Rumor: Hony Capital May Sell Elpida DRAM Plant to SMIC


Nikkei News quoted an industry source on May 1 as saying that after completing its acquisition of Japanese DRAM manufacturer Elpida Memory, Beijing-based private equity firm Hony Capital plans to sell or outsource the company's Hiroshima DRAM plant to Chinese semiconductor foundry Semiconductor Manufacturing International Corporation (SMIC) (NYSE: SMI, 0981.HK).

Hony has joined with private equity firm TPG Capital and SMIC to acquire Elpida. Micron Technology, Toshiba, and SK Hynix have all expressed interest in acquiring the company.

Nikkei News noted that Legend Holdings, Hony Capital's parent company, is the largest shareholder in Chinese laptop, PC, and handset manufacturer Lenovo (0992.HK), whose computers and smartphones use DRAM chips from Elpida and Samsung. Lenovo and Samsung have disputed the price of DRAM, however, leading the computer maker to rely increasingly on Elpida products. Lenovo may be concerned that a successful acquisition of Elpida by another company could affect its chip supply.


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