"However, it has not reached an agreement as of now, and therefore, material uncertainty about its assumed going concern is found," the English language statement said.

The company on Tuesday corrected the earnings report for nine months to December by adding the warning, without changing financial data.

Elpida closed Wednesday trade at 320 yen, down 14.43 percent, but having made up up some of its losses, which at one point saw the shares down 21.39 percent to the limit low of 294 yen.

For the three months to December, Elpida posted a net loss of 42.15 billion yen ($537 million) as a result of weak chip prices and the yen's strength.

Earlier this month, the company said it had been in talks with Japan's industry ministry, its main creditors and others about "future support measures" and expected it would "ultimately reach an agreement".

Elpida is in a race against time as it seeks ways to refinance its hefty debts, which outweighed its cash balance at the end of December, before quickly approaching repayment deadlines.

The indebted company is facing a March 22 deadline to redeem 15.0 billion yen in corporate bonds and again in April for 76.7 billion yen in loans from commercial banks and the state-linked Development Bank of Japan.

Reports have suggested that Elpida was also in final talks to form a three-way business tie-up with Micron Technology of the United States and Taiwan's Nanya Technology.

But Micron Chief Executive Steve Appleton died in a plane crash earlier this month, while Nanya vice president Pei-lin Pai has denied to Dow Jones Newswires that the company was involved in such talks.

"Elpida's strategic importance stirs protectionists, while free marketers would rather see it cut loose," said David Rubenstein, Religare Global Asset Management's senior technology analyst.

"There is also the scenario of a takeover, but I don't see too many viable Japanese candidates out there with the deep pockets to be able to take the company on. Clearly Elpida is in a quandary."

Earlier this month, reports said Japanese electronics firms Panasonic, Fujitsu and Renesas were to spin off their system chip design and development divisions to create a new company as they seek economies of scale to compete with their US and South Korean rivals.