Elpida’s bankruptcy protection causes DRAM prices to rise

Elpida has filed for bankruptcy protection and is currently undergoing what can only be described as a painful restructuring process. As part of the restructuring process Elpida has to ‘dispose’ of one of its foundries, the foundry owned by its subsidiary Rexchip electronics has been removed from the company. This removal is having a significant price impact on DRAM prices as the production capacity of the Rexchip foundry is high. Elpida however still remains competitive and according to sources:

As Elpida has finished development of 25nm technology to make DRAM, it is still technologically competitive with Samsung Electronics and SK-Hynix (renamed from Hynix Semiconductor)

With Rexchip electronics removal from the DRAM market its foundry capacity of 800,000 12-inch wafers is therefore removed, although due to excess DRAM supply it currently only uses 65,000 wafers which is less than 10% of potential capacity.

In related news, DRAM contract prices for March have risen by 5.7% on average, with prices for 4GB DRAM modules increasing to a maximum of US$18.75 and an average of US$18.50, the sources indicated. PC ODM/OEMs are worried about tight supply of DRAM if Elpida really goes broke but are unwilling to accept high quotes due to slow demand for PCs, the sources said.

Source: Digitimes