Elpida Wants Bankruptcy Protection, Cites DRAM Demand

Elpida might not last much longer in its current form.

Elpida has a bleak future. Shares of the company plunged 98 percent (from 250 to 5 yen) after the memory firm filed for bankruptcy protection. According to the Toyko Stock Exchange, Elipda will be delisted on March 28^th.

On Monday, Elpida sought bankruptcy protection because it couldn't repay debts totaling 448 billion yen ($5.6 billion). It's not clear if the Japanese government will step in to help save the firm, as it has done with other troubled technology companies. At the moment, private bailout seems unlikely because Elpida has been exploring the possibility of an acquisition or partner for a while without any success.

Right now there's no incentive for anyone to save Elipda. Unlike NAND, the DRAM business is really slowing down. We've seen prices drop 40 percent over the past year, which means profit margins are razor thin. Combine falling prices with lower demand and you're looking at a bad situation.

It's a pity that this company is likely to go bust as it had a reputation for producing quality parts in the past. There was even a case six months back where some DRAM vendors were selling fake Elipda memory by using relabeled Samsung parts. Elpida likely won't be the last DRAM company to go belly up, but this is just another case where a mature market is going to whittle down the number of competitors.