Elpida of Japan Launches TDRs

Taipei, March 1, 2011 (CENS)--On Feb. 25, Elpida Memory Inc. of Japan, which is listed on the Tokyo Stock Exchange, launched listing of 200 million units of Taiwan depository receipts at a unit price of NT$21.3 on the main board of the Taiwan Stock Exchange (TWSE). Each unit represents 0.05 common shares of the Japanese DRAM (dynamic random access memories) maker.

The TDR issuing helps Elpida raise fresh funds of NT$4.26 billion, which will be used to boost the firm's competitiveness by expanding production volume of high-margin products. Part of the proceeds from the TDR issue will be used to support the research and development work of its subsidiary—Rexchip Electronics Corp., a joint venture between Elpida and Taiwan-based PowerChip Semiconductor Corp. On the first trading day, the Elpida TDR closed at NT$21.7, up a mere 2.34% from the launch price, with heavy trading volume of 49 million units.

KGI Securities, underwriter of the Elpida TDRs, noted Elpida is the first international heavyweight firm to issue TDRs and it has pushed Taiwan into the international capital market. The securities firm said many domestic stock players are likely to buy Elpida TDRs to invest in the internationally renowned high-tech firm.

Elpida president and chief executive Yukio Sakamoto said his company will cooperate with Taiwan's partners to tap the lucrative China market. But he didn't release the names of cooperative partners and the actual time for entering the China market.

By cooperating with PowerChip to set up Rexchip, Elpida has shifted to mobile DRAM manufacturing from standard DRAMs which have suffered price collapse because of the price competition from by South Korean rivals.

An industry insider believed Elpida will be able to grasp the robust business opportunities from mobile DRAMs in the wake of the robust sales of tablet computers and smartphones using mobile DRAMs.