Elpida, in Bankruptcy, Dethrones Micron in DRAM Market Rank

Elpida displaced Micron Technology from third place in DRAMs. Ironically, Micron is the company most likely to acquire Elpida.

Truth is certainly stranger than fiction sometimes, as the latest dynamic RAM market report from IHS iSuppli finds now-bankrupt Japanese chip maker Elpida Memory managed to unseat Micron Technology€”the supplier most likely to acquire Elpida€”from its third-place ranking in the DRAM market for the first quarter of 2012.

Ironically, Elpida outperformed the overall industry by increasing revenue by 1 percent from the fourth quarter of 2011 and grabbing 12.6 percent market share. U.S.-based Micron dropped 3.4 percent and landed in fourth place, with revenue of $759 million compared with Elpida€™s $780 million.

The top two DRAM suppliers, perennial market leader Samsung and Hynix Semiconductor, posted declines in growth of 9.7 percent and 2.4 percent, respectively, accruing respective revenues of $2.5 billion and $1.5 billion.

€œElpida€™s displacement of Micron for the No. 3 spot is paradoxical, especially as Micron on May 7 won the right to bid exclusively to buy the Japanese company, after Hynix Semiconductor Inc. and Toshiba Corp. dropped out of the bidding race,€ Mike Howard, senior principal analyst for DRAM and memory research at IHS, said in the report. €œBecause it would derive the most benefit and has the requisite cash to make a deal, Micron was the most logical choice to purchase Elpida, which filed for bankruptcy in February after incurring more than $5 billion in debt and running up a string of quarterly losses.€

Samsung captured 40.8 percent of the market share in the first quarter of this year, followed by fellow South Korean player Hynix Semiconductor with 24.2 percent, Elpida, and Micron with 12.2 percent. Nanya, which with 24.2 percent boasted the market€™s strongest sequential growth, rounded out the top five with revenue of $282 million and a market share of 4.5 percent. The total DRAM market slid 4.4 percent from the fourth quarter of 2011 to the first quarter of 2012, posting overall revenue of $6.2 billion, down from nearly $6.5 billion in the previous quarter.

€œMicron now must negotiate with Elpida on a number of sensitive issues, including retiring or restructuring the Japanese maker€™s massive liabilities,€ the report noted. €œMicron must also figure out what to do with Elpida€™s huge facility in Hiroshima, Japan, especially as the strength of the yen renders manufacturing there uncompetitive.€

Elpida was originally called NEC Hitachi Memory, which was formed with the combination of NEC's and Hitachi's DRAM businesses.