Micron Technology has made an agreement to acquire Elpida Memory for $2.5 billion. Micron will acquire the bankrupt Japanese chip company for 60 billion yen ($754 million) in cash. Micron will then pay 140 billion yen in annual installments to cover Elpida’s debt.
Boise, Idaho based Micron also announced today that they will be buying a 24% stake in Rexchip Electronics Corporation for about $334 million. Since Elpida owns a 65% stake in Rexchip, Micron will own 89% of that company once both of the deals are closed.
Elpida is known for making dynamic random-access memory chips that is used in personal computers. Elpida filed for bankruptcy earlier this year because of mounting debt and falling chip prices. Micron will be expanding their manufacturing capacity at a low price through the acquisition.
Elpida has a large chip fabrication factory in Hiroshima, Japan and Rexchip has one in Taiwan and a testing facility in Akita, Japan. The deals are expected to increase manufacturing capacity by 50%.
?We get significantly inexpensive or less costly assets,? stated Micron CFO Ronald C. Foster in a conference call on Monday morning. ?It?s a very economic solution for us.?