Elpida files for bankruptcy


Elpida Memory Inc. resolved to file a petition for the commencement of corporate reorganization proceedings at today's meeting of the board of directors, and filed the same with the Tokyo District Court. Elpida's consolidated subsidiary, Akita Elpida Memory Inc., also saw the commencement of corporate reorganization proceedings, and there is a possibility that claims against the said company may not be collected. Nikkei called the bankruptcy protection filing "the largest corporate failure among Japan's manufacturers since the end of World War II."

If more than 25% of Elpida's manufacturing capacity is taken offline, the global average selling price (ASP) for all DRAM shipments is projected to rise to $1.21 by the end of 2012, up 15.5% from $1.05 at the end of H1. The figure shows global ASP for all DRAM shipments (global DRAM revenue divided by gigabit shipments). SOURCE: IHS iSuppli Research.

Elpida cites sluggish DRAM growth in personal computers, as well as an increase of the capacity of DRAM per unit, for its overcapacity after 2006-2007 capital expenditures on wafer fabs and equipment. "At the beginning of 2007, the price of DRAM started falling sharply and, combined by a significant decrease of demand for the products due to the global economic downturn begun in the fall 2008, such price further declined.

DRAM chip prices may rise in the near term after Elpida filed for bankruptcy protection, Taiwanese memory chip vendors said. The remaining players in the DRAM market will benefit from reduced supply with a boost in pricing and revenue in H2 2012, according to the IHS iSuppli Memory & Storage Service. IHS conservatively estimates that 2012 DRAM revenue will exceed $30 billion, compared to the previous forecast of $24 billion.???M.C.

Solid State Technology, Volume 55, Issue 3, April 2012

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