New York, July 2 (FinanceEnquiry.com) – Micron Technology Inc (NASDAQ: MU) best known for producing a wide variety of semiconductor devices has agreed to buy Powerchip Technology Co (5346)’s share in Rexchip Electronics Co as the US company negotiates to take over Elpida Memory Inc making it memory-chip industry’s largest amalgamation in four years.
Rexchip Electronics Corporation is a joint venture between Taiwan’s Powerchip Technology Corporation (Powerchip) and Japan’s Elpida Memory, Inc. Both Powerchip and Elpida will be providing several key management positions in order to support operations.
Rexchip, combining Elpida’s advanced R&D strength together with Taiwan’s manufacturing efficiency specializes in the production of high density/high performance DRAM (Dynamic Random Access Memory). Powerchip and its fully owned Li Hsin investment unit will sell 691 million shares in its Taiwan venture with Elpida for NT$9.7 billion ($325 million), the company said in an exchange filing today.
However, Powerchip spokesman Eric Tang informed that the deal is conditional on Elpida’s purchase by Micron. Micron has got the approval in May to acquire Elpida after the company filed for insolvency in February this year after facing huge losses for five continuous quarters. Elpida’s merger with Micron will double Idaho-based Micron’s market share of dynamic random-access memory-chips, the most commonly used in computers.
Dan Francisco, a spokesman for Micron, said in an e-mailed statement today that under the proposed arrangement with Powerchip, if Micron entered into an agreement to acquire Elpida, Micron would have the right to purchase the Rexchip shares held by Powerchip.
According to a report by Nikkei newspaper on June 29, Micron will be buying Elpida for about 200 billion yen ($2.5 billion).
Rexchip’s shares rose 1.5 percent and closed at NT$9.03 as of 10:14 a.m. on Taiwan’s GreTai OTC exchange and Powerchip recorded its highest close in two weeks after moving up by 3.6 percent to 57 NT cents.
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