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S&P: Elpida may be affected
Standard & Poor's said it that the credit quality of Elpida Memory Inc. (BB-/stable) may be affected by any further losses sustained by the company, as well as its increased exposure to financial and operational risk factors associated with the company's planned joint venture with China's Suzhou Venture Group Co. Ltd.
On Aug. 7, Elpida announced that it had made a net operating loss of ¥15.6 billion in the first quarter of fiscal 2008, the agency said, adding that this represented the company's third consecutive quarterly loss.
Although Elpida's slower-than-expected earnings recovery does not immediately warrant a rating change, S&P said it believes that the operational and financial risks assumed by Elpida are likely to increase if the slowdown in the DRAM market worsens at the same time as the company expands investments aimed at boosting production.
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