* TPG, China's Hony to make joint bid - source
* SK hynix, Micron, Toshiba also interested - sources
* Elpida slid into bankruptcy in late-Feb
* Was ranked 3rd in DRAM chips, with 12 pct global mkt share
By Junko Fujita
TOKYO, April 6 Private equity firms TPG Capital
LP and China's Hony Capital are to bid jointly for
Elpida Memory, a source familiar with the matter said on Friday,
joining an increasingly international battle for the bankrupt
The two firms will take part in a second round of bidding
for Elpida, due to close on April 27, said the person, who asked
not to be identified because the information is not public.
Elpida is the world's No.3 maker of dynamic random access
memory (DRAM) chips, trailing Samsung Electronics
and SK hynix with a market share of around 12
percent. Suitors are likely to be interested in the chips it
manufactures for smartphones and tablets.
With Chinese, U.S. and South Korean firms in the bidding
process, it looks increasingly likely there will be a foreign
rescue within Japan's once-mighty technology sector.
South Korea's SK hynix has confirmed it is bidding, while
sources have told Reuters that U.S. firm Micron Technology
is also in the race. Japan's Toshiba Corp has
approached SK hynix about a joint bid after its solo offer was
reportedly below Micron's bid of at least 150 billion yen ($1.82
billion), other sources have said.
Elpida, formed over a decade ago via a merger of several big
Japanese chipmakers' struggling DRAM operations, filed for
creditor protection in late-February, with $5.6 billion in debt
- the biggest bankruptcy of a Japanese manufacturer.
The company had been struggling with weak chip prices and as
consumers increasingly bypass PCs for products like Apple Inc's
iPad, which uses mainly flash memory. It was also
saddled with heavy capital spending, while a strong yen
undercut its global competitiveness.
According to DRAMeXchange, an industry tracker, DRAM
contract prices fell 58 percent last year, while spot prices
decreased 70 percent.
TPG, which manages $49 billion in global private equity
funds, has previously invested in chip-related businesses,
including Freescale Semiconductor, MEMC Electronic
Materials and Micron's Aptina Imaging Corp.
TPG opened an office in Japan in 2006 and has been linked
with distressed Japanese companies.
Late last year, the buyout firm failed in a bid for consumer
lender Takefuji, and in January this year, a person familiar
with the fund's thinking said TPG was willing to invest about $1
billion in Olympus Corp in a joint deal with one of the
corporate suitors of the scandal-hit maker of cameras and
Hony Capital is a China-focused middle-market private equity
firm with $6.8 billion in assets under management. Hony is
sponsored by Legend Holdings, as is Lenovo Group, and
has invested before in Japan - in property investment firm Tokai
Kanko, according to its website.
A decision on the bidding for Elpida is expected as early as