The DRAM memory market is about to become a triopoly.
A brutal price war triggered a wave of bankruptcies some five years ago, but not all the companies left standing came out stronger on the other side. Elpida was Japan's last great hope but filed for bankruptcy earlier this year. A bidding war (so much nicer than price wars!) erupted over the company's assets, and it looks like we have a winner.
Reuters and others report that according to anonymous sources, Micron Technology
Micron might be able to negotiate the final price tag even lower by throwing in other perks, but the battle has largely been fought and won.
So what's this "triopoly" I'm talking about? Well, Micron and Elpida together control about 28% of the market for DRAM chips, according to reports by IHS iSuppli. Samsung is No. 1 with a 33% share, and Hynix grabs 23% of all DRAM sales. That's 84% of the total market, leaving minor players like Toshiba, Nanya, and Winbond to fight over a scant 16% slice.
The situation is even more polarized in DRAM for mobile computing, where Samsung controls more than half of the market, and the proposed big three would own a stunning 98.9% of all sales. Importantly, Micron would buy its way into the booming Apple
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Fool contributor Anders Bylund owns shares in Micron but holds no other position in any of the companies mentioned. Check out Anders' holdings and bio, or follow him on Twitter and Google+. The Fool owns shares of Apple. Motley Fool newsletter services have recommended buying shares of and creating a bull call spread position in Apple. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinion, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.