LONDON – Japan's Elpida Memory Inc. could be the first casualty of the DRAM nuclear winter and Toshiba is being discussed as a potential purchaser, according to a report from DRAMexchange, a market research division of TrendForce Corp. (Taipei, Taiwan).
A note from DRAMexchange said that Elpida has a total debt of about $6.26 billion and that 37.4 billion yen (about $485 million) of that debt is held by the Japanese government and is due to be repaid by the end of April 2012. Currently Elpida has cash of about 110 billion yen (about $1.43 billion), the note said.
The note added that rumors had been rife about Elpida; that it had been seeking a renewed bail-out from the Japanese government but also of Toshiba taking over the DRAM vendor. Elpida has been getting support from DRAM module partners Kingston Technology Company Inc. (Fountain Valley, Calif.) and Powertech Technology Inc. (Taipei, Taiwan), the report said.
DRAMexchange said that the Japanese government is eager to help negotiate a partnership between Toshiba and Elpida in the belief that a converged DRAM and NAND flash memory strategy will better target tablet computers and solid-state disc drives and mimic what the South Korean giants have done. Both Samsung and Hynix make both DRAM and flash memory.
In addition there is the possibility of allying a larger Japanese memory company with Micron Technology Inc., which is also struggling. Such an alliance would help with DRAM and NAND flash manufacture by keeping costs down and help the companies break into the mobile DRAM market, DRAMexchange said.
Elpida and Micron’s combined wafer start capacity would be 328,000 wafer starts per month, surpassing that of number two Korean maker Hynix.
Monthly wafer start capacity at three leading DRAM camps
Toshiba, Nanya nor Micron would buy Elpida with their debt load. It was the same with Quimonda, no one is going to pick up $6 Billion in debt combined with a couple of Billion in retooling costs. Toshiba got out of DRAM and will not get back in unless the gov't gives it a pile of free cash. My guess is they will do what Inotera did, spin off the DRAM Dog to die saddled with all of the debt and keep all of the profitable business and merge. (I just hope they come up with a better name than Qimonda)