Micron will soon buy Elpida for 200bn yen (about $2.5bn), of which 140bn yen will be used to pay off debts, says DRAMeXchange.
As the Japanese memory maker currently owes 420bn yen, lenders will have to write off approximately 70% of the debt if Elpida is to recover.
Furthermore, Micron is throwing in an additional 100 billion yen to help convert Elpida's Hiroshima fab into a mobile DRAM production plant, and plans to continue migration from the currently mainstream 45nm process to 30nm and 25nm technology.
After the merger formally takes effect, Micron and Elpida will likely work to integrate production, which will bring sweeping changes to the industry landscape and supply chain relationships.
Looking at 1Q12 revenue market share figures, Micron and Elpida came in third and fourth with 11.6% and 12.4% of the market, respectively, still a good distance behind second-place maker SK Hynix, who came in with 23.9% market share.
When Micron and Elpida have integrated, their combined market share will bring the Micron team's market share to nearly 24%, surpassing SK Hynix's to become second only to Samsung.
As for mobile DRAM, currently Micron and Elpida's market shares are 5% and 14.7%, respectively, which will amount to 19.7% after the merger, beating out SK Hynix's 18.9%.
"The DRAM industry is heading towards an oligopolistic market," says DRAMeXchange, "the emergence of three major DRAM players will help DRAM chip price gradually stabilize, bidding farewell to the price-slashing market competition of the past."
Micron will concentrate its efforts on server DRAM and NAND flash products, with the majority of production taking place at its Singapore fab.
Elpida will focus on mobile DRAM production, already evident in the increase of mobile DRAM capacity to 70% at its Hiroshima fab.
With the additional 100 billion yen from Micron, Elpida will be able to advance its process technology, which, when combined with Micron's NAND flash technology, will enable the team to target the smartphone market with MCP products.
Rexchip is expected to continue focusing solely on commodity DRAM production; capacity is currently around 75K wafers per month. Rexchip's R2 fab is idle at the moment, and Micron is considering the plant for NAND flash production in anticipation of strong market demand.
At Winbond, Micron has reduced commodity DRAM production and plans to increase the server DRAM output ratio to over 50%. As the cloud computing market is on the rise and Micron has strong ties with other U.S. manufacturers, the team's server DRAM market share is likely to increase in the future.
Powerchip is negotiating for authorisation to use Micron's 20nm process technology on commodity DRAM production.
If Micron's plans go smoothly total monthly capacity will increase to approximately 400k wpm, representing 35% of global DRAM capacity. The Micron team will be on a level playing field with Samsung and SK Hynix, joining the Korean makers as the third heavyweight in the DRAM industry.
