Elpida IPO raises $967m

Memory maker announces first half-yearly profit, too

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Japanese memory maker Elpida IPO'd on the Tokyo stock exchange this morning, floating 32.6 per cent of the company.

The company also posted its first ever half-yearly profit on surging sales.

The 29.15m shares were launched at ¥3500 ($33) - just above the anticipated ¥3400 ($32) - and quickly rose to ¥3640 ($35). The flotation raised Elpida ¥102bn ($967m)

Elpida announced its intention to IPO last October, though it had been on the cards for some time. In June this year, company president Yukio Sakamoto said Elpida would consider a public offering to part-fund its fab expansion plan. The company hopes to grow its Hiroshima plant into the world's largest 300mm DRAM fab, at a cost of ¥500bn ($4.74bn) between now and 2007.

Elpida has been at the forefront of DDR 2 SDRAM production, having secured investment on the basis of its work from the likes of Intel and Kingston Technology. It's banking on growing demand for DDR 2 going forward.

World demand for DRAM is slowing, but Elpida's fab expansion plan should put it in a good position to capitalise upon growing demand if the market picks up again in 18-24 months' time, as many analysts forecast.

Indeed, the company today re-iterated its forecast that its current fiscal year, which ends on 31 March 2005, will see net income of around ¥21.6bn ($204.7m), up from the ¥26.9bn ($254.9m) loss it posted for the year to 31 March 2004.

Elpida is some way to achieving that target: today posted net income of ¥6.5bn ($61.6m) for the six months to 30 September 2004, up from a ¥17.6bn ($166.8m) loss in the year-ago half. Sales for the period reached ¥100.2bn ($949.4m), up from ¥41.4bn ($392.3m) a year ago. ®

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