Taipei, Wednesday, July 30, 2014 01:50 (GMT+8)
partly cloudy
Taipei
29°C
Commentary: A Micron-Elpida merger would improve DRAM industry health
Josephine Lien, Taipei; Jessie Shen, DIGITIMES [Tuesday 8 May 2012]

Micron Technology reportedly has reached the final stage of talks on the purchase of Elpida Memory. The possible merger of Micron and Elpida will help to restore a healthier supply-demand balance to the DRAM industry.

A Japan Times report quoted unnamed sources as saying that Micron will have the right to negotiate exclusively to buy Elpida after offering a total of JPY220 billion (US$2.75 billion) for the bankrupt Japanese company. A final deal is expected to be concluded by the end of May 2012).

A combined Micron/Elpida entity would not only balance against the two dominant DRAM manufacturers - Samsung Electornics and SK Hynix - but also help the industry head towards a healthier state. The merger between Micron and Elpida is also expected to better leverage support provided by their respective affiliates and production partners in Taiwan.

Micron initially offered US$1.5 billion for Elpida - considered as a move to find out levels of acceptable prices for both seller and buyer. Hynix and Toshiba reportedly were among the other bidders, while Globalfoundries and China's SMIC were said to be interested to Elpida's Hiroshima plant.

Private equity firms - China's Hony Capital and TPG Capital of the US - reportedly have also teamed up to bid for Elpida. While rumors continue to spread about the fate of the Japanese chipmaker, Micron is believed to have won the bid and has entered merger talks with Elpida.

In a February report by IHS iSuppli, a possible merger between Micron and Elpida has the potential to dramatically redraw the competitive landscape of the DRAM space. The union between the two companies would catapult the newly consolidated entity to second place in the global DRAM market with a combined capacity of 374,000 wafer starts per month based on the latest available information, according to IHS.

The Micron-Elpida entity would have a 28% share of worldwide DRAM manufacturing capacity, placing it just behind leader Samsung, currently with 433,000 WSPM or 33% share of global capacity, IHS said. Hynix would fall to third place given a 23% share of capacity, or 300,000 WSPM, IHS noted.

The Micron-Elpida merger is also expected to consolidate and expand their respective partnerships with Taiwan-based DRAM firms including Nanya Technology, Powerchip Technology, Inotera Memories and Rexchip Electronics - a move to unite DRAM players from the US, Japan and Taiwan into an alliance to compete against their fellow Korean rivals.

In the mobile DRAM marketplace, Samsung led with a 53.8% market share in the fourth quarter of 2011 followed by Hynix with 20.8%. Micron's merger with Elpida would have their combined share reach 24.3%, outpacing Hynix's. Acquiring Elpida would also allow Micron to cut into the supply chain of Apple. Elpida began supplying mobile RAM chips for Apple's smartphone and tablet devices in the second half of 2011.

Micron set to acquire Elpida

Micron said to be near acquisition of bankrupt Elpida
Digitimes file photo

Realtime news
  • Phison reports strong earnings for 1H14

    Bits + chips - Newswatch | 5h 50min ago

  • Hermes Microvision to see revenues stay flat in 3Q14

    Before Going to Press | 5h 1min ago

  • Delta Electronics 2Q14 gross margin, net profit hit records

    Before Going to Press | 5h 2min ago

  • Huawei ships 34 million smartphones in 1H14

    Before Going to Press | 5h 14min ago

  • Taiwan market: BenQ 1H14 LCD TV sales up 20% due to low-blue-light models

    Before Going to Press | 5h 15min ago

  • Commentary: China antitrust probe could affect Qualcomm performance

    Before Going to Press | 5h 16min ago

  • Demand for tablet touch panels decreasing, say Taiwan makers

    Before Going to Press | 5h 38min ago

  • Adlink develops 3D intelligent vision-aided positioning system in cooperation with ITRI

    Before Going to Press | 5h 52min ago

  • Digitimes Research: Smartphone AP shipments grow over 13% sequentially in China in 2Q14

    Before Going to Press | 6h 9min ago

  • China market: Colorful Technology poses competitive threat to MSI, ASRock

    Before Going to Press | 6h 10min ago

  • UMC to post single-digit revenue growth in 3Q14

    Before Going to Press | 6h 11min ago

  • Taiwan notebook ODMs to benefit from HP, Dell sales in North America

    Before Going to Press | 6h 11min ago

  • Huawei Device sees high growth in 1H14 handset shipments

    Before Going to Press | 6h 12min ago

  • Sales for mini versions of flagship smartphones short of expectations

    Before Going to Press | 6h 13min ago

  • Digitimes Research: Taiwan digital camera shipments in 2Q14 up 43.3% sequentially

    Before Going to Press | 6h 14min ago

  • Global market share for iPad may slip to below 25% in 2H14

    Before Going to Press | 6h 15min ago

  • Acer tops US LCD monitor retail market in 1H14

    Before Going to Press | 6h 16min ago

  • Huawei Device to launch Ascend Mate 3 4G smartphone, says report

    Before Going to Press | 6h 17min ago

Pause
 | 
View more
DIGITIMES Research Tracker Services
Media news email alerts
Greater China touch panel shipment forecast through 2015
  • 2014 global high brightness LED market, trends and shipment forecast

    For the global LED lighting market, the market size will reach US$25.82 billion in 2014 or a market penetration rate of 23.4%. This is attributable to exponential shipment growth for light bulbs, tubes, and directional lamps.

  • Greater China touch panel shipment forecast through 2015

    This Special Report provides forecasts through 2015 for Greater China touch panel shipments with breakdowns based on technology (glass, film, resistive), application (smartphone, NB and tablet) and by firm.

  • 2014 global tablet demand forecast

    This report analyzes the main players, their strategies and shipments forecasts for 2014, as well as other factors contributing to either growth or decline in various segments within the tablet market, with a particular focus on Apple, Google, Samsung, and Microsoft, along with whitebox vendors.