Memory Maker Elpida Bankrupt
DRAM Chip Manufacturer Files for bankruptcy
Elpida, Japans’s only manufacturer of DRAM memory chips is bankrupt. Elpida filed for bankruptcy on Monday February 27. Elpida claims losses of $5.5B and is unable to continue trading. Elpida had been struggling for some time in a market dominated by South Korean chip makers able to undercut prices, even a Japanese government emergency loan package from the Development Bank of Japan in 2009 failed to keep Elpida afloat.
Bankrupt Chipmaker President Yukio Sakamoto Stated:
Yukio Sakamoto, president of Elpida told news services the strong Yen was partly to blaim, coupled with offers from potential partners falling through.
“We have lost our competitive edge completely against South Korean companies as the yen has strengthened against the Won, our efforts as a single company alone cannot make up for the steep surge in the value of the Yen over the past year.”
“The company had been pushed into bankruptcy when offers from potential partners fell through. We had been expecting various offers by today but what we got was not concrete.”
Third Largest Chip Maker
Elpida was the world’s third biggest DRAM maker and once had a considerable share of the global DRAM market. Back in 1987 Japanese DRAM manufacturers controlled around 70 percent of the global market for memory chips.
Elpida was formed in 1999 when two manufacturers in Japan, NEC and Hitachi, merged their memory businesses to the same year a Fujitsu, pulled out of the DRAM manufacturing business.
Elpida’s bankruptcy is the largest ever to strike Japanese industry. Elpida will for the immediate future be under court administrated re-structuring, however hopes are not high that the Japanese chip giant will be able to regain their place in the market. Samsung and Hynix have taken the lion’s share of the memory chip market share in recent years, and with South Korean production costs being much lower than Japan’s, the future does not look good for Elpida.
What Elpida’s Bankruptcy Will Mean to Computer Users
Consumers of computer memory devices using DRAM chips will probably see an almost immediate rise in prices of all products using dynamic memory (DRAM) chips. Fewer manufacturers mean less competition, inevitably leading to higher prices. I believe high performance memory devices will see the greatest price rises – Elpida manufactured chips for high-end DDR DIMM modules from brands like Corsair. Memory Price Rise Expected (SME Technology)
- Japan’s only DRAM chip maker files for bankruptcy (zdnet.com)
- Bankruptcy for a Builder of PC Chips (nytimes.com)
- Elpida goes under after yen, debts take toll (japantimes.co.jp)