Reports: Will Micron spend more on DRAM maker Elpida?

August 21, 2012 — Bankrupt DRAM semiconductor supplier Elpida submitted a restructuring plan to the Tokyo District Court this week, with the details kept confidential. However, several news reports say that Micron Technology Inc. (Nasdaq:MU), Elpida’s sponsor, will pay an incremental Yen 80 billion above the previously agreed upon price for debt guarantees (no other changes were outlined). The Elpida acquisition cost will go up to Yen 280 billion (US$3.5 billion), analysts at Barclays Capital report.

Analysts at Sterne Agee aren’t so sure.They also source a Bloomberg article quoting Asahi, but, based on feedback from Micron, believe that the article just adds the Yen 80 billion capex that Micron had laid out before to the offer price to arrive at Yen 280 billion. Sterne Agee’s analysts do not believe there was any change in deal terms. Micron had proposed a fungible capex of $500 million for Elpida through June 2013 and another $300 million from June 2013 to June 2014. Fungible in the sense that MU could reduce some of its own Capex requirements or move Memory mix around, Sterne Agee concluded.

Micron is not making a statement about the restructuring plan.

Learn more about the Elpida bankruptcy and acquisition:

Micron’s Elpida acquisition: Analysts weigh in

Why Micron’s Elpida buy is undeterred by unsecured bondholder action

Micron must avoid integration pitfalls now that Elpida deal is done

Micron also recently named named John Waite as vice president of global supply chain. Waite will be responsible for all aspects of global supply chain management at Micron including customer delivery, operational planning, forecasting and inventory management.

To learn more about Micron Technology, Inc., visit www.micron.com.

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