Micron has agreed to a $2.5bn deal which will see the company acquire DRAM hardware specialist Elpida.
The company said that the deal would cover all of Elpida's outstanding debts and would allow Micron to operate the firm as a "sponsor." Elpida has been struggling to stay afloat and has been said to have sought out government assistance prior to making the deal with Micron.
Micron said that the assets acquired in the deal, including Elpida's manufacturing facilities, would be part of a larger deal which will see Micron expand its manufacturing capacity by as much as 50 per cent.
The two companies had been believed to be in talks for an acquisition since February.
"We are creating the industry-leading pure-play memory company," Micron chief executive Mark Durcan said in a statement.
"Today's transactions will help strengthen the combined companies' market position in the memory industry through increased research and development and manufacturing scale; improved access to core memory market segments; and additional wafer capacity to balance among DRAM, NAND and NOR memory solutions for the ultimate benefit of Micron and Elpida customers."
Analysts said the deal should provide major benefits for Micron. With Elpida on board, IHS analyst Mike Howard believes that the company will see its profile in the DRAM market improve dramatically.
“Micron will see its market share and DRAM manufacturing base nearly double as a result," Howard said.
"Furthermore, Micron is gaining access to some excellent mobile DRAM technology, which should greatly improve its product portfolio."
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