* Aims for MoU with Micron as early as start of Feb -Nikkei
* Micron would take stake in Elpida, no details yet -Nikkei
* Elpida would also seek equity tie with Nanya parent-Nikkei
* Elpida declines comment, shares pull back after recent
By Maki Shiraki and Isabel Reynolds
TOKYO, Jan 26 Japan's Elpida Memory Inc
aims to reach a deal as early as next month for a
capital infusion from Micron Technology, the Nikkei
business daily said, as it confronts a punishing memory chip
market and imminent debt repayments.
The two have yet to hammer out details on an equity tie-up,
in which Elpida will eventually seek to include Taiwanese
chipmaker Nanya Technology Corp's parent, Formosa
Plastics Group, the Nikkei said.
The Nikkei said Elpida presented a broad outline
of a recovery plan centred around a partnership with Micron and
Nanya during a meeting on Wednesday with lenders.
Elpida's lenders have given President Yukio Sakamoto until
next month to come up with a turnaround plan as the company
confronts an uncertain outlook, sources familiar with the
They had originally demanded a plan be presented by January,
although the company's negotiations with potential partners have
hit snags, the sources said.
"Clearly, the issue facing Elpida is that they need to tide
over the near-term refinancing pressures. There will also be an
eventual need to fund R&D and further capital spending," said
Macquarie Securities analyst Damian Thong.
"Elpida has technology, but it doesn't have a lot of
money. Any source of funding that relieves the situation should
be seen as a positive for them as a company."
A source close to the company has said Elpida was determined
to remain independent, with any discussion on equity ties
targeting a non-majority stake while it looks at cooperation on
Elpida said in a statement that it would not comment on
rumours and speculation. Micron also said it would not comment
Elpida's shares slipped nearly 3 percent to 363 yen on
Thursday, breaking a seven-day rally after a series of recent
media reports boosted expectations for a rescue via an equity
That rally helped to lift Elpida's shares from an all-time
low of 297 yen early this month to an intraday peak on Wednesday
of 378 yen, a gain of more than one-fourth.
Elpida, Japan's last remaining player in the market for
dynamic random access memory (DRAM) chips used in personal
computers, faces a debt repayment crunch in late March and early
April, when 92 billion yen ($1.2 billion) in loan repayments and
bond redemptions will come due.
The DRAM market has been hit by slumping prices in a weak
economy and as consumers switch to tablets that use flash memory
instead of DRAM chips.
Elpida, Micron and Taiwanese producers are also struggling
to compete with well-funded South Korean rivals Samsung
Electronics Co and Hynix Semiconductor Inc
, the two largest players in the DRAM sector.
Micron has already begun conducting due diligence and has
selected Goldman Sachs Japan Co as its financial adviser for
these negotiations. Elpida has signed up Mitsubishi UFJ Morgan
Stanley Securities Co, the Nikkei said.
Micron, which also makes NAND flash memory but reported a
worse-than-expected net loss in its latest quarter, has a
10-year agreement with Nanya until 2018 to co-develop new DRAM
chip technology. The two also run contract DRAM maker Inotera
Memory via a joint venture.