Hitachi will reduce its stake in Elpida Memory, the computer memory chip maker it helped form, before the end of the year, it said Tuesday.
The company's announcement came shortly after NEC announced it would also sell a significant chunk of its stake in the company. Hitachi will sell 4 million shares to reduce its stake to 19.7 percent while NEC will sell 9.6 million shares to reduce its stake to 13.9 percent.
Shares in Elpida Memory ended trading down 5 percent at YEN 3,150 in Tokyo on Wednesday.
Elpida was formed in 1999 from the merger of the DRAM (dynamic RAM) businesses of NEC and Hitachi in the face of strong competition from South Korean and Taiwanese memory chip makers. Mitsubishi Electric sold its DRAM business to the company in 2002.
Elpida is Japan's only sizable producer of DRAM chips but it accounts for a relatively small portion of global DRAM output, according to recent figures from IDC. In the first quarter this year, Elpida had a 6.5 percent share of the market in terms of revenue, ranking fifth among DRAM makers globally, IDC said. Leader Samsung Electronics had 31.5 percent, followed by Micron Technology, Hynix Semiconductor and Infineon Technologies, said IDC.