UPDATE 1-Elpida eyes Qimonda's graphics DRAM unit

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TOKYO Aug 4 (Reuters) - Japan's Elpida Memory Inc (6665.T) said on Tuesday that it was in talks about taking over German chipmaker Qimonda's QMNDQ.PK high-end graphics DRAM operations to bolster its product lineup.

Elpida, which is vying with U.S. chipmaker Micron Technology MU.N to be the world's No.3 maker of dynamic random access memory, has been in repeated talks with Qimonda's administrator and creditors about taking over the collapsed chipmaker's graphics operations.

The two could ink the deal as early as this month, although price and other details are still being negotiated and the deal could still fall through, Elpida spokeswoman Kumiko Higuchi said.

Graphics DDR memory -- used in high-speed computers and games -- would not represent a significant boost to sales at Elpida, which is expected to report its seventh straight quarter of losses on Tuesday.

But Elpida's interest in Qimonda's graphics technology has been growing, now that Qimonda is dropping out of the race, leaving South Korea's Samsung Electronics (005930.KS) and Hynix Semiconductor (000660.KS) to split the market, said three sources who asked not to be identified as the deal had not been signed.

Elpida last month secured a $1.7 billion lifeline including an injection of state-backed funds, to help it buy time to catch up to its bigger South Korean rivals in technological processes. (Reporting by Mayumi Negishi in TOKYO and Jens Hack in MUNICH; Editing by Chris Gallagher)