Who’s Crazy Enough To Buy Elpida?
Would you pay $10 billion to get 17% of a $10 billion a year market?
Only a DRAM manufacturer would be crazy enough, you might think, and three of them, SK Hynix, Toshiba and Micron are apparently that crazy.
But there’s also so a fourth bidder for the assets of bankrupt Elpida which holds a 17% share of the $10 billion annual revenues commanded by the mobile DRAM market.
The fourth expected bidder is Texas Pacific Group (TPG) a private equity company.
Apparently bids of around $ 2 billion will be necessary to win the auction.
And, according to Merrill Lynch, a buyer would then have to invest $3 billion to get Elpida’s manufacturing capability into shape.
And furthermore – it gets worse – a bidder would have to take on Elpida’s $5.5 billion of debt.
So who’s crazy enough to do all that?
On the 27th, when final bids are due, we’ll know.