Elpida Memory has gone bankrupt as prices for its main product plunged to a record low.
According a filing with Japan's finance ministry, the company owes $5.5 billion and checking down the back of the sofa is not going to cut it.
Elpida makes DRAM and it was struggling to meet its debt payments for April. It said that it saw "uncertainty" over remaining in business because it might not have the necessary financing. The outfit had been hoping to reach a deal with the trade ministry, the Development Bank of Japan and its main lenders over financing for 92 billion yen in bonds and loans due by April. It looks like they finally said no.
It is likely that in the short term bankruptcy for Elpida would help its beleagued Taiwanese rivals. It could lead to a short term supply shortage as Elpida restructures or is taken over.
However, Elpida going bankrupt might cause bigger problems for the stressed Japanese economy. It is the country's biggest crash since Japan Airlines went under in January 2010 with 2.32 trillion yen in liabilities.
Elpida has 5,898 people and these are not the sorts of numbers that the government would want jobless. However, so far, Elpida has been a bottomless pit for government money and it seems that everyone thinks it is time to have it put down.