Elpida Memory loses $363 million last quarter

Elpida has announced a net loss in the last quarter of $363.1 million, the first loss it has seen in the last five quarters.

Elpida believes this is partly due to poor PC shipments leading to a lack of demand for PC DRAM during the quarter running from October 1 to December 31.

A boost in supply, brought about by migration to advanced manufacturing processes among DRAM makers, caused supply and demand conditions to turn more negative according to Elpida.  That’s why, says Elpida, the market has so sharply declined.

Elpida, which recently announced that it would take over the DRAM operations of Powerchip, is thought to have responded to the loss by revising its PC DRAM production plans, adjusting procurement from foundry partners and manufacturing at its Hiroshima plant.

Supply and demand for mobile DRAMs was tightly balanced during this period due to decent sales of smart phones and tablets, which TechEye understands the Hiroshima plant will be focusing on now.

Elpida has said that in order to lower the risk of excess inventory holdings, it began reducing the number of wafer starts in November.

Elpida’s average selling price in this quarter was down 39 percent year on year, and down 35.7 percent quarter on quarter.

DRAM bit shipment growth in the quarter was 18 percent year on year and 34.8 percent quarter on quarter, which Elpida says caused the quarter’s sales to fall 35.7 percent year on year and 34.8 percent from the previous quarter.

Another reason given by Elpida for the loss was that the speed of unit prices decline was faster than the speed at which process migration could help lower manufacturing costs.

The net income recorded a loss of $363.1 million, as compared to a $259m profit a year ago, due to a fall in operating income and and ordinary income.