Published : 2012-02-27 21:05
Updated : 2012-02-27 21:05
Japanese computer chipmaker Elpida Memory Inc. filed for bankruptcy Monday after amassing debts from nose-diving prices, longtime competition from Samsung and the flooding in Thailand last year that stagnated demand.
Elpida, the only maker in Japan to specialize in chips called DRAM, used in mobile phones and computers, reported debt of 448 billion yen ($5.5 billion) in filing for bankruptcy at Tokyo District Court on Monday.
That was the largest ever for a bankruptcy in Japan in the manufacturing field, according to Teikoku Databank, which compiles such information.
Elpida, set up in 1999 as a joint venture between Japanese electronics companies NEC Corp. and Hitachi Ltd., has been struggling for years to close the gap with rival Samsung Electronics Co. of Korea.
The Tokyo-based company, which employs more than 3,000 people, said its business was hit when DRAM prices declined from about 2007, and got worse with the global downturn.
The surging yen also came as a blow as well as intense competition, it said.
Elpida said the flooding in Thailand last year battered DRAM demand, furthering hurting its operations.
"Based on the background mentioned above, we have concluded that, if we continue the business by ourselves, we will face cash shortage soon," it said.
In 2009, Elpida got government emergency aid, totaling 30 billion yen ($375 million) in investments through the government-owned Development Bank of Japan. Other Japanese electronics makers have pulled out of the DRAM business. (AP)