July 02, 2012, 4:06 PM — Micron Technology announced today that it will acquire struggling Elpida Memory, the third largest producer of DRAM memory, for $750 million and will also take over $1.75 billion in Elpida's debt.
Tokyo-based Elpida filed for bankruptcy in February after failing to recoup investments in manufacturing facilities it had built to increase production. The oversupply of memory capacity led to a drop in DRAM prices.
With this acquisition, Boise, Idaho-based Micron will obtain one of its chief competitor's manufacturing plants in Hiroshima, Japan.
Elpida mainly manufactures DRAM for mobile devices, such as smartphones and tablets. Micron is a provider of enterprise-class DRAM for networking and servers. The company is also a major provider of NAND flash for solid state drive technology as well as a manufacturer of NOR chips, which are commonly found in mobile phones and MP3 players.
Elpida's assets include a fabrication facility for 300 millimeter DRAM located in Hiroshima and about 65% ownership interest in Rexchip Electronics Corp., which also runs a 300mm DRAM fabrication facility in Taiwan; and an assembly and test plant in Akita, Japan.
In a related transaction, Micron also announced a separate agreement with Taiwan-based Powerchip Technology Corp. to acquire the Powerchip group's 24% share of Rexchip Electronics for about $334 million.
When the deal closes this year, Micron will control approximately 89% of Rexchip's outstanding shares. The fabrication assets of Elpida and Rexchip together can produce more than 200,000 300mm wafers per month, which would represent an approximate 50% increase in Micron's manufacturing capacity, the company stated.
"We are creating the industry-leading pure-play memory company," Micron CEO Mark Durcan said in a statement. "Today's transactions will help strengthen the combined companies' market position in the memory industry through increased research and development and manufacturing scale; improved access to core memory market segments; and additional wafer capacity to balance among DRAM, NAND and NOR memory solutions for the ultimate benefit of Micron and Elpida customers."