Elpida Memory, the world's third largest DRAM maker, may be seeking another round of government funding to finance its business.
The struggling chip company is reportedly not able to repay a government loan in the amount of $386 million, which it received in June 2009, following the crash of investment bank Lehman Brothers in late 2008. Elpida received a total of more than $1 billion in supporting financing.
According to The Asahi Shimbun, Elpida is likely to be seeking a second bailout. The company's current cash resources barely cover the original loan amounts and a questionable world economy as well as deteriorating DRAM pricing may keep Elpida in the red and drain its cash reserves. There is already speculation that Elpida will be denied another bailout and there are talks that Elpida could be merging with Toshiba. Digitimes wrote that the Japanese government has an interest in keeping Elpida's DRAM technology alive and especially keep it as an asset of the country. As a part of Toshiba, Elpida could be contributing to faster Flash development, Digitimes said.
Samsung, already the world's dominating DRAM maker, would gain even more control of the market, if Elpida closes its doors.