Filing for corporate reorganisation and the sale to Micron Technology (2012)

Who was supposed to provide the extra year

“People say we were made to fail, but if the banks had waited one more year this would have been a hugely profitable company. It is a question of whether the banks could wait or not.” That was Sakamoto Yukio’s summing-up, and on the numbers alone he has a case. In the April–June quarter of 2013, immediately after passing to Micron, the standalone business posted ¥130.0 billion of revenue and ¥39.0 billion of net profit. The mobile-phone market it had bet on simply arrived a year late; the business itself was not dead.

But providing that year was management’s job as much as the banks’. In the year to March 2011 Elpida recorded its highest-ever revenue of ¥514.3 billion and kept ¥2.1 billion of net profit, leaving ¥337.2 billion of debt outstanding. What it failed to accumulate in the two good years determined how long it could wait in the bad one. Add that the Micron merger it had refused for eight years finally came together at the worst possible moment, only to be undone by the chance death of a chief executive, and this decision was taken within a very narrow band of available choices.