Bloomberg News

Elpida Memory Said to Plan Bankruptcy Filing

February 27, 2012

Elpida Memory Inc. (6665), the Japanese chipmaker facing an April deadline to repay debts, will file for bankruptcy protection as soon as today, according to a person with direct knowledge of the matter.

The company will hold a press conference at 6:30 p.m. in Tokyo, said the person, who requested anonymity before an official announcement. The Nikkei reported earlier that the company will file for bankruptcy protection with 480 billion yen ($5.9 billion) in liabilities.

The maker of dynamic random access memory, or DRAM, chips used in computers said earlier this month it sees “uncertainty” over remaining in business because it didn’t have the necessary financing. Elpida hadn’t been able to reach a deal with the trade ministry, the Development Bank of Japan and its main lenders over financing for 92 billion yen in bonds and loans due by April, the Tokyo-based company said Feb. 14.

Calls made to the office and mobile phones of the company’s public relations department weren’t answered.

Elpida rose 0.6 percent to 334 yen in Tokyo trading. The shares have declined 6.7 percent this year after slumping 62 percent last year.

Elpida’s trouble indicates the difficulty Japanese companies have in competing with South Korea’s Samsung Electronics Co., which had 7.34 trillion won ($6.5 billion) in operating profit from selling chips last year. Chip prices had become as cheap as a “rice ball,” Elpida Chief Executive Officer Yukio Sakamoto said last year.

Samsung boosted its profits by producing specialty chips for smartphones, tablet computers and servers.

To contact the reporter on this story: Mariko Yasu in Tokyo at myasu@bloomberg.net

To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net


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