Apple Is Helping Lift This Industry With New iPad and iPhone Production

Apple (NASDAQ:AAPL) has been ordering up giant-sized portions of mobile DRAM memory from Elpida Memory Inc.’s 12-inch plant in Hiroshima, Japan, booking about 50 percent of the facility’s total DRAM chip capacity, DigiTimes reported, citing “industry sources.”

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The fact that Elpida recently filed for bankruptcy and has been making moves to sell the business to Micron Technology  apparently is not deterring Apple (NASDAQ:AAPL) from using the company as its mobile DRAM chip supplier for the upcoming iPad and iPhone series. If the takeover happens, Micron would reportedly cut into the supply chain for the next iPad and iPhone devices. None of the companies have confirmed the rumors.

Apple’s insatiable demand stands to give Micron enough of a boost that it could ultimately reconfigure the global mobile DRAM market. The acquisition of Elpida could potentially give Micron the muscle it needs to overtake mobile DRAM-producing heavyweight SK Hynix as the second-largest mobile DRAM producer in the world. Samsung Electronics dominated the global market for mobile DRAM chips in the fourth quarter of 2011 with a 53.8 percent share, followed by Hynix with 20.8 percent.

If Micron and Elpida merge, the combined company would have a monthly production capacity of 374,000 DRAM wafer starts, or 28 percent of global DRAM manufacturing capacity, according to a report by market research group IHS iSuppli. This would put it just behind Samsung, which has capacity for 433,000 wafer starts per month, or 33 percent of global DRAM capacity. Hynix would be kicked back to third place with its 23-percent share, or 300,000 DRAM starts per month. Individually, Elpida usually ranks third in DRAM capacity, with Micron coming in fourth, IHS said.

Investing Insights: Smartphones and Tablets Are Driving Growth in This Industry.