Micron Technology, Inc (NASDAQ:MU) powers-on in DRAM space
Just about a year ago, Micron Technology, Inc (NASDAQ:MU) had entered into an agreement to acquire Elpida that recently went bankrupt. SK Hynix, Toshiba also contemplated buying Elpida but reversed that thought since they felt that the DRAM business would prove to be a crash-drain.
The bidding game
TPG has also shown some interest for a short period of time as it is always willing to try out new things in its business. However, there was a chance that TPG would liquidate Elpida and its offer fizzled-out. The rest of the bidders also fell down like bowling pins and Micron was the only one left standing. It was the only company who was willing to operate Elpida and keep the Japanese actively involved in the semi-conductor business. This deal was sealed on 31 July 2013, a few steps ahead of the 9 August 2013, summer analyst-meeting.
The company said that though they would have liked to put forward the entire pro-forma of financial, those details will show up only in the company’s Q4 report that is slated to come out in October. Nevertheless, MU provided a peek into its operations and the level of growth that the Elpida buyout will add to its earnings.
The acquisition is almost perfect on the cost, timings and effect front. It will affect not just Micron, but the DRAM industry as a whole. When this agreement had been drawn out the DRAM business had been so dismal, the mere mention of the Elipda acquisition brought in expressions ranging from dismay to disgust from various industry insiders.
The weather changes
In a turn of fate, soon after the rest of the bidders vanished from the scene, Elpida got a flood of orders from APPL. These orders had been snatched from Samsung’s mouth and channelized to Elpida. Now that the company has become the biggest DRAM supplier for Apple, is there anything to rein it in from becoming the world’s largest NAND supplier?