Hitachi to sell Elpida stake, exit DRAM biz

Hitachi Ltd. plans to sell its stake in major semiconductor maker Elpida Memory Inc. from business 2008, a move that will see the electronics giant effectively withdraw from the dynamic random access memory chip business, sources said Wednesday.

Hitachi, the largest shareholder of Elpida Memory, with a 9.87 percent stake in terms of voting rights, plans to sell its shares in stages, depending on market conditions, the sources said, adding that Hitachi has already placed all of its Elpida Memory shares in trust.

Elpida Memory, a leading manufacturer of DRAM products, was established in December 1999 through the integration of the DRAM units of Hitachi and NEC Corp. Mitsubishi Electric Corp. later transferred its DRAM unit to Elpida Memory.

The move follows Hitachi's announcement last month that it will sell its stake in its chip-making firm Hitachi Semiconductor Singapore Pte. to another chip maker in Singapore, Chartered Semiconductor Manufacturing Ltd., next Monday.

Hitachi will speed up efforts to concentrate its management resources on areas deemed profitable, including electric power generation facilities, to enhance its business performance, they said.

The Tokyo-based manufacturer said earlier this month that it expects to stay in the red for a second consecutive year through business 2007 due partly to sluggish sales of flat-panel televisions.

Hitachi will continue transactions with Elpida Memory after dissolving its capital tieup with the chip maker, according to the sources.

Hitachi's pullout from the DRAM business reflects a recent trend among Japanese electronics makers to end their money-losing business before losses grow too large.

Toshiba Corp. recently decided to abandon its HD DVD next-generation DVD format, giving way to Sony Corp.'s Blu-ray.