Not everything is going as planned for Elpida, which has failed to close deals with the partners it hoped would save them. It is becoming more and more likely that Elpida will have to close it doors and call it final.
Elpida has tried to close deals, or get more loans, to restructure its operation. Bloomberg reports that the company has been denied new loans and the deals it tried to sign has not been closed as hoped. There have been talks about a merge with Nanya, but also this fell apart. Dropping circuit costs, five quarters in the red and a debt of 1.2 billion dollar might mean the end of memory maker.
“Elpida has not made as much progress as initially envisioned in discussions with the relevant parties[…]Therefore, material uncertainty about its assumed going concern is found.” – Elpida
Samsung have created a market with razor-thin margins
Samsung decided to get into circuit manufacturing for serious a few years back and especially the markets for NAND and DRAM, which is used in SSDs and USB memory sticks, and memory modules. With its size and buffer it can boast capacity and lower prices, without making a loss. It also decided to manufacture circuits tailored for smartphones, surfplattor and servers. Just last year Samsung made a profit of 6.5 billion dollar, only from circuit sales.
All manufacturers of DRAM have felt Samsung, and Elpida is hardly alone of being in the red more than a few quarters lately. Smaller companies like Nanya are only around because mother companies like Formosa Plastics Group, has decided to keep it alive.
There is talk about the Japanese government stepping up and saving Elpida, especially now that the market is stabilizing and prices are going up again. The question is if there will be a forced merger with Toshiba or a loan? Closed doors will come in the near future as long as Elpida doesn’t find a solution fast.