Toshiba walks away from Elpida bidding

Toshiba has given up on bidding for bankrupt Japanese chip maker Elpida.

This means that only a handful of foreign firms including SK Hynix and Micron Technology are still in the running to buy the company.

Toshiba walked because a joint bid with potential partners, Hynix, did not work out.

Toshiba investors breathed a sigh of relief when the news leaked out. Many thought that the company would be better off focusing on its thriving NAND flash memory rather than chasing after a money black hole like Elpida.

Toshiba pulled out of DRAM chip-making a decade ago by selling its US DRAM facilities to Micron.

Since Toshiba announced that it would would bid for Elpida, its shares had fallen 12 percent which is a sign that few thought it was a good idea.

Toshiba apparently was interested in Elpida’s engineering and marketing expertise but did not actually want its assets. It was working with Hynix on  a joint bid.

Hynix, however, claimed that the talks on a joint bid were not serious, particularly when  one of the negotiators pulled out a Groucho Marx nose and started singing “What ever it is I am against it.” Actually we made that last bit up.

Elpida, trails Samsung Electronics and SK Hynix in DRAMs with a market share around 12 percent, filed for creditor protection in late February with $5.6 billion in debt.

Those buying it are more likely to be interested in the DRAM chips it makes for mobile devices.