Micron to buy Elpida, DRAM market left with 3 competitors

Bloomberg brings news from Japan that U.S-based chipmakerMicron Technology will purchase Japanese rival Elpida. This falls in line with a statement made last month by CEO Mark Durcan that Micron would make the purchase, but only if it could avoid stock dilution and the acquisition of too much interest-bearing debt.

Micron is the last major U.S-based maker of memory chips, well known for its brand of Crucial memory and its solid entries into the SSD space. Elpida is a major supplier or memory chips for Apple.

Elpida filed for bankruptcy in February due a perfect storm of falling DRAM prices and Japan's increasingly strong currency, a combination which makes it difficult to export goods which are both profitable and competitively priced.

Micron is said to be paying about 140 billion yen -- or about 1.76 billion dollars -- just to shed a portion of Elpida's debt. The report also claims that Micron will also be investing about 100 billion yen in Elpida's facilities, a shot in the arm which should bolster its ability to crank out DRAM chips.

Micron's absorption of Elpida will leave the global DRAM market with only three competitors: Samsung, Hynix and Micron. Currently, Samsung owns about 41 percent of the market while Hynix comes in a distant second at 24 percent. Both Micron and Elpida weigh in around 12 percent each, meaning their combined total will essentially tie them with Hynix in terms of market volume.

AMD-branded memory coming to the US

Advanced Micro Devices has announced that they will be bringing company-branded memory modules to the United States. The brand will be introduced with two strategic launch partners: Patriot Memory and VisionTek.

AMD has been supplying and validating memory for Radeon graphics cards for years and they feel that jumping into the volatile system memory market is a clear opportunity for the company. They have used the AMD OverDrive performance optimization tool to test and optimize DRAM in conjunction with their APUs, CPUs, GPUs and chipset platforms. Such insight is now helping them create memory modules for other manufacturers as well.

AMD hopes to take the guesswork out of selecting memory by introducing three different performance tiers. All modules will be available in 2GB, 4GB and 8GB capacities. The Entertainment level will feature 1333MHz and 1600MHz speeds designed for quiet home theater PC applications. AMD’s Performance category will support speeds up to 1600MHz in matched pairs with low latency. The top-end Radeon Edition modules will run at 1866MHz and are tuned, tested and certified for specific AMD platforms.

AMD Memory will be available through major retails including Amazon.com, Bestbuy.ca, Fry’s, Memory Express, Micro Center, NCIX, Newegg, Tiger Direct, VIP Computers (UK) and others in the near future. There’s no word on module pricing but given the state of the market, we don’t expect them to carry much of a premium (if any) over existing kits. AMD has been selling similar kits in Japandating back to August, albeit under different performance categories.

DRAM market remains weak, 2GB DDR3 modules to hit $10

Remember how we said RAM prices probablywouldn't get much cheaper in the near future? Well, that was very wrong. Citing anonymous industry sources, DigiTimes reports today that Kingston has cut deals to sell its 2GB DDR3 modules for as cheap as $11 (yes, that's eleven bucks), and that move has prompted competing firms lower their prices as far as $10. By offering lower prices, DRAM manufacturers expect shipments to rise, but DigiTimes' sources believe the overall demand will remain weak.

Based on DRAMeXchange's stats, contract prices have plunged more than 15% during July and that's expected to continue through August. Average contract prices for 2GB DDR3 modules fell 9.4% to $14.50 in the second half of this month while 4GB modules dipped a similar 9.7% to $28. At the same time, 1Gb and 2Gb chips were $0.75 and $1.59. Etail prices via Newegg are hovering around $25 to $30 for budget 2x2GB DDR3 1333MHz kits, while individual 2GB modules are between $15 and $20.

Last Tuesday, iSuppli released a report claiming DRAM prices would continue to fall -- albeit increasingly slower. "Following a drop of 14.2% in the first quarter of 2011, the global average decline in pricing for DRAM slowed to 12% in the second quarter. The rate of decrease is expected to decline to 9% in the third quarter and then dwindle to just 4% in the fourth quarter. The rate of decrease will further slow to just 1% in the first quarter of 2012, and then remain in the 3 to 4% range during the rest of 2012."

In a separate report released last month, the research firm said DDR4 DRAM would arrive in 2014 and rapidly eclipse DDR3 sales by 2015. Although DDR3 will remain relevant for at least a year or two following the launch of DDR4 modules, the newer technology is expected to represent some 56% of the market only one year after it hit shelves. That's a significantly faster adoption rate than witnessed with DDR3, which took two years to achieve 24% of the market and three years before it finally outgrew DDR2.