TOKYO (Reuters) - Elpida Memory Inc 6665.T will draw up a rehabilitation plan in a relatively quick six weeks and look for a firm to help it out of bankruptcy, the Nikkei newspaper said on Wednesday, as the Japanese chipmaker's shares lost almost all their value.
The world's third-largest maker of dynamic random access memory (DRAM) chips will struggle to find a firm prepared to finance its rehabilitation, because it filed for bankruptcy without consulting key lenders first, the business daily reported.
Elpida filed for protection from creditors on Monday with 448 billion yen ($5.6 billion) in debt, a record for a Japanese manufacturer, after failing to secure a rescue from other chipmakers.
Shares of Japan's last remaining DRAM maker fell by 97 percent on Wednesday, accounting for over a fifth of volume on the Tokyo Stock Exchange's main board, while shares in Taiwan chipmakers connected to Elpida tumbled.
The rehabilitation plan will include specifics such as the percentage of debt the company will repay. Yukio Sakamoto is to stay on as president if key creditors approve, the newspaper reported.
The six weeks Elpida has given itself is a tight deadline compared with Japan Airlines Corp, which took eight months before submitting its rehabilitation plan after filing for bankruptcy protection in 2010.
The chipmaker had been in talks on a capital and business partnership with Micron Technology Inc (MU.O) since the end of 2011, and the U.S. chipmaker is seen as the top candidate to lead Elpida's rehabilitation, the Nikkei said.
An Elpida spokesman declined to comment.
There have been reports that Japan's government is looking to combine the struggling system chip operations of Renesas Electronics (6723.T), Fujitsu Ltd (6702.T) and Panasonic Corp (6752.T), with production outsourced to GlobalFoundries, a California-based company that could buy Elpida's chip plant in Hiroshima as part of that deal.
Elpida, which accounts for 12 percent of global DRAM output, has been struggling with a slump in chip prices as consumers increasingly bypass PCs for products like Apple Inc's (AAPL.O) iPad, which primarily uses flash memory instead of DRAM.
On Tuesday, Micron announced it would pay $600 million to buy back Intel Corp's (INTC.O) stake in two factories that make flash memory chips.
Elpida is also saddled with heavy capital spending to keep pace with market leaders Samsung Electronics Co (005930.KS) and Hynix Semiconductor Inc (000660.KS), while a strong yen undercut its global competitiveness.
Rexchip Electronics Corp 4932.TWO, a joint venture between Elpida and Taiwan's Powerchip Technology Corp 5346.TWO, tumbled 31 percent, while Powerchip dropped 6.35 percent. ($1 = 80.5150 Japanese yen)
Reporting by James Topham in Tokyo and Chandni Doulatramani in Bangalore; Editing by Paul Tait and Michael Urquhart