Toshiba mulling investment in select segments of bankrupt Elpida: exec

by Naoko Fujimura and Takashi Amano

Bloomberg

A senior Toshiba Corp. executive said the company may invest in chip-maker Elpida Memory Inc., which filed for bankruptcy protection in February.

Toshiba may make a decision as early as Friday about a nonbinding bid to invest in Elpida on its own or as part of a group, according to the executive, who declined to be identified because the discussions are private.

Toshiba isn’t interested in all of the firm’s assets, the executive said, adding Elpida plans to choose a corporate sponsor for its revival plan in May.

Toshiba spokeswoman Kaori Hiraki and a spokesman for Elpida both declined comment.

Elpida, which makes dynamic random access memory (DRAM) chips, filed for bankruptcy Feb. 27 with liabilities of ¥448 billion. Plunging prices and the strong yen exacerbated Elpida’s troubles after it received financial support from the government and other lenders in 2009. On Wednesday, the firm was delisted from the Tokyo Stock Exchange.

Toshiba announced its withdrawal from the DRAM business in 2001 to focus more on making NAND flash memory chips.

U.S.-based Micron Technology Inc. reportedly has been in talks with Elpida since the end of last year and is considered a leading candidate to sponsor its recovery.

Calls to Micron Technology spokesman Dan Francisco weren’t immediately returned.

Micron’s president, Mark Adams, declined in a March 22 interview to comment on whether the company might invest in Elpida. The U.S. chipmaker will continue to look at developments in the industry to see if there are investment opportunities “that make sense for shareholders,” Adams said at the time.

Elpida gained approval March 23 for President Yukio Sakamoto to lead the company’s revival plan after filing for Japan’s biggest bankruptcy in two years. The company plans to submit a restructuring plan by Aug. 21.

DRAM prices plunged to a record low last year after PC shipments missed analyst forecasts. The price of the benchmark DDR3 2-gigabit DRAM declined to a record 71 cents in November, compared with $4.85 on Sept. 1, 2010, according to DRAMeXchange, Asia’s biggest spot market for the chips.

Elpida was formed in 1999, when NEC Corp. and Hitachi Ltd. merged their memory businesses.