Elpida Memory Inc., Japan's largest maker of computer-memory chips, said it plans to raise prices as much as 50 percent next month after industry-wide production cuts eased the glut that drove chipmakers to record losses.

The left-over inventory at personal-computer and module makers that was skewing the demand-supply balance is finally gone,¡± President Yukio Sakamoto, 61, said in an interview in Tokyo yesterday. Elpida plans to charge customers about $1.50 per gigabit of memory starting next month to bring prices in line with production costs, he said.

Elpida jumped as much as 18 percent in Tokyo trading on mounting speculation that the industry is rebounding from a glut that forced Qimonda AG to seek bankruptcy protection. Computer- memory chipmakers may remove excess supply this quarter and face a shortage in the second half after they slashed capital spending 58 percent last year, according to Barclays Capital.

The production cut among chipmakers has helped reduce the inventory level,said Robert Chuang, who helps manage $700 million at HSBC Asset Management Ltd. in Taipei. However chipmakers also face the challenge of whether computer makers will accept the price increases.¡±

Elpida rose 18 percent to a six-month high of 1,282 yen as of 10:14 a.m. on the Tokyo Stock Exchange after Sakamoto said he plans to raise prices and a report said the company may receive public funding. Shares of Elpida and South Korea¡¯s Hynix Semiconductor Inc. have more than doubled this year. Top memory- chipmaker Samsung Electronics Co. has gained 33 percent in Seoul.

By: DocMemory
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