Report: Micron Technology to Make Deal with Elpida
By Mark LaPedus, SemiMD senior editor
There are more rumors that Micron Technology Inc. will make a bid for debt-ridden Elpida Memory Inc.
As reported, there has been speculation about a Micron-Elpida deal amid a steep downturn in DRAMs. At the same time, Japan’s Elpida is in trouble and saddled with $6 billion in debt and has suffered losses of some $700 million from April to September of last year, according to Brian Matas, an analyst with IC Insights. Elpida is ‘’seeking $500 million in aid from customers,” he said
“There has been a lot of speculation on an Elpida and Micron tie-up in the press,” said Vijay Rakesh, an analyst with Sterne Agee, an investment banking firm, in a report.“While we don’t know if an Elpida J.V. or acquisition is likely to occur, we wanted to offer some insights into what Elpida has to offer to Micron’s roadmap and Micron’s prior history of acquisitions. Bottom line: Elpida offers Micron access to significant 300mm assets and advanced memory capacity.”
Micron is no stranger to acquisitions and joint ventures. In 2008, the company invested approximately $600 million in the Inotera joint DRAM venture with Taiwan’s Nanya to gain access to “approximately 50,000 wafers-per-month capacity,” he said. Micron’s Numonyx acquisition in 2010 saw it pay $1.1 billion “for the opportunity to expand its product portfolio by adding NOR flash.”
Elpida has about 12 percent share in the DRAM market and is a supplier of mobile DRAM. The problem is “Elpida has about $5 billion of debt and $1 billion of cash (equal to ) net debt of $4 billion,” he said.
“We believe the attraction of Elpida for Micron is the advanced 300mm fab capacity that Elpida has. We believe between Elpida’s two fabs — Elpida’s Hiroshima, Japan fab and Rexchip J.V in Taiwan — there is approximately 200,000 wafers per month advanced 300mm capacity.”
In response to the reports, a spokesman for Micron said: “No comment on the rumor or conjecture.”
Separately, Micron Technology Inc. and Virtensys Ltd. recently announced that the companies have signed an agreement for Micron to acquire the assets of privately held Virtensys, a provider of PCIe-sharing solutions based in Manchester, England and Beaverton, Ore. The transaction would further strengthen Micron’s enterprise storage portfolio by combining Virtensys’ PCIe virtualization technology with Micron’s solid state drives (SSDs), enabling data centers to share local storage across multiple servers. Specific terms of the proposed agreement are confidential.
