Elpida rescued by Japanese government

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The Japanese government has injected $312 million (30 billion yen) into ailing DRAM company Elpida.

The cash will come from state owned the Development Bank of Japan but Elpida needs much more cash to be viable, so it will get additional funding in the form of loans from other Japanese financial institutions. The Japanese government will acquire shares in Elpida. The DRAM company will have to produce a recovery plan and will have close government supervision every quarter.

Elpida is Japan’s only DRAM company and is the third biggest producer of this type of memory in the world.

The company needs the cash in order to improve its fabrication capabilities.

The DRAM industry was already struggling before the worldwide recession kicked in, and dogged by oversupply and prices that barely covered the costs of production.

The Taiwanese government has already stepped in to support its own stable of DRAM companies.

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