Date: 04/03/2021

Elpida filed for bankruptcy protection

With US$5.53 billion loss, Elpida filed for bankruptcy protection at Tokyo District Court . Elpida could not turn around its worsening contract price market's client structure, and it was forced to catch-up in terms of its product lines with other first-tier DRAM makers; as a result, Elpida faced financial difficulties during this wave of DRAM industry downturn, according to TrendForce.

More analysis by TrendForce on Elpida: In terms of Elpida's technological capacity, the company has transitioned into 30nm as its main manufacturing process starting 2012, and its 25nm development was nearing completion, making it almost on par with other first-tier DRAM makers. It has never exhibited any signs of falling behind its industry peers. In terms of its strategic plan for its new product line, Elpida also put significant effort the 4Gb DDR3's launch schedule, LPDDR2 and the future mainstream packaging 3D-IC). These efforts placed the company in a leading position among first-tier industry peers. The only missing link was its lack of a NAND Flash production line. As such, despite being on par with other first-tier competitors in the mobile DRAM production technology, it was not able to push forth the Multi-Chip Packaging market share nor could it be involved in other products that are in oligopoly. As a result, it could only continue to depend on PC DRAM, which is easily affected by the economic trends and not able to avoid its impacts. According TrendForce research, in terms of PC DRAM, Elpida held 12% market share in its 4Q11 revenue, which was a mere 0.1% lower than Micron, placing it as the top four global PC DRAM maker. Its market share was greater than the total market share of all Taiwanese memory manufacturers. As for mobile DRAM's revenue in the same period, its market share reached 17%, ranked number three globally. Elpida's technological capabilities and market competitiveness are both relatively superior to the bankrupt Qimonda. If Elpida exits the market despite its restructuring efforts, the repercussions to the DRAM industry are bound to be substantial.

If Elpida exits the market, there is no doubt that the DRAM spot and contract prices will be affected. Moreover, Elpida has already established itself as a major mobile DRAM suppler for smart phones and tablets; should it exits the market, only Samsung and Hynix will remain in the mobile DRAM market, resulting an on oligopoly market. The continuous expansion of Korean makers, with Samsung taking up over 50% of the market share, is a potential concern for PC OEM and hand-held devices makers' supply chain management. In the long run, as per TrendForce's earlier forecast, DRAM industry's shift towards oligopoly is inevitable, and Elpida's exit will only expedite the industry's transformation.