Taking ¥30bn of state preferred shares under the Industrial Revitalisation Act (2009)

What the size of ¥30 billion decided

“The worst mistake was making the DBJ our lead bank for ¥30 billion. Without the DBJ, some commercial bank would have stepped up.” Eighteen months after the failure, Sakamoto Yukio named the scale of the rescue itself as the cause of it. His reading was that with borrowings on the ¥100 billion scale, as at Sharp or Renesas, the banks could not have let the company go. ¥30 billion was enough to defer the crisis and not enough to make a bank a party to it — and by taking public money, Elpida arguably closed off the space in which a private lead bank might have appeared.

Even so, one cannot say a larger cheque would have saved it. By 2009 DRAM had become an industry in which everyone except Samsung survived on their government’s or their banks’ support. Thicken the aid and you simply stay longer in that war of attrition. In fact the Taiwanese alliance written into the certification never happened, so the premise of the support collapsed in its first year. Once the state decided to keep DRAM in Japan, it had not decided how to keep it — and that is where the limit of this decision lies.