FTC approves Micron, Elpida merger

The China Post news staff

TAIPEI, Taiwan — The Fair Trade Commission (FTC) yesterday approved memory chip-maker Micron’s application to acquire Elpida and its subsidiary Rexchip, saying the merger does not impede fair trade. Although the merger will create the world’s second largest manufacturer of dynamic random access memory (DRAM) chips by market share, it still faces competition from numerous companies like Samsung and Hynix, the FTC said. After the merger, the new company will still trail far behind Samsung, which has a market share of 40 percent, the FTC said. Its market share will be closer to that of Hynix, the agency said.

Though Samsung, Micron and Hynix look set to divide among themselves a sizable part of the global DRAM market — creating oligopoly concerns — the FTC still approved the merger because of three factors. First, Micron’s acquisition of Elpida aims to keep the latter in business, maintaining market competition. Second, DRAM manufacturers in the market are largely positive about the merger. Third, the merger will increase the output of high-end memory products such as mobile DRAM and NAND Flash at Taiwan contract firms and therefore raise the island’s overall competitiveness. The FTC approved the merger as per Article 12, Section One of Taiwan’s Fair Trade Act, the commission said. Nanya Technology and Inotera, Taiwan-based DRAM manufacturers and strategic partners with Micron, yesterday praised the merger.

“We are not surprised by the FTC’s decision and we are pleased with it,” said Nanya Technology.