Elpida files for bankruptcy protection as debts of $5.5 billion are revealed

DRAM Maker Elpida has petitioned for a corporate reorganization (the equivalent of Chapter 11 or Administration) as the company has revealed it is close to collapse. President Yukio Sakamoto is expected to resign as the scapegoat for the calamity as it files for protection at the Tokyo District Court. The company, founded in 1999 as NEC Hitachi Memory Inc. has produced DRAM Products since 2000. It founded three wholly-owned subsidiaries: Tera Probe, which conducted wafer probe testing, Akita Elpida Memory Inc. which handled the back-end processes of DRAM production and Rexchip Electronics Corp, which handled the front-end.

After a blockbuster period of invention, a fall in prices and the global recession in 2006 forced the company to enter restructuring with a 30 billion Yen ($372.54 million) Government-backed loan. That swathe of cash was used to pump more money into investment and R&D, but the combination of strong Yen and the Thailand flooding has once again forced the company to come clean about its finances. It revealed today that it had debts of 448,033 million Yen, or $5.5 billion and without the protection of the court wouldn't last too much longer. Times of Japan points to the strength of Samsung's memory offerings as being a big contributor to Elpida's collapse, with president Sakamoto saying that DRAM is now as cheap as a "rice ball."