Elpida Memory

The Elpida company, the only producer in Japan specializing in production of OZU chips (DRAM) used in mobile phones and computers on February 27, 2012 announced existence of a debt in ¥448 billion ($5.5 billion). At the same time the company submitted the application for bankruptcy to district court of Tokyo. For Japan this event - the largest bankruptcy in the field of production, the analytical consulting company Teikoku Databank stated.

Elpida was created in 1999 by the companies on production of NEC Corp and Hitachi Ltd electronics in the form of joint venture. From the moment of the presence in the market the company tried to reduce a gap with the main rival, Samsung Electronics company.

According to the statement of Elpida in which more than 3 thousand people work, business the blow in 2007 when the prices of modules of a dynamic memory with random access (DRAM) began to fall was struck, and world recession worsened the state of affairs: the unstable behavior of national currency and fierce competition affected the market.

The floods in Thailand which happened in 2011 reduced demand for DRAM, having done much harm thereby further activity of the company. World production of hard drives suffered as a result of this flood as Thailand is the main territorial base for productions of hard drives. "We came to a conclusion that if we independently continue business, then in the nearest future we will face the shortage of liquidity", says the company.

In 2009 Elpida received the emergency help of the government in the amount of ¥30 billion ($375 million) at the expense of national bank of Development Bank of Japan. Other Japanese producers of electronics left business on production of DRAM earlier.

Investors are disturbed by the events with Elpida. "Though it not necessarily means disappearance of Elpida, but there is a probability of fast lag in this business if in due time not to make in it large investments which will be very complicated during receivership by the company", - the analyst Kim Young-chan from Shinhan Investment & Securities told.

The mood of investors also worsened after the minister of trade of Japan Yukio Edano refused even hints of rather possible help of the government in rescue of the company. "Now I can only tell that I will be attentively and with interest to watch providing and accomplishment of legislative procedures within the law on assistance in improvement of the enterprises", - the minister emphasized.