There is no better metaphor for Japan’s struggling tech industry than the sale of Elpida Memory, the nation’s last maker of DRAM memory chips, to U.S.-based Micron Technology, which has a corporate office in San Jose. The price of $2.5 billion is considered a steal by analysts.
While bondholders of the struggling Japanese company, an Apple supplier that provides chips for smartphones, tablets and computers, oppose the deal, Micron’s San Jose-based President Mark Adams is convinced his company will get the keys to Elpida some time next year.
A panel created by a Japanese court to study the offer and complaint is expected to issue a recommendation later this month.
“I would venture to say it’s not totally unexpected,” Adams said of the attempted push-back from bondholders. “These things happen in the course of acquisitions.”
“We are confident this is the best outcome for Elpida employees and its stakeholders,” he said recently. “We think the next nine to 12 months is when this deal will likely close.”
IC Insights Vice President Brian Matas called the deal a “firesale” that underscored how far the Japanese semiconductor industry, which once dominated the global market, has fallen. (See my recent story on the problems facing Japan’s once-formidable tech industry.)
“They are getting a real nice deal there,” he said of Micron. Elpida has “a well-regarded mobile DRAM portfolio. That’s one of the gems in that deal.”
Japan’s semiconductor industry, Matas added, went “from being the mighty giant that was going to slay everyone else to now being humbled – barely a whimper of what they once were. “