Micron Adds Fabrication Capabilities, Now No. 2 Flash Maker

Micron becomes the world's No. 2 producer of flash media, ranking only behind Korean IT giant Samsung.

Solid-state semiconductor maker Micron Technology is building out its manufacturing arm in a big way in the Far East.

The Boise, Idaho-based chip maker announced July 31 that it has closed the acquisition of the assets of Japan's bankrupt Elpida Memory by about $2 billion. In a second—and related—transaction, Micron also announced the acquisition of a 24 percent share of Rexchip Electronics Corp. from Powerchip Technology Corp.  

The transaction will result in Micron becoming the world's No. 2 producer of flash memory, ranking only behind Korean IT giant Samsung. Micron's production will increase by 45 percent and give the company a more strategic position in the manufacturing of NAND and NOR flash for tablet and smartphones.

Elpida's assets include a 300-millimeter DRAM fabrication facility located in Hiroshima, Japan; an approximate 65 percent ownership interest in Rexchip, whose assets include a 300mm DRAM fabrication facility located in Taiwan; and a 100 percent ownership interest in Akita Elpida Memory, whose assets include an assembly and test facility located in Akita, Japan.

Micron will control approximately 89 percent of Rexchip's outstanding shares and 100 percent of Rexchip product supply. The manufacturing assets of Elpida and Rexchip together can produce more than 185,000 300mm wafers per month, which equates to an approximate 45 percent increase in Micron's current manufacturing capacity.

Elpida had built a strong presence in Mobile DRAM, targeting mobile phones and tablets. Micron is a leader in delivering enterprise DRAM products for networking and servers as well as offering a wide product portfolio in NAND flash memory and NOR.

Micron CEO Mark Durcan said that the deals will enable Micron to become "the industry's leading pure-play memory company. This combination will result in enhanced R&D and manufacturing scale, significant cost and production synergies and a stronger memory product portfolio to provide solutions to our customers," he said.