Hitachi Exits Elpida as Chipmaker’s Shares Plunge After Bankruptcy Filing

Hitachi (6501) Ltd., Japan’s second-largest manufacturer, sold its entire 4.7 percent stake in Elpida Memory Inc. whose stock will be delisted in less than a month after filing for bankruptcy.

Hitachi sold all 12.8 million shares of Tokyo-based Elpida by yesterday, spokesman Yuichi Izumisawa said by phone today, confirming an earlier Nikkei report. Hitachi, which was the largest shareholder in the chipmaker according to data compiled by Bloomberg, held the stake for its retirement benefits trust, the company said in a regulatory filing.

Elpida, which lost money for five straight quarters, sought protection from creditors at the Tokyo District Court on Feb. 27 with liabilities of 448 billion yen ($5.5 billion). Troubles at the chipmaker, formed through the 1999 merger of Hitachi and NEC Corp. (6701)’s memory businesses, were exacerbated by an 85 percent slump in the price of dynamic random access memory chips and a stronger yen that cut the value of overseas sales. The Tokyo Stock Exchange will delist Elpida on March 28.

Hitachi transferred its Elpida stake to its pension trust in March 2008. Izumisawa declined to provide details such as price at which Elpida shares were sold as the company doesn’t comment on the trading of individual stocks in the trust.

Prices of DRAM (DRAM84), the most common chip in desktop computers, plunged last year after PC shipments missed analyst forecasts and sales of mobile devices such as Apple Inc. (AAPL)’s iPad surged. The price of the benchmark DDR3 2-gigabit DRAM declined to a record low of 71 cents in November, compared with $4.85 on Sept. 1, 2010, amid slowing PC sales, according to Taipei-based DRAMeXchange, Asia’s biggest spot market for the chips.

Samsung, Hynix

Samsung Electronics Co. (005930) controlled 38 percent of the DRAM market by revenue last year, according to data compiled by Bloomberg Industries. Hynix Semiconductor Inc. (000660) held a 25 percent share and Elpida had 18 percent.

Elpida was unchanged at 3 yen at the close of trading in Tokyo after losing 99 percent of its market value since its bankruptcy filing. Hitachi declined 1.9 percent today to 461 yen, while the Nikkei 225 Stock Average fell 0.6 percent.

To contact the reporter on this story: Naoko Fujimura in Tokyo at nfujimura@bloomberg.net

To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net

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