Elpida develops new DRAM for smart phones, shares jump

TOKYO (Reuters) – Elpida Memory Inc said on Thursday it has developed a 4-gigabit DRAM chip for smart phones, joining bigger rival Samsung Electronics as the only producers of the large capacity power-saving memory chip.

The news pushed Elpida’s shares up 5.5 percent.

Elpida, the world’s No.3 maker of DRAM chips, will start production of the new chip in June at a plant in Hiroshima and aims to generate 100 billion yen ($1.2 billion) of sales in the 2012/13 business year, Elpida spokesman Hideki Saito said.

That is equal to about one-fifth of Elpida’s expected annual sales for the financial year ended last month, according to analyst estimates.

“This is a growing market and the chip will enjoy healthy demand,” said Yuichi Ishida, a senior analyst at Mizuho Investors Securities. “The production of 4-gigabit DRAM chip will certainly make a positive contribution to its earnings.”

Saito said Elpida would start supplying the chip to its main clients as early as this summer, and that it planned to begin production in Taiwan as well to diversify its geographical risk.

Japan’s catastrophic March 11 earthquake and tsunami, which triggered a nuclear safety crisis and rolling power blackouts, have interrupted production at many factories in Japan, including several key chip plants.

The Nikkei business daily, which first reported Elpida’s plans to produce the 4-gigabit DRAM, said buyers of the chip would include Apple.

(Reporting by Junko Fujita; Editing by Edmund Klamann and Nathan Layne)

Elpida develops new DRAM for smart phones, shares jump