The move is aimed at helping reform the Japanese semiconductor industry, the Nihon Keizai Shimbun said.

Leading Japanese high-tech firms NEC Corp. and Hitachi Ltd. spun off their chip divisions to set up equally-owned Elpida Memory Inc. but it is fighting a tough battle against US and South Korean rivals in the dynamic random access memory (DRAM) sector.

With the government-backed bank buying into the company, Elpida Memory is expected to become able to raise funds more easily, the daily said without citing sources.

Elpida earlier decided to raise 100 billion yen from its parent firms, US chipmaking giant Intel Corp. and others but now it is likely to raise a total of more than 150 billion yen by the end of November, the paper said.

The funds will be used mainly to raise the capacity of its domestic factories to boost its share of the global memory chip market.

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