There are four DRAM manufacturers after Elpida tanked and filed for bankruptcy recently. Elpida is one of the world’s largest manufacturers for mobile DDR2 and DDR3 RAM chips, which find their way into mobile phones, tablets, laptops and even fridges with an internet connection. Thanks to the super-low DRAM prices and the huge amount of stock floating around, manufacturers just aren’t earning what they used to anymore, with the result that sooner or later one of the bigger players will crash or stumble quite a bit. Elpida was one of those companies. If the trend of ever-decreasing prices continues for desktop RAM modules, another may tank over as well.
If you’re unfamiliar with Micron, it’s because they’re one of the four memory manufacturers who produce memory chips for other brands. Its fighting for dominance in the market with Samsung, Hynix and Winbond all trying their very best to get the lion’s share of the market. But this is only a tip of what Micron’s plans have revealed thus far. Hit the jump to find out more.
Because there are only four memory manufacturers for desktop RAM, its a bit hard for companies like Micron to differentiate without spreading themselves too thinly. Its different for a behemoth like Samsung who runs their own fabrication plant and supplies over a dozen different brands with different products and started out doing things that way early on in the game. Micron and companies like it only have acquisitions to consider and with the crash of Elpida, a force in the mobile DRAM market, it looked like a good way to go.
Not only is Micron buying out Elpida for the princely sum of $754 million while the rest goes to cancelling its debt, its also planning to purchase a 24% stake in another chip manufacturer, Rexton Electronics. Surprisingly enough it looks like even this plays to Micron’s hands really well, as Elpida owns a controlling stake in Rexton, giving the parent company a total of 89% ownership. The Elpida deal will see Micron’s manufacturing capabilities jump up by 50%, as well as giving it more leeway to push into the mobile RAM market with companies like Apple, HTC and Motorola as possible customers.
I do hazard though that all is not well in the DRAM market. If you were eyeing a nice 8GB DDR3 kit, now’s the time to buy because I’m estimating that the market will tank and/or freeze within the next two months, causing a price shift upwards in order for manufacturers to cover their costs. Its the same with the hard drive market, with the only two remaining players staying at their fixed price levels long after flood damage to their factory in Thailand despite a greater uptake in hard drive sales over last year. Once the number of RAM manufacturers drops to three or less, you can expect some more price fixing to go on in that segment for a long time.
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