Japan’s only DRAM chip maker Elpida files for bankruptcy

Reeling under 448 billion yen ($5.55 billion) debt, Japan's only DRAM chip maker Elpida Memory today filed for bankruptcy protection, as the world's third-largest DRAM memory chip maker got bogged down with falling prices and increased competition from its Taiwanese and South Korean rivals.

In what has become the biggest bankruptcy filing by a Japanese manufacturer, the maker of dynamic random access memory, or DRAM, chips will be delisted from the Tokyo Stock Exchange on 28 March.

Elpida  had posted losses in each of the past five quarters, and had amassed liabilities $5.5 billion, according to a filing with Japan's finance ministry.

Formed through the 1999 merger of the DRAM operations of NEC Corp and Hitachi Ltd, Tokyo-based Elpida was listed on the first section of the Tokyo Stock Exchange in 2004, a year after acquiring the DRAM unit of Mitsubishi Electric Corp.

Anticipating a huge future global demand for DRAM memory chips, Elpida poured millions into plants, equipments and expanding production capacity, from 2006 through 2007.

Prices of DRAM started falling in 2007 but the decline accelerated in 2008 due to the global economic downturn that begun in 2008, which made the Japanese government bail out the company in 2009 with ¥30 billion ($375 million) in emergency loans through its financial aid program that was launched in the same year.