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Elpida Wants Bankruptcy Protection, Cites DRAM Demand

By - Source: BBC | B 9 comments

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 28th.

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.

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  • -1 Hide
    madooo12 , February 29, 2012 9:03 AM
    really sorry, I wish the Japaneese governemnt helps them

    It's really sad they may go bankcrupt
  • 1 Hide
    thehelix , February 29, 2012 9:46 AM
    I find it ironic since Elpida means "hope" in greek
  • 1 Hide
    alidan , February 29, 2012 10:10 AM
    a prime example of
    more competition =/= good
  • 0 Hide
    eddieroolz , February 29, 2012 2:17 PM
    I really wish Elpida would survive. I don't want to use low quality Hynix or Samsung memory in my devices.
  • 1 Hide
    jprahman , February 29, 2012 2:19 PM
    No, just a prime example of supply > demand.
  • 0 Hide
    ltdementhial , February 29, 2012 6:36 PM
    eddieroolzI really wish Elpida would survive. I don't want to use low quality Hynix or Samsung memory in my devices.


    Really Hynix & samsung have lower quality than elpida? i tought that was a myth...i have used the 3 and i only find samsung a bit disturbing since i have repaired hundreds of thousands of laptops with faultys samsung ram's modules from many companies like Markvision,V-Data,innix,shikatronics,kingmax,Vickin, etc etc... xD
  • 0 Hide
    erunion , February 29, 2012 8:48 PM
    alidana prime example of more competition =/= good


    No, not really.

    Too many global resources are devoted to dram production. Scaling back dram production (which may include the failure of some firms) frees up resources for other products.

    Stasis is the opposite of progress.
  • 0 Hide
    nebun , February 29, 2012 11:00 PM
    this is the result of poor marketing....why did they build so much stock?....they should build as orders come in....sure it will take longer to complete the orders, but it ensures that the company will not overproduce...does this make sense
  • 1 Hide
    killerb255 , March 1, 2012 2:46 PM
    jprahmanNo, just a prime example of supply > demand.


    This.

    I mean...how many average Joes need more than 8 GB of RAM? Some can argue that an average Joe doesn't need more than 4 GB of RAM, but of course there are applications that can use a lot of RAM (whether legitimately or illegitimately (bloat)), such as Firefox on a bad day.

    Of course those of us that can find a use for all that RAM are loving it right now! Virtual machines galore! :)