Back to list

Micron-Elpida deal may help stabilize DRAM prices: report

2012/05/09 19:34:58

Taipei, May 9 (CNA) The price of dynamic random access memory (DRAM) chips may stabilize if U.S.-based Micron Technology Inc. acquires the financially struggling Japanese company Elpida Memory Inc., a research report forecast Wednesday.

With the major players in the field reduced to just three -- Micron and the South Korean companies Samsung Electronics Co. and Hynix Semiconductor Inc. -- there would be a revolutionary change in the DRAM supply chain, said DRAMeXchange, a research unit of the market advisory firm TrendForce,

Earlier this week, Micron moved one step closer to the buyout deal, winning exclusive rights to negotiate for the acquisition of Elpida.

Micron is offering more than 200 billion Japanese yen (US$2.5 billion) to acquire the Japanese company.

If the acquisition goes through, the DRAM industry will be heading toward an oligopolistic market in which DRAM chip price will "gradually stabilize, bidding farewell to the price-slashing market competition of the past," the report said.

With the acquisition, Micron’s market share is expected to rise, replacing Hynix as the world's second largest DRAM supplier, the report said.

In the first quarter of this year, Elpida ranked third in the world with a 12.4 percent market share and Micron fourth with an 11.6 percent share.

Samsung had a 41.4 percent market share, while Hynix held 23.9 percent.

The acquisition of Elpida is expected help Taiwanese firms gain access to Japanese technology through their partnership with Micron, paving the way for cooperation among Taiwan, Japan and the U.S. to compete in the global market, the research unit said.

Micron has teamed up with Nanya Technology Corp., Taiwan's largest DRAM supplier, to operate a joint venture in Taiwan called Inotera Memories Inc.

If Nanya Technology and Inotera gain access to Elpida's technology, the Taiwanese firms will be able to speed up their efforts to upgrade their technology to the 25 nanometer process, according to the report.

With the strong manufacturing capability of Taiwanese companies, the partners will be able to quickly begin mass production and cut costs, the report said.

(By Jackson Chang and Frances Huang)
enditem /pc