June 30, 2009

Elpida aproved for govt. investment

Japan's loss-hit chipmaker Elpida Memory will be eligible for 30 billion yen, or about $312 million, in emergency investment, the government said Tuesday.

The money will come from an aid program set up to help critical companies hit by the global economic downturn, making Elpida the program's first recipient, the Kyodo news agency said.

The company is the world's third-largest and the only Japanese maker of dynamic random access memory chips, which are mostly used in cellular phones and computers. It has suffered losses for the past two years because of declining DRAM prices, the report said.

The report said the government determined Elpida's collapse would have a negative impact on the economy, Industry Minister Toshihiro Nikai told reporters.

''DRAM is widely used by major industries in our country, and securing the stable supply of it will benefit people's lives as well as economic and industrial activity," he said.

Critics of the program say it is the taxpayer who must pick up the losses if a private company fails.

With the government approval, Elpida also will get bank loans and additional investment from its Taiwanese partner, Kyodo said. The total is expected to be about 160 billion yen or $1.67 billion.