The DRAM industry is not for the faint hearted. Add to the inherent “dynamic” nature of this biz, the waning of PC biz and onslaught of mobile tsunami and things definitely start gettimg pricklier.
Earlier this week, the Japanese DRAM maker, Elpida filed for bankruptcy. According to Q4 ’11 figures, Elpida had 12% of the market share, slightly trailing behind Micron (12.1%) and the top 2 players – Hynix (23.3%) and Samsung (44.3%).
Consolidation was waiting to happen in the DRAM space and now prices should hopefully stabilize. One company that does stand to gain here is Micron, the only non-Asian player in this market. It saw its shares rise on this news. A decade back, Micron walked away from a transaction under which it would have acquired the memory operations of South Korea’s Hynix Semiconductor. Now it has another opportunity where it can buy capacity cheaply (Elpida’s Hiroshima plant).