I guess the point of all the sources of negative comments was, why bother to have Elpida's capacity? Isn't it too much DRAM capacity that is driving the market out of equilibrium. Natural death of excess DRAM companies was supposed to be best way out.
Wow so much negativity here on this purchase. If there's something Micron is good at doing is absorbing other Dram companies. Inotera is just starting to bear fruit for them. All others Toshiba,TI has played and been a major successful part of Micron for more then a decade now. Micron's success is driven because there DRAM portfolio consist more of higher margin products(servers, rldram) Even though they lost money for the past few quarters doesn't mean that they'll be unsucessful. They operating cash flow was profitable even throughout the Great recession also maintaining roughly 2 billion in cash throughout this period. All those fab equipment depreciates and are written off as loses also.As far as microns new management, Duncan is doing everything that Appleton would of done. Buying low sell hi, increase production then kill the competion. Hynix should of been part of Micron if it wasn't for South Koreas government. New fab these day cost 5 billion to build also the time to find experienced employees. Micron gaining roughly 200,000 wafer per month in capacity for 1.75 billion and updating the Hiroshima plant with the remaining money is an excellent deal. They also just signed and agree with Powerchip to purchase the shares of Rexchip(pending Elpidas deal going through) Micron will not be converting to Elpidas process, they will most likely convert over to Microns more successful product mix and Elpida's mobile process will eventually get converted overa as well. Also some of that capacity will probably be converted to NAND as well.
Elpida already has 25nm process so Micron just needs to finance their upgrade. Also lets not forget Taiwan. This deal ties Micron, Nanya, Inotera, Elpida, Rexchip, and Powerchip together. Micron may go bankrupt in 2 years.. or they will survive and become #2 right on Samsung's heals.
Overall, I am happy to hear it. I am vested in a design using their products, and signs of strength that indicate longevity is nice.
They are aggressively expanding, and as I understand it, they venture into the next logical phase.
I think we will see some advances from this, but not till upgrades are complete.
In today's world, as ever, "Keep your cards close to your vest!" Good words.
What worries me a little bit is that, if this report is accurate, Micron is spending $1.75 billion to pay off Elpida's creditors, then plunking down $1.26 billion to invest in Elpida's fabs, presumably increasing capacity. If that is true, I'm afraid we won't be seeing the results the analysts hoped for in terms of reduced overall DRAM capacity.
The analysts said that it would be better to not have so much DRAM manufacturing capacity. If Micron agrees, they would more likely buy Elpida if they think Elpida's DRAM technology is better (can replace Micron's DRAM technology).
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