Micron Shares Soar After Japan’s Elpida Collapses

Shares of Micron Technology, the only U.S. maker of PC memory chips, soared more than 9 percent after the collapse of its Japanese rival, Elpida.

Micron shares closed at $8.56, up 61 cents or 8.5 percent, after surging as high as $8.79, up 9.3 percent. That was the biggest gain since last June. Earlier, Elpida, the Japanese giant formed from the merger of divisions of NEC and Hitachi,with later additions from Mitsubishi Electric, filed for bankruptcy in Japan, listing liabilities of 448 billion yen (U.S. $5.5 billion).

The Elpida collapse narrows the market for dynamic random-access memory (DRAM) chips, necessary for every PC and laptop because they retain previous programs and operations.

Micron, in Boise, Ida., became the sole U.S. manufacturer to remain in the sector after the semiconductor giants including Intel, Advanced Micro Devices, Motorola and Texas Instruments left the field to Japanese and South Korean rivals. Only IBM, the No. 2 computer services company, still makes DRAMs but they use new technologies for more advanced servers, not PCs.

Elpida's collapse boosts Micron as well as Samsung Electronics of South Korea and Nanya Electronics of Taiwan, which remain active in the sector. Micron's market value is $7.85 billion.

Indeed, there had been speculation before Micron CEO Steve Appleton, 51, was killed in an airplane crash on Feb. 3 that Micron might merge with Elpida or Nanya.

New Micron CEO Mark Durcan, 51, has not commented on the speculation. Durcam, who had been scheduled to retire from Micron this year, has not said if he will remain as permanent CEO.

Other major players in the DRAM sector are Hynix, the No. 2 South Korean maker. Samsung has nearly half of the market, estimates DRAM Exchange, with Micron holding about a 12 percent share, behind Hynix's 23 percent share.