Micron’s (NASDAQ:MU) CEO Steve Appleton died Friday in a plane crash in Boise, Idaho. Micron’s Board of Directors has appointed D. Mark Durcan, formerly the company’s president and chief operating officer, to the position of CEO. Appleton faced several challenges to the industry during his tenure and led Micron through several economic downturns. Among his major accomplishments was Micron’s acquisitions of Texas Instruments’ DRAM business in 1999 and Toshiba’s DRAM business in 2001, both of which alleviated DRAM oversupply conditions and secured Micron’s sustainable core technological competence.
The death of longtime Micron Technology Inc. Chairman and CEO Steve Appleton could throw off the rumored collaboration talks between Micron and Japan’s Elpida Memory Inc. and delay much needed industry consolidation.
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Elpida recently reported its fifth consecutive quarterly loss and is struggling with heavy debt as it needs to replay US $1.2 billion in April. It was rumored to be in talks with Micron over a possible merger of investment in recent weeks. This would have provided much needed consolidation to the struggling DRAM industry, which is currently under significant pressure, with declining average selling prices and oversupply problems.
Micron and Elpida each held around 12% of the DRAM market as of the end of the third quarter of 2011. Korea based Samsung was the market leader with a 45% market share while Hynix held around 20%. Micron was also the fourth-largest NAND player, with market share of 11.3%, in the third quarter of 2011.
A Micron-Elpida tie-up would lead to a broad integration among Taiwan’s DRAM makers, many of which have partnership ties with Micron or Elpida. Although Taiwan’s DRAM makers and Elpida are as advanced as Samsung in DRAM technology, they have thin profit margins due to selling individual memory devices in an oversupplied market, whereas Samsung and Micron have integrated different memory devices into one resulting in a better profitability.
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