Elpida Falls as Goldman Cuts Rating on Outlook for Drop in Chip Prices

Elpida Memory Inc., the world’s third-biggest maker of memory chips, fell the most in a month in Tokyo trading after Goldman Sachs Group Inc. lowered its rating on concern semiconductor prices will fall next year.

Elpida declined 7.8 percent to close at 1,199 yen on the Tokyo Stock Exchange, the biggest drop since June 25. Japan’s benchmark Nikkei 225 Stock Average rose 0.4 percent.

The market for dynamic random access memory chips will peak in the fourth quarter, Ikuo Matsuhashi, a Tokyo-based analyst at Goldman, wrote in a July 30 report. Matsuhashi lowered his rating on Elpida to “neutral” from “buy,” a rating he had maintained since January.

“It will take at least six to nine months before we can tell whether Elpida and its peers can avoid losses,” wrote Matsuhashi.

Matsuhashi lowered his 12-month share price estimate on Elpida, which trails Samsung Electronics Co. and Hynix Semiconductor Inc. in DRAM production, to 1,600 yen from 2,400 yen.

To contact the reporter on this story: Adam Le in Osaka at ale14@bloomberg.net

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