SAN FRANCISCO—A group of bondholders in bankrupt Japanese memory chip vendor Elpida Memory Inc. believes Micron Technology Inc.'s bid to acquire the firm's assets is too low and is in negotiations with South Korea's SK Hynix Inc. and U.S.-based foundry Globalfoundries Inc. on an alternative plan, according to a report by the Reuters news service Monday (May 21).
The report, which cites an unnamed source, said Globalfoundries is interested in buying Elpida's main fab in Hiroshima, Japan, while Hynix is interested in buying the firm's share of Rexchip Electronics Corp., a joint venture between Elpida and Powerchip Technology Corp.
After weeks of speculation, Micron confirmed on May 10 that it was in talks to acquire Elpida, which put itself up for auction after filing for bankruptcy protection in February. According to an earlier report by Reuters, Micron won the exclusive right to buy Elpida after bidding more than $2.5 billion.
Hynix, formerly known as Hynix Semiconductor Inc., made an initial bid to acquire Elpida in the first round of bidding, but reportedly dropped out of the bidding before the final round.
Micron's bid to buy Elpida was filed with the Tokyo district court earlier this month. According to Monday's Reuters report, the submission of an alternative plan is highly unusual in Japanese bankruptcy cases. If Hynix and Globalfoundries agree to pay a higher price than Micron, it would need to approval of the Tokyo district court before being put to a vote of Elpida bondholders, according to the report.
The report said a spokesperson for Hynix denied that the firm was in talks with Elpida's debt holders.
When Qimonda went under, Micron and others were able to hire the ex-Qimonda engineers they wanted most, and TI bought all the equipment from their Richmond fab at very good prices. Micron can benefit from the Elpida implosion the same way. I don't understand why buying a disfunctional company and assuming all of their debts is a good thing. Let the company liquidate and acquire the pieces you really want.
I've suggested before the DRAM, in fact memory industry generally, needs to coordinate into an association for the specific purpose of educating government oversight on the need for a DRAM and perhaps NAND Flash price floor. At the trailing edge of the CMOS cost curve moving to disruptive memory technologies, materials and structures, something has got to offset the price of development. Agreement on price floor(s) can offset development investment while deterring the collusive price fix by recognizing the actual economics of a sustainable business. And regardless of the supply that results because it may still be excessive can stabilize procurement into future time. This is not to suggest that end buyers should pay more. End buyers should pay no more than an adequate competitive profit for components that support industry sustainability and reinvention required through a phase transition. Mike Bruzzone, Camp Marketing
Is this going to turn into a bidding war?
Analysts said Micron buying Elpida would be good for DRAM as a whole. If indeed Hynix and Globalfoundries but the company's assets, is it still good news for the DRAM industry?
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