Japan's sole maker of dynamic random-access memory chips has been hobbled by weak prices after a surge in demand for Apple Inc's iPad, which is much less reliant on DRAM chips than conventional PCs.

It was also saddled with heavy capital spending to keep pace with well-funded South Korean rivals Samsung Electronics Co and Hynix Semiconductor Inc.

Elpida is set to file for protection from creditors with debts of 481.8 billion yen ($5.97 billion), according to corporate credit research firm Shoko Research.

Elpida President Yukio Sakamoto will brief media on the bankruptcy filing at 6:30 p.m. (0930 GMT), the company executive said, speaking on condition of anonymity, while Trade Minister Yukio Edano is due to hold a briefing on the company's situation at 6 p.m., Kyodo news agency said.

Elpida, formed more than a decade ago by the merger of several large Japanese chipmakers' struggling DRAM operations, is scrambling to meet deadlines in the next two months to repay 92 billion yen ($1.2 billion) in bonds and loans.

Lenders to Elpida, which is a supplier to Apple as well as a victim of the iPad's success, had given the company until this month to devise a turnaround plan, extending an earlier deadline, sources familiar with the situation told Reuters earlier this month.

The company had said it expected to reach an agreement with the relevant parties on the plan. But two weeks ago it said it had been unable to reach a final agreement and it doubted its ability to continue as a going concern.

"The bankruptcy protection will not mean that Elpida will stop producing chips immediately, but Elpida is shrinking and major customers will defect the company and move to South Korean companies, which means more market share for the latter," said Lee Seung-woo, an analyst at Shinyoung Securities in Seoul.

"This is not a bad picture for South Korean chipmakers."

($1 = 80.6850 Japanese yen)

(Additional reporting by Yoko Kubota in Tokyo and Hyun Joo Jin in Seoul; Writing by Edmund Klamann; Editing by Michael Watson)

• A Permanent Economic Emergency