

Together with Elpida’s 65 percent interest in Rexchip, Micron will control 89 percent of the company’s outstanding shares. Micron’s purchase of Rexchip shares from Powerchip will coincide with the close of the Elpida deal.

Elpida and Rexchip produce more than 200,000 300mm wafers per month, according to the companies. Snapping them up gives Micron’s manufacturing capacity a big boost, an estimated 50 percent increase over current levels.

Pedro Hernandez is a contributing editor at InternetNews.com, the news service of the IT Business Edge Network, the network for technology professionals. Follow him on Twitter @ecoINSITE.

Ethics and Artificial Intelligence: Driving Greater Equality

FEATURE | By James Maguire,
December 16, 2020
AI vs. Machine Learning vs. Deep Learning

FEATURE | By Cynthia Harvey,
December 11, 2020
Huawei’s AI Update: Things Are Moving Faster Than We Think

FEATURE | By Rob Enderle,
December 04, 2020
Keeping Machine Learning Algorithms Honest in the ‘Ethics-First’ Era

ARTIFICIAL INTELLIGENCE | By Guest Author,
November 18, 2020
Key Trends in Chatbots and RPA

FEATURE | By Guest Author,
November 10, 2020
Top 10 AIOps Companies

FEATURE | By Samuel Greengard,
November 05, 2020
What is Text Analysis?

ARTIFICIAL INTELLIGENCE | By Guest Author,
November 02, 2020
How Intel’s Work With Autonomous Cars Could Redefine General Purpose AI

ARTIFICIAL INTELLIGENCE | By Rob Enderle,
October 29, 2020
Dell Technologies World: Weaving Together Human And Machine Interaction For AI And Robotics

ARTIFICIAL INTELLIGENCE | By Rob Enderle,
October 23, 2020
The Super Moderator, or How IBM Project Debater Could Save Social Media

FEATURE | By Rob Enderle,
October 16, 2020
Top 10 Chatbot Platforms

FEATURE | By Cynthia Harvey,
October 07, 2020
Finding a Career Path in AI

ARTIFICIAL INTELLIGENCE | By Guest Author,
October 05, 2020
CIOs Discuss the Promise of AI and Data Science

FEATURE | By Guest Author,
September 25, 2020
Microsoft Is Building An AI Product That Could Predict The Future

FEATURE | By Rob Enderle,
September 25, 2020
Top 10 Machine Learning Companies 2021

FEATURE | By Cynthia Harvey,
September 22, 2020
NVIDIA and ARM: Massively Changing The AI Landscape

ARTIFICIAL INTELLIGENCE | By Rob Enderle,
September 18, 2020
Continuous Intelligence: Expert Discussion [Video and Podcast]

ARTIFICIAL INTELLIGENCE | By James Maguire,
September 14, 2020
Artificial Intelligence: Governance and Ethics [Video]

ARTIFICIAL INTELLIGENCE | By James Maguire,
September 13, 2020
IBM Watson At The US Open: Showcasing The Power Of A Mature Enterprise-Class AI

FEATURE | By Rob Enderle,
September 11, 2020
Artificial Intelligence: Perception vs. Reality

FEATURE | By James Maguire,
September 09, 2020

SEE ALL
ARTICLES

Pedro Hernandez

Pedro Hernandez is a contributor to Datamation, eWEEK, and the IT Business Edge Network, the network for technology professionals. Previously, he served as a managing editor for the Internet.com network of IT-related websites and as the Green IT curator for GigaOM Pro.

Micron Buys Mobile DRAM Maker Elpida for $2.5 Billion

Pedro Hernandez

Recommended for you...

Company

Categories

Micron Buys Mobile DRAM Maker Elpida for $2.5 Billion

RELATED NEWS AND ANALYSIS

Pedro Hernandez

Recommended for you...

Company

Categories