Site icon MacTech.com

Elpida purchase makes Micron a key supplier for Apple

MicronLogo.jpg

Micron Technology (http://www.micron.com) and Elpida Memory have signed a definitive sponsor agreement for Micron to acquire and support Elpida, a major supplier of DRAM to Apple. The agreement has been entered into in connection with Elpida’s corporate reorganization proceedings conducted under the jurisdiction of the Tokyo District Court.

Under the agreement, 200 billion Yen (approximately US$2.5 billion assuming 80 Yen/USD) total consideration, less certain reorganization proceeding expenses, will be used to satisfy the reorganization claims of Elpida’s secured and unsecured creditors. Micron will acquire 100% of the equity of Elpida for 60 billion Yen (approximately $750 million) to be paid in cash at closing.

In addition, 140 billion Yen (approximately $1.75 billion) in future annual installment payments through 2019 will be paid from cash flow generated from Micron’s payment for foundry services provided by Elpida, as a Micron subsidiary. As a result of these payments, all pre-petition debt obligations of Elpida will be fully discharged under the corporate reorganization proceedings. The agreement also calls for Micron to provide certain financing support for Elpida capital expenditures, subject to specified conditions, and to maintain Elpida’s operations and employees.

With the purchase of Elpida Memory, the third-largest DRAM maker, Micron Technology not only becomes a tier one supplier, “it also catapults itself into the mobile space as a supplier to leading smartphone and tablet makers, including Apple,” notes “Computerworld” (http://macte.ch/xZ4Bv).

“It’s a significant improvement for [Micron],” Mike Howard, an analyst for industry research firm IHS iSuppli, told “Computerworld.” “They were a tier-two player when it came to mobile. They had a tough time getting designed [into products].”

Exit mobile version