Micron/Elpida Could Challenge Samsung's DRAM Dominance
A combined company would have a capacity of 374,000 wafer starts, according to the market research firm, which is just behind Samsung with 433,000 starts. Micron and Elpida would capture 28 percent market share, while Samsung holds about 33 percent. Hynix would drop from second third place with 23 percent share.
"Overall, a Micron/Elpida merger would present Samsung with its most powerful rival yet," said Mike Howard, senior principal analyst for DRAM and memory at IHS. "Samsung is usually 10 percentage points ahead of its next competitor, but the merger would trim it’s formidable market share lead by half, to 5 percentage points."
Speculation about a possible merger is gaining traction as the concerns over Elpida's mounting debt are rising. Elpida, which currently has about $4 billion in debt, is unlikely to meet its obligations and may either be asking for another bailout or could be forced to merge with a company such as Micron. However, even if the merger is seriously considered, Elpida's substantial debt could break Micron's neck.
IHS also noted that a problem may be Micron's development partnership with Nanya and further speculation suggests that the death of former Micron CEO Steve Appleton, who may have driven the merger idea, could delay an agreement between Micron and Elpida.
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