Shares soared to a two-week high on the back of the news that Hynix had walked away from the auction of the company.
Micron and Hynix were among a handful of investors who showed any interest in Elpida. The troubled company filed for bankruptcy protection in late February with $5.6 billion in debts.
According to Business Week, Hynix Chairman Chey Tae-won told reporters after a board meeting that his company had decided to pull out of the bidding as the deal would not "strategically benefit" the company.
Currently it looks like TPG Capital and China's Hony Capital will place a joint bid for Elpida in the final round of an auction.
A group of Elpida bondholders said last month they may thwart the auction if trustees sell the company at a price which they think is too low.
Elpida makes DRAM and is behind Samsung Electronics and Hynix.
The company's failure was the largest for a Japanese manufacturer ever since World War Two stuffed a few up.