January 28, 2014 1:00 pm JST

Elpida stakes comeback on energy-efficient chips for mobile devices

KEN SAKAKIBARA, Nikkei staff writer

TOKYO -- Elpida Memory is setting out on a fresh quest to win back its global DRAM market share. The aim is to do this by producing the best, smallest and most efficient chips for mobile devices in the world.

     Japanese makers of DRAM, or dynamic randomaccess memory, used to dominate the global market, but now trail far behind their foreign rivals, such as Samsung Electronics.

     Elpida, which is now a unit of Micron Technology of the U.S., is the only Japan-based chip maker left that specializes in DRAMs. To stay in the game, it is focusing its strategy on smartphones and other mobile devices.

     Micron CEO Mark Durcan has said the Japanese unit will become involved in Micron's overall technology development.

     Though Elpida is poised to have world-beating chip manufacturing technology, it is not yet clear whether the company will be able to translate this technological advantage into sales in the highly competitive global market.

On the edge

In 2012, Elpida filed for bankruptcy protection under Japan's Corporate Rehabilitation Law. It became a wholly owned subsidiary of the U.S. maker last July. Its name will be changed to Micron Memory Japan effective from February 28.

 

    Micron is a Boise, Idaho-based maker that supplies a wide range of semiconductor chips, including DRAMs and flash memories. It plans to spend up to $3.1 billion on equipment and facilities in the year through August 2014. Durcan has pledged to allocate half of the capital budget to DRAM operations in Japan and Taiwan. This will mark Elpida's first significant capital investment in three years.

     The spending focus in Japan will be on the state-of-the-art DRAM production line at Elpida's Hiroshima plant, which will begin mass-producing DRAM chips with 20 nanometer circuit widths in the latter half of this year. 

     Even Samsung, the world's largest DRAM manufacturer, can only make chips of circuit widths in the lower end of the 20nm range.

     Durcan has said that the plan is to make the Hiroshima plant a DRAM production center that is on the leading edge of chip-making technology.

     Elpida's DRAM plant in Taiwan will also upgrade its chip-making equipment to produce 25nm circuit line widths.

Now the hard part

Elpida was formed more than a decade ago through the merger of the DRAM units of NEC, Hitachi and Mitsubishi Electric. It constantly struggled to raise the huge amounts of capital needed to keep production and development operations ahead of the competitive curve. Meanwhile, South Korean makers continued to spend heavily on equipment.

     Elpida's failure to keep up with rivals in terms of investment eventually doomed the company. Even during its hardest times, however, Elpida continued to develop energy-efficient DRAMs for mobile devices. The company to this day claims it can hold its own against Samsung in the field of mobile-use chips.

     The amount of data processed by mobile devices like smartphones is growing fast, and with functions such as video streaming becoming more common, power consumption by these devices is on the rise.

     A chip maker that can help reduce power consumption will have a market advantage. But having the technological edge is only a part of the fight. Elpida has yet to prove it can also win in the arena of marketing these advantages.