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Micron Offers to Acquire Elpida for About $1.5 Billion

By - Source: Forbes | B 7 comments

Industry rumors suggest that Micron will be the winning bidder to purchase struggling chip maker Elpida.

While Toshiba and Globalfoundries were believed to have participated in the bidding process, it seems as if Micron is ready to pay somewhere between $1.3 billion and $1.5 billion for its rival.

The value of Elpida is mainly in its Hiroshima manufacturing facility, which is estimated to be worth about $1 billion, according to a Bloomberg article. Building a new fab is substantially more expensive for every chip maker. As of March 2012, Micron's balance sheet lists about $2.1 billion available in cash and short term investments. However, the company's quarter results have worsened since the end of 2010 and dipped into the red into the most recent quarter when the company reported a net loss of $224 million on revenues of $2.1 billion.

Recently appointed chief executive officer Mark Durcan said that the company expects DRAM prices to recover, but explained that even if the company has been able to sell more NAND Flash and DRAM in the last quarter, the greater volume was offset by lower average selling prices. Increased manufacturing capacity and cost improvements could be one way for Micron to protect itself in the future from downturns in the market. Micron recently made a similar move when it acquired Intel's shares in the flash memory joint-venture IM Flash.

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  • 1 Hide
    hmdhruvarora , March 25, 2012 11:37 PM
    Go Micron!
  • 4 Hide
    A Bad Day , March 26, 2012 3:09 AM
    Let's hope Micron doesn't go down after attempting to swallow Elpida.
  • 1 Hide
    ikefu , March 26, 2012 5:52 PM
    Its nice to see an American tech company on the hardware end trying to get itself ahead. Our software giants seem to be rocking it but our hardware end is struggling.
  • Display all 7 comments.
  • 0 Hide
    Chainzsaw , March 26, 2012 7:35 PM
    Quote:
    Its nice to see an American tech company on the hardware end trying to get itself ahead. Our software giants seem to be rocking it but our hardware end is struggling.


    No love for AMD or NVIDIA? How about Intel? They are the main players in the consumer market.
  • 0 Hide
    Chainzsaw , March 26, 2012 7:37 PM
    Shoot can't edit. But what I wanted to say is they are the main players in the CPU /GPU market.
  • -1 Hide
    mayne92 , March 27, 2012 12:56 AM
    How is Elpida suffering? They are located in just about every single Dell computer sold...
  • 0 Hide
    jerrspud , March 28, 2012 2:28 AM
    "How is Elpida suffering? They are located in just about every single Dell computer sold..."
    because they are sold below cost