SK Hynix walks away from bid to buy Japan’s Elpida Memory

SK Hynix, the world’s second- biggest chipmaker, dropped its bid for Elpida Memory, worsening the Japanese company’s chances of finding another suitor as it tries to restructure after filing for bankruptcy.

SK Hynix, the only company that had publicly expressed interest in buying Tokyo-based Elpida, decided not to participate in the second round of bidding, the Icheon, South Korea-based company said in a regulatory filing in Seoul today after a board meeting. It didn’t elaborate.

The move makes it harder to revive Elpida as devices such as Apple’s iPad hurt demand for dynamic random-access memory, or DRAM, chips. After semiconductor prices plunged, Japan’s largest maker of DRAM chips filed for bankruptcy in February with liabilities of 448 billion yen ($5.6 billion) after losing money for five quarters.

“There’s nothing Hynix can gain from buying Elpida,” Kim Young Chan, an analyst at Shinhan Investment, said by phone. “The sale process will very likely drag on for a long time. The way things stand now, Elpida may even go out of business in a year.”

Elpida’s buyer would gain its 12 percent share of the global market for DRAM chips, the most widely used in personal computers, to help compete against industry leader Samsung Electronics. Elpida also supplies Apple with chips used in the iPhone.

Bloomberg