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Apple places massive DRAM order at Elpida plant - report

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Apple has taken a punt on bankrupt Japanese DRAM manufacturer Elpida, placing orders for a whopping 50 per cent of the firm’s production of chips at its Hiroshima facility, according to Digitimes.

Industry sources told the Taiwanese tech title that Cupertino is keen to source the DRAM chips from Elpida to power upcoming iPhone and iPad models.

DRAM manufacturers have been forced to endure falling prices for some time now, so Apple’s investment will be a welcome boost to Elpida and the firm most likely to take ownership of it, Micron.

The US memory giant is reportedly bidding $2.5bn for the ailing Japanese firm after rivals SK Hynix and Toshiba both declined to pursue deals. Elpida is said to have debts in excess of $5.5bn.

With Elpida on board and a huge Apple contract in the bag, Micron would happily leapfrog Korean giant Hynix to second place in an industry dominated by Samsung, which has more than half of the market.

In what is set to be another tough year, the growth of mobile computing represents a ray of hope for DRAM manufacturers in the face of increasing price pressures.

Analyst IHS iSuppli predicted in January that tablet computers would need 1 billion gigabits of DRAM in 2012 – nine times more than the previous year. The figure will rise to 3.5bn by 2014, said iSuppli.

However, as we've mentioned previously, things could still go titsup for DRAM suppliers if tablets begin to cannibalise other markets such as netbooks and desktops, leading to a drop in overall demand. ®

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