Elpida saved through a Micron takeover

/ 4 years ago

Memory giant Micron has confirmed that is buying its financially ruined competitor Elpida in a deal worth $2.5 billion.

Elpida’s demise has been well publicised. Despite working on some of the most innovative solutions in the DRAM market, including a ReRAM prototype module which promises to bridge the gap between volatile DRAM and non-volatile NAND flash, Elpida has been struggling to make ends meet as DRAM prices collapsed. Elpida filed for bankruptcy protection back in February after its debts reached a huge £3.5 billion. To make matters worse after that announcement Elpida share prices plummeted 97% on the Tokyo Stock Exchange as the market condemned Elpida to failure.

Yet Elpida managed to cling on somehow. Now Micron has come to pull them back from the brink. Luckily for Micron this deal means they now increase their overall market share by adding Elpida’s 12.8% to their 12.2% to make them the second biggest DRAM company in the market, behind the giant that is Samsung.

In addition, Micron now has access to a large number of new production facilities so should be able to retain its newly gained market share should it be able to meet the markets current demand with profitable production. Many analysts are commenting that Micron could not have timed this deal any better. Given strict global competition laws, there is no way a deal like this could have ever gone through, not to mention it is not every day that a smaller company buys out a bigger company for a reduced sum of money.

Hopefully the saving of Elpida will mean that the DRAM market will continue to innovate and stay stable even if there is one less competitor.