TOKYO, JAPAN: Japanese PC chipmaker Elpida Memory Inc plans to begin bulk production of DRAM chips using 40-nanometre technology by year-end, keeping it in the running to compete with bigger rivals Samsung Electronics and Hynix Semiconductor.

Japan's sole maker of dynamic random access memory said on Thursday that it would shift some production at its cutting-edge Hiroshima plant in western Japan, as DRAM prices strengthen after over two years of steep slides.

Elpida has been fighting to stay relevant as bigger rivals invest in new technologies and is reeling from seven straight quarterly losses.

The move sent shares at the loss-making chipmaker up 4.3 percent to 1,159 yen, outperforming a 0.9 percent rise in Tokyo's electrical machinery index .

The company, which is battling with U.S. chipmaker Micron Technology to be the world's No.3 DRAM maker, has said that it plans to invest 30 billion yen to 40 billion yen ($340 million to $450 million) to shift half its capacity at the Hiroshima plant to 40-nanometre production.

No date has been set for the completion of the shift, Elpida spokesman Michinari Tsurumaki said. Elpida is also yet to decide when it will shift to smaller circuitry at its joint venture with Taiwan's Powerchip Semiconductor Corp.

Using narrower circuitry would boost chip output by 44 percent compared to current 50-nanometre production, it said in a release. That would lower per-chip costs, but also increase output.

Samsung began bulk production of 40-nanometre chips in July.

Elpida's Hiroshima plant uses 50-nanometre technology to cover output of 10,000 wafers per month. The plant has a total 125,000 wafers-per-month output capacity.

Elpida grabbed 110 billion yen in loans from its banks in late September, including the government-backed Development Bank of Japan, and raised another 60 billion yen from investors to pay back debt and invest in new technologies.