Elpida has been beset with difficulties for being unable to repay debts of 448 billion yen. The company had filed for bankruptcy protection in February.
Micron has also been hit by the lower demand and falling prices of DRAM chips, facing a loss of USD 224 million in the three months to 01 March.
The deal will help strengthen the combined companies’ market position “through increased research and development and manufacturing scale” and “improved access to core memory market segments,” according to Mark Durcan CEO of Micron Technology.
Micron said that output from Elpida and Rexchip factories could increase its current manufacturing capacity by almost 50%.
“We’ve always had deep requirements for additional capacity and this puts us in great shape to respond to that,” said Mark Adams, president of Micron.
Elpida will also allow some flexibility to Micron in terms of expanding its future capacity by diversifying its product range.