Japanese chipmaker Elpida Memory Inc. filed for bankruptcy
Monday, making it the country’s largest manufacturing bankruptcy.
Elpida is the only manufacturer in Japan that produces DRAM
chips which are used in cell phones and computers. Competition from Samsung,
based in South Korea, and flooding in Thailand caused the company to see a
decline in demand.
Elpida reported a debt of 448 billion Yen ($5.5 billion) in
their bankruptcy filing. The company failed to recover after massive
investments in production between 2006 and 2007. This caused Elpida to have an
oversupply of DRAM chips, which drove down the prices. They were then hit by the
global economic crisis of 2008 and last year’s flooding in Thailand.
Elpida is looking for an outside investor so they can
continue operations. In 2009, the company faced similar troubles and received
emergency loans from the government banks other entities in the amount of 110
billion Yen ($375 million).
DRAM chip prices have been on a steady decline and only four
manufacturers have been able to remain solvent. Samsung hold 56 percent of the
market, while Elpida had only a 15.4 percent share of the market.
An ailing business must sometimes seek out the expertise of a
bankruptcy attorney, who can inform
them of the ways they can reduce or eliminate their debts.
will be able to clarify the different debt relief structures and determine
which one is the most appropriate for the businesses’ needs. A consultation with a bankruptcy attorney can alleviate fears and inform a business how
they can return to financial solvency.