NEW YORK (AP) — Shares of Micron jumped 7 percent Monday after a rival memory-chip maker filed for bankruptcy protection in Japan.
THE SPARK: Elpida Memory Inc., Japan's only maker of "DRAM" computer memory chips, filed for bankruptcy on Monday. It had $5.5 billion in debt, making the bankruptcy case the largest ever for a Japanese manufacturer.
Elpida had suffered from rock-bottom chip prices and fierce competition, particularly from Samsung Electronics Co. of South Korea. Flooding in Thailand late last year added to its woes, as factories shut down and put a crimp in PC sales.
THE ANALYSIS: Sterne Agee analyst Vijay Rakesh said the bankruptcy may take some capacity of the DRAM market, which would help Boise, Idaho's Micron. He noted that when Qimonda, another manufacturer, filed for bankruptcy protection in 2008, that was the start of a year and a half of stable to improving conditions in the memory-chip market.
SHARE ACTION: Micron shares rose 56 cents, or 7 percent, to $8.51 in afternoon trading. The volatile stock has traded between $3.97 and $11.89 in the last 52 weeks.
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