SAN FRANCISCOŚMemory chip vendor Micron Technology Inc. did not address rumors that it has been in talks to invest in or acquire Japan's Elpida Memory Inc. at its analyst day Friday (Feb. 10), but at least one Wall Street analyst believes the companies remain in negotiations.
"We believe Micron continues to be in negotiations, with the most likely outcome being asset purchase," said C.J. Muse, an analyst at Barclays Capital, in a report circulated Friday. Barring intervention from the Japanese government, DRAM industry consolidation involving Elpida is all but inevitable, and likely a positive for Micron, Muse wrote.
Elpida, which has been losing money hand over fist as DRAM prices have sunk, is mired in debt and has a debt payment of more than $1 billion due in April. The company earlier this year was reportedly scouring for strategic investment by customers to help it meet its obligations. Rumors of a possible deal with Micron have been circulating for weeks.
Muse said investors were likely to walk away from Micron's analyst day encouraged following presentations by new CEO Mark Durcan and new President Mark Adams. Both were promoted late last week following the death of longtime CEO Steve Appleton. Muse said Micron's swift transition to new management boded well for the company.
It is very difficult for large memory company to be a foundry, for a hundred different reasons. Micron bought Rendition and it was a disaster. Infineon made embedded memory for a while, but gave up. I think Vanguard and Winbond do memory based foundry. They are smaller companies without cutting edge processes.
At long last an Engineer as an CEO at Micron. Perhaps strategy decisions will now be taken based on technology not testosterone. Micron needs to do the obvious ( even Hynix is talking about it ), i,e. get into processors. Getting out of the rut would require moving design out of inbred Boise to Silicon Valley.
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