In what is considered to be a game-changing acquisition, Micron, a leading chip maker, will buy its bankrupt rival Elpida Memory, for $2.5 billion, making it the second largest chip maker in the world.
According to market sources, after the takeover, the Boise, Idaho-based Micron will enjoy a 24 percent market share, only behind Samsung which has 42 percent share.
Elpida Memory, formed in 1999 when NEC and Hitachi decided to merge their chip making business, was the world’s third largest chip maker. The Japanese company has a strong presence in the mobile DRAM market and has been a major supplier of memory to Apple.
In fact the third generation iPad still uses Elpida memory. However, the price volatility in the market forced it to file for bankruptcy in February. By then, its debts had mounted to a whopping $5.6 billion.
Commenting on the deal, analyst noted that Apple might have influenced Micron’s bidding in an effort to avoid disruptions to its mobile DRAM chip supply.