Feeds

Micron's Elpida buy is GO for $2.5bn - and then there were three

Any DRAM you like. Provided you like Samsung, Hynix or Micron

Internet Security Threat Report 2014

Confirming previous reports, Micron is spending $2.5 billion to buy bankrupt and debt-ridden Japanese DRAM manufacturer Elpida and so double its DRAM market share to 24 per cent, second only to Samsung.

This was reported by the Nikkei media outlet DRAMeXchange in Japan late last week. The report says that although some 70 per cent of the 200 billion yen acquisition price will be used to repay Elpida debts, that would leave 70 per cent of Elpida's debts unpaid with corresponding losses to debtors.

Micron will invest 100 billion yen - $1.25 billion - in building up DRAM product at Elpida's fabs, including one in Hiroshima, helping to safeguard Japanese government interests. After the acquisition Micron will have around a quarter of the global DRAM business, as will Hynix, with Samsung holding over 40 per cent.

DRAMeXchange said Micron plans "to continue migration from the currently mainstream 45nm process to 30nm and 25nm technology."

Micron has issued no statement about buying Elpida and none is expected until the nuts and bolts of the acquisition are all cut and dried, so to speak.

DRAMeXchange commented: "the emergence of three major DRAM players will help DRAM chip price gradually stabilise, bidding farewell to the price-slashing market competition of the past."

Base storage technologies like hard disk drives and DRAM are consolidating down towards stable groups of three suppliers. These are Seagate, Toshiba and Western Digital in the disk drive business, and Samsung, Micron and Hynix in the DRAM business.

Base product factories are vastly expensive, and output is measured in tens of millions of units or more. As market demand moves up and down there are periodic supply gluts and famines, with consequent high prices followed by price cuts and an inability to sustain profits by the smaller players, such as Elpida in DRAM. That gets them into trouble as they can't fund the relentless improvement in manufacturing fab processes and keep up with the main players in reducing per-unit production costs.

The flash fab business is going the same way, with Samsung, Micron and Toshiba, and, overall in disk, DRAM, and flash, there is a risk of oligopolistic suppliers manipulating production to keep prices high and stable.

It's thought that after the acquisition completes, Elpida plants will concentrate on mobile DRAM production with Micron focusing on server DRAM and NAND. Elpida's Rexchip subsidiary will focus on commodity DRAM. ®

Internet Security Threat Report 2014

More from The Register

next story
Azure TITSUP caused by INFINITE LOOP
Fat fingered geo-block kept Aussies in the dark
NASA launches new climate model at SC14
75 days of supercomputing later ...
Yahoo! blames! MONSTER! email! OUTAGE! on! CUT! CABLE! bungle!
Weekend woe for BT as telco struggles to restore service
You think the CLOUD's insecure? It's BETTER than UK.GOV's DATA CENTRES
We don't even know where some of them ARE – Maude
DEATH by COMMENTS: WordPress XSS vuln is BIGGEST for YEARS
Trio of XSS turns attackers into admins
Cloud unicorns are extinct so DiData cloud mess was YOUR fault
Applications need to be built to handle TITSUP incidents
BOFH: WHERE did this 'fax-enabled' printer UPGRADE come from?
Don't worry about that cable, it's part of the config
Astro-boffins start opening universe simulation data
Got a supercomputer? Want to simulate a universe? Here you go
prev story

Whitepapers

Why cloud backup?
Combining the latest advancements in disk-based backup with secure, integrated, cloud technologies offer organizations fast and assured recovery of their critical enterprise data.
Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
How to determine if cloud backup is right for your servers
Two key factors, technical feasibility and TCO economics, that backup and IT operations managers should consider when assessing cloud backup.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
Getting ahead of the compliance curve
Learn about new services that make it easy to discover and manage certificates across the enterprise and how to get ahead of the compliance curve.