Japan may give Elpida Memory an extension government guarantees for loans and preferred stock so that it can have more time to talk with Micron Technology about a capital tie-up, the Yomiuri newspaper said on Friday. The newspaper said Micron’s new chief executive, Mark Durcan, was believed to view potential talks with debt-laden Elpida positively and that the companies would negotiate with a view to strengthening their chip line-ups for smartphones. Elpida, Japan’s last remaining maker of dynamic random access memory (DRAM) chips, has been battered by a slump in chip prices, and this month flagged doubts about its ability to continue as a going concern as it had not been able to agree on support from banks and the government. The company, a supplier to Apple Inc, was reported last month to be in talks with US-based Micron, but hopes for a tie-up stalled when Micron CEO Steve Appleton died in a small plane crash in early February. The Yomiuri said Micron was urging the government and its banks to continue to support the chipmaker, which has some 400 billion yen ($5 billion) in interest-bearing debt, but there remains some caution the part of the banks to do so. On Thursday, Elpida, which competes with South Korea’s Samsung Electronics and Hynix Semiconductor, announced plans to double the number of common shares it can issue, pending approval at a shareholders’ meeting on March 28 -a move that could pave the way for a white knight rescue. Elpida shares fell 5 per cent on Friday, hurt by dilution concerns after the announcement about a potential share issue, giving up some of their 12 per cent gains made a day earlier after regulatory filings showed units of Goldman Sachs and Credit Suisse firms.