Former President of UMC Japan to Lead Elpida

by Anton Shilov
11/04/2002 | 09:17 AM

Elpida Memory, a joint venture between NEC and Hitachi, announced today that, Yukio Sakamoto, former president of UMC Japan, has taken the role as Elpida's president. Kenji Tokuyama resigned the company's president after having successfully completed his three-year term.

Yukio Sakamoto, whose hometown in Gunma Prefecture, had served as president of UMC Japan since 2000, theretofore had served as director and vice president at Texas Instruments Japan. In the light of recent business conditions, both parent companies agreed to select a candidate outside from parent companies.<%BANNER[article]%>

Elpida's new management was deliberately selected from outside either of the parent companies as part of a strategic decision to empower the company to focus on its own DRAM business. This will enable Elpida to respond to customer and market demands in a way that allows the company to flourish as a global DRAM leader, according to the statement. Basically, the current problem of Elpida is a rather slow business model, when two companies, NEC and Hitachi, have to negotiate with each other prior every decision.

Mr. Sakamoto’s plans for the future are quite serious and his main goal is to turn the company into the third-largest DRAM maker in the world, that is about 20% of the market from the current 8 or 9% by the year 2005. Here are the most important activities Yukio Sakamoto is going to perform:

• To negotiate with potential manufacturing partners and maybe to outsource some production. In early 2003 Elpida will be joined by Mitsubishi’s DRAM business and the company also plans to find additional manufacturing partners in Taiwan. According to the rumours, Powerchip Semiconductor Corporation (PSC) can become one of the main OEMs for the Tokyo, Japan-based company.
• To expand manufacturing capabilities of Elpida from current 10 000 wafers per month to 20 000 per month. Frankly speaking, he will first need to utilise the current fab: presently the company makes only 3000 wafers per month, possibly due to a lack of demand on DRAM memory.
• To find foreign investors for the company in order to be able to pay for all the manufacturing expansion and new staff hire and go public in 2004 at latest.
• To make the company profitable by the end of next year, what is rather a tough task because Elpida is said to report $212.3 million loss for the fiscal year ending in March 2003.
• To invest in R&D and possibly diversify the types of products manufactured by Elpida.