Micron Technology Inc. has agreed to acquire debt-ridden Japanese chip maker Elpida Memory for about $750 million in cash to boost Micron’s manufacturing capacity and bump them up behind Samsung–the global market leader for DRAM memory chips. The agreement involves a sponsorship which will require Micron to spend about $2.5 billion to acquire Elpida’s equity and pay off some of its debt.
Elpida is an Apple Inc. supplier for chips used in their smartphones, tablets and computers. Micron’s acquisition of Elpida will double its share in the market for DRAM memory chips or dynamic random-access memory chips. About $1.25 billion will be invested in building up DRAM product, which should leave Micron with about a quarter of the global DRAM business. Samsung holds over 40 percent.
Of course, until all the details have been settled and approval is obtained from Elpida’s creditors, Micron will likely not issue any further statement about the acquisition. Some are predicting that once the acquisition has been finalized, Micron will focus on server DRAM and NAND while Elpida plants will focus on production of mobile and commodity DRAM.