Elpida Memory Inc’s shares fell to the lowest in two months in Tokyo trading after the US vowed to use WTO sessions to press Japan over subsidies to the chipmaker and Credit Suisse Group AG cut the stock’s rating.
Elpida, Japan’s biggest computer memory chipmaker, slumped 8.6 percent to close at ¥1,076 (US$11.95) on the Tokyo Stock Exchange, the lowest level since July 30. The benchmark Nikkei 225 Stock Average lost 1.5 percent.
US Trade Representative Ron Kirk promised in a letter made public on Wednesday to Senator Mike Crapo to use sessions at the WTO over subsidies and a separate meeting of countries with semiconductor production to get more information from Japan and Taiwan about the aid following complaints from US rival Micron Technology Inc.
“The US move is a surprise and is definitely influencing the shares,” said Yuichi Ishida, an analyst at Mizuho Financial Group Inc in Tokyo. “Micron is being left behind as the global computer memory market undergoes change, which is the setting for this development.”
Hiroshi Tsuboi, a spokesman at Tokyo-based Elpida said the company wasn’t able to comment.
“It’s a matter between the Japanese and US governments,” he said.
Credit Suisse lowered its rating on the company to “neutral” from “outperform,” saying the stock price already reflects the prospect of increasing demand for semiconductors.
Elpida’s 12-month share price estimate was cut 27 percent to ¥1,100, Hideyuki Maekawa, a Tokyo-based analyst at the brokerage, said in a report dated Wednesday.
Elpida said in June it might receive ¥160 billion in aid from the Japanese government, its Taiwanese partner and financial institutions after falling semiconductor prices drove the company to a record loss last fiscal year.
Crapo, a Republican, said subsidies to overseas chipmakers are driving down prices for Boise, Idaho-based computer memory maker Micron.
Taiwan Memory Co (台灣創新記憶體公司), a chipmaker set up by the Taiwanese government that has a technology partnership with Elpida, plans to invest ¥20 billion in the Japanese firm by March 31.
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