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Elpida, Japan’s leading supplier of dynamic random access memory (DRAM), on Friday said that it would raise $200 million by selling shares and convertible bonds to Kingston Technology, the world’s largest independent maker of memory modules.

Elpida will sell $125 million worth of shares and $75 million worth of convertible bonds to Kingston Technology Corp. Group (KTC Group), the DRAM firm indicated. The proceedings from the sale will help Elpida to ensure smooth transitions to new manufacturing processes while ensuring stable supply as well as high production quality. Elpida also claims that its needs to raise funds in order to purchase manufacturing equipment for the purpose of conversion of the company’s Hiroshima plant(s) from 65nm manufacturing process, to 40nm manufacturing process.

By providing leading-edge DRAM, Elpida hopes to strengthen its relations with its partners among memory module manufacturers. At present Kingston Technology is the world’s largest maker of memory modules, besides, it is the largest customer of Elpida and is also a subcontractor of the Elpida’s own-bran module products, and is jointly engaged in the development of next generation memory modules and the enhancement of product quality.

The sale of shares and convertible bonds comes after Taiwan recently scrapped plans to inject approximately $126 million into government-backed memory-chip venture Taiwan Innovation Memory, which would in turn have invested in Elpida, notes Bloomberg news-agency.

Kingston recorded sales of 4.1 billion in fiscal year 2009.

Tags: Kingston, Elpida, DRAM, Business

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