Micron Technology may be the winner in the competition to acquire Elpida Memory, offering more than $2.5 billion (200 billion yen) as well as assurances of the continued operation of Elpida’s operations in Japan, according to several reports from Japan-based sources.

The final round of bidding closed Friday. Japan’s Jiji press service said Micron “likely will receive preferential negotiation rights Monday (May 7), and a final deal could be concluded by the end of the month.”  About half of the Micron funds would go to pay off creditors, with the remainder invested in the Elpida operations, the report said, quoting unidentified sources close to the negotiations. A Japanese court needs to approve the deal, which may take until August.

The addition of Elpida’s capacity would give Micron roughly a 25 percent share in the worldwide DRAM market, according to IHS iSuppli, making it the second-largest DRAM maker after Samsung and moving beyond SK Hynix. Elpida has a large fab in Hiroshima, in southern Japan, and a smaller packaging operation in Akita in the northern part of the country.

“Micron has projected that Elpida would be able to keep both plants if the facilities’ book values are slashed to reduce depreciation costs,” Jiji reported. General assurances that the Japanese company’s employees would continue to have jobs, at least for the time being, also will play a role in the final decision, the report said.

SK Hynix issued a regulatory filing last week saying it was no longer in the running to buy Elpida. Private equity firm TPG Capital and Chinese fund Hony Capital have submitted a joint bid.

Elpida is Japan’s last remaining maker of DRAMs, a sector Japan-based companies dominated in the 1980s and for most of the 1990s. Elpida was established in 1999, originally as NEC Hitachi Memory, Inc., and took on the Elpida name shortly thereafter. In 1993, it took on the DRAM operations of Mitsubishi Electric Corp., and began working together with Taiwan-based Powerchip Semiconductor (PSC). In early 2007 Elpida and PSC set up a DRAM manufacturing joint-venture company, Rexchip Electronics Corp.

Tags: DRAMs, Elpida Memory, Micron Technology

This entry was posted on Monday, May 7th, 2012 at 6:30 am and is filed under Top Stories. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.