(AFP) – Feb 2, 2011
TOKYO — Japanese semiconductor maker Elpida Memory said Wednesday it plunged into a massive loss in the three months to December on a sharp fall in chip prices amid faltering demand for personal computers.
Elpida is the world's third-largest maker of dynamic random access memory (DRAM) chips used in mobile phones and other personal electronics, and follows South Korean rivals Samsung and Hynix.
Sluggish computer demand worldwide combined with oversupply has depressed DRAM sales, hurting Elpida's earnings, said chief financial officer Yasuo Shirai.
Elpida also blamed the strength of the Japanese yen against other currencies in mitigating cost-cutting measures for a net loss of 29.6 billion yen ($363 million), compared with a 21.1 billion yen profit the previous year.
"A fall in DRAM prices, the appreciation of the yen, and inventory valuation losses" resulted in a 26.9 billion yen operating loss, Shirai said.
Sales plunged 35.7 percent to 97.1 billion yen.
Japan's only DRAM maker expressed hopes that solid demand for smart phones and tablet computers, such as Apple's iPhones and iPads, will help lift its future earnings.
The company earlier announced a plan to have Taiwan's Powerchip Technology produce PC-use DRAM chips exclusively for the Japanese firm, enabling it to shift investment into making premium chips for advanced mobile handsets.
The company customarily does not release forecasts due to the highly volatile nature of the DRAM market.
Elpida shares closed 0.24 percent higher in Tokyo trade ahead of the earnings announcement Wednesday.
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