Monday, February 16, 2009

Japanese DRAM maker Elpida posts heavy loss

Elpida Memory, Japan's biggest DRAM maker, continued the march of bad news for the memory chip sector by announcing on Friday its biggest loss so far amid the downturn.

The company's net loss widened to ¥72.3 billion (US$804 million) in the final three months of last year, from a loss of ¥12.1 billion during the same time a year earlier. Elpida's sales fell to ¥61.8 billion, the company said in a statement.

Elpida blamed a sharp, 50% quarter-on-quarter drop in the price of mainstream DRAM as the main culprit for its loss, but it also said slower demand for high-end DRAM and a stronger Japanese currency also hurt its earnings.

Makers of DRAM, memory chips that retain data in PCs and other gadgets, have turned in hefty losses in their most recent reports. The losses highlight their problems, from a chip glut that sent DRAM prices spiraling downward a year and a half ago to the recent economic downturn, which has made it harder to secure needed loans to keep their chip factories running.

South Korea's Hynix Semiconductor on Thursday reported that its net loss increased to 1.33 trillion Korean won (US$964.4 million) in the fourth quarter last year, from a net loss of 462 billion during the same quarter a year earlier. The company's sales fell to 1.51 trillion won, it said in a statement.

Last month, German DRAM maker Qimonda filed for bankruptcy protection, and analysts fear more memory chip makers may face a similar decision.

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