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Among the major DRAM manufacturers, only Samsung works without losses

DRAM vendors have faced serious financial difficulties as the resources of their partner banks were tied up due to the global credit crisis, the source said, citing data from analyst firm iSuppli.

“Even with anticipated US government intervention, the crisis means the cost of capital will rise as cash-strapped banks are reluctant to take on large, risky ventures,” senior analyst Nam Kim said in a report published by iSuppli.

This is a significant investment in DRAM production.

ISuppli downgraded its short-term rating for DRAM chips, primarily used in PCs, from Neutral to Negative at the end of September. The basis was a significant excess of supply over demand, weak demand, an unexpectedly rapid decline in prices and an approaching seasonal slowdown in the market.

With the exception of industry-leading Samsung Electronics, all major DRAM manufacturers are at a loss.

Elpida Memory and Powerchip Semiconductor announce plans to cut DRAM output.

Source: Reuters

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