Micron up on report of Elpida contract with Apple

Shares of Micron rise on report of Elpida contract with Apple; Micron in talks to buy Elpida

Associated Press

NEW YORK (AP) -- Shares of chip-maker Micron Technology Inc. rose Wednesday as investors hoped that the Japanese company Micron is in talks to buy recently received a big order from Apple Inc.

Citing unnamed industry sources, Taiwan's technology news site Digitimes.com said Apple had recently placed a big order for chips used in its iPad and iPhone devices with an Elpida Memory Inc. plant in Japan.

Boise, Idaho-based Micron Technology said last week that it was in talks to buy Elpida.

Sterne Agee analyst Vijay Rakesh said there's no way of knowing if the Digitimes report is true.

Representatives for Apple and Elpida did not immediately reply to a request for comment.

If the Digitimes report proves to be true, it could mean more sales for Elpida, along with a bigger place in the Apple supply chain for Micron Technology if it acquires Elpida. Apple is the world's most valuable company.

Even if the Digitimes report isn't true, it's likely that Micron Technology's bid for the company will be successful and improve the company's profitability and cash flow, Rakesh said.

"We believe a more constructive deal will be struck sooner rather than later," he wrote in a note to investors, although he hedged that it was possible for there to be no deal.

Tokyo-based Elpida, which filed for bankruptcy protection earlier this year, is the only chip-maker in Japan that specializes in "DRAM" chips used in mobile phones and computers.

Micron shares rose 24 cents, or 4 percent, to $6.26 in heavy afternoon trading. Micron's stock, which often swings widely, has traded between $3.97 and $10.23 over the past 12 months.

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