Elpida Memory Files for Bankruptcy, Could Spike DRAM Prices

Written by John Ponio    Tuesday, 06 March 2012 14:35

Elpida Memory Logo

Elpida Memory, a major supplier of DRAM and supposed inventor of the 4GB DDR3 SDRAM stick, has filed for bankruptcy. While the future is cloudy for the company, even just a 25% manufacturing decrease could raise the prices up to $1.21/GB by the end of the year, which is up $.16 from the projected $1.05 it would have been if this hadn't happened. Mike Howard, senior principal analyst for DRAM & memory at IHS iSuppli, said, "A meaningful reduction in Elpida’s manufacturing will cause the DRAM market to go into a state of undersupply, causing prices to increase. Shipments likely will decrease because of the Elpida bankruptcy, even though the resulting increase in revenue—driven by higher prices—will cause the market to perform better than expected in 2012. The ultimate fate of Elpida’s manufacturing assets, which remains to be decided, will be the major factor impacting pricing and revenue growth in 2012. But one thing is certain: Elpida’s bankruptcy means the remaining DRAM players can look forward to a much rosier 2012 than they did just one week ago." The company is facing a debt of around $5 billion, it looks like, but if it can manage the debt payments it might be able to stay in business. Currently everything is going as normal for the workers and engineers, but things could change soon. If Elpida goes under, analysts are saying that Hynix and Samsung will see the biggest increase in business because they are currently the largest suppliers of DRAM. You can read more about this here, and read about Elpida Memory's history here