Micron Wins Japan?s Elpida To Boost DRAM Lines To Asia

Reports by NHK, the Japanese national broadcaster, said the Boise, Ida.-based U.S. maker of dynamic random-access memory chips (DRAMs) had won an auction with a bid of $2.5 billion. The move would bolster Micron against Samsung Electronics (Seoul: 005930), the world's No. 1 DRAM maker and No,.2 chipmaker.

Micron hasn't confirmed the deal nor reported it yet to the U.S. Securities and Exchange Commission.

Already the principal partner of Intel (Nasdaq: INTC), the No. 1 chipmaker, in making flash memory chips, Micron's expansion into Japan would be both a market mover as well as supreme irony.

During the administration of President Ronald Reagan, Micron's management compiled extensive documentation that proved Japanese rivals had dumped millions of DRAMs into the U.S. market, driving Intel, Advanced Micro Devices (NYSE: AMD), the No. 2 microprocessor developer and Texas Instruments, the No. 2 U.S. chipmaker, out of the business.

Micron's crusade also led to the first U.S.-Japan semiconductor agreement that dealt with chips and dumping and established sales quotas.

Later, as Micron's rivals - NEC (Tokyo: 6701), Hitachi Ltd. (Tokyo: 6501) and Mitsubishi Electric (Tokyo: 6723)  -- dealt with steadily declining DRAM prices, they set up Elpida to acquire all their memory chip assets.

Last month, Micron sold convertible senior notes valued at $1 billion, for general corporate purposes that could include strategic acquisitions, the prospectus said.

The chipmaker also reported cash and investments of $2.09 billion at the close of the second quarter on March 2.

Acquisition of the Japanese assets strengthens Micron's patent portfolio and could potentially offer it a manufacturing center in Japan.

International Business Machines Corp. (NYSE: IBM), the No. 2 computer maker, is the only other U.S. maker of DRAM chips, although its IBM Microelectronics unit builds embedded DRAMs used for its advanced servers.

Micron shares, down 40 percent over the past 52 weeks, have risen more than 4 percent this year. They fell a nicekl to $6.50 on Monday.