Market Report- Memory chip blues

The financial crisis has slammed demand for memory-hungry gadgets like PCs and digital cameras, with chip prices falling around 90 percent in the last 18 months. Memory chip makers, battered by falling prices and electronics demand, look for bank and government aid in the worst industry downturn ever. Asian chipmakers have been battered by falling prices and electronic goods demand, but shares of Hynix Semiconductor jumped Wednesday on ideas of imminent aid. Top shareholder Korea Exchange Bank and other lenders are in talks with the DRAM chip giant to provide about $560 million in fresh funds, allowing it to stay afloat. The rare good news comes as the financial crisis hits demand for memory-hungry gadgets like PCs and digital cameras, creating the worst chip downturn in history. Shares of firms like Hynix have plummeted about 70 percent this year, while the price of 1 gigabit of memory has fallen from over $6 to around 61 cents in the last 18 months. Rival Samsung, the world No.1 in DRAM and NAND flash memory, is expected to post losses but gain market share as other firms struggle. Toshiba, the No.2 NAND player, is halting chip production at two plants for over a week, the first such move in seven years, while planning to restructure. Others, such as ProMos, the smallest of Taiwan's top three DRAM makers, are applying for government assistance amid the downturn, lifting shares Wednesday.

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YouTube | December 10, 2008