Hitachi sells portion of Elpida Memory

TAIPEI, Taiwan -- Hitachi Ltd. has sold just over 4% of the outstanding stock shares in Elpida Memory Inc., Japan's leading supplier of DRAM (dynamic RAM) computer memory chips, Elpida said today.

The sale means Elpida is no longer considered an affiliate of Hitachi, but the Japanese giant remains the single largest shareholder in Elpida, it said in a statement.

"[Our] business relationship with Hitachi will remain the same, and we do not expect a change in its Elpida share ownership to affect our business performance," Elpida said.

Hitachi sold 4 million Elpida shares, reducing its stake in the company to 19.7% from 23.8%. The company still holds nearly 19 million Elpida shares.

Elpida was formed in 1999 from the merger of the DRAM businesses of NEC Corp. and Hitachi in the face of strong competition from South Korean and Taiwanese memory chip makers. Mitsubishi Electric Corp. sold its DRAM business to the company in 2002.

The share sale should come as no surprise, since Hitachi announced the sale last month. NEC also said last month it would sell 9.6 million Elpida shares, to reduce its stake to 13.9%.

Elpida is Japan's only sizable producer of DRAM chips but it accounts for a relatively small portion of global DRAM output, according to recent figures from IDC. In the first quarter this year, Elpida had a 6.5% share of the market in terms of revenue, ranking fifth among DRAM makers globally, IDC said. Leader Samsung Electronics Co. Ltd. had 31.5%, followed by Micron Technology Inc., Hynix Semiconductor Inc. and Infineon Technologies AG, according to IDC.

Copyright © 2005 IDG Communications, Inc.

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