March 21, 2012 — Barclays Capital weighs in on rumors that Micron Technology (NASDAQ:MU) offered $1.5 billion to take over Elpida (Digitimes, 3/21/2012), noting that Micron was in talks for Elpida’s assets even prior to Elpida’s bankruptcy filing. Should the offer stand, it would be about 20-30 cents on the dollar for Elpida’s assets.
New leading-edge wafer fab capacity costs ~$30M per 1k/wafer starts per month (WSPM) with next generation node shrink costing ~$7.5M per 1k/wspm. Hiroshima currently has ~120k wspm and Rexchip ~85k, this suggests completely new capacity would cost ~$6.3 billion, Barclays estimates.
An asset sale to Micron or another chipmaker for pennies on the dollar is "the best scenario" for Elpida, Barclays concludes. Elpida is expected to solicit bids from investors over the coming weeks and potential buyers are scheduled to enter the first round of bidding in March, with second round in April, and a decision made by May. A Trustee has not been appointed yet, and the choice could have "important implications to Elpida’s restructuring." If courts announce an independent trustee, Barclays expects a delay in the resolution of the Elpida matter, but appointment of Yukio Sakamoto, Elpida’s president, could signal a quicker resolution. A resolution might not come until the July/August timeframe.