DRAM market set for sustainable recovery-iSuppli

SEOUL, July 30 (Reuters) - Citing rising demand and limited supply for more advanced chips, market research firm iSuppli upgraded its near-term rating of computer memory chip suppliers to positive from neutral.

iSuppli kept a negative rating on the dynamic random access memory (DRAM) market since September 2008 before upgrading it to neutral two weeks ago.

The improvement "is a welcome relief to a DRAM market that has been stuck in a state of oversupply for nearly three years," Nam Hyung Kim, chief analyst for iSuppli, said in a statement.

"The oversupply has been a disaster for the global DRAM industry," Kim said, with its combined operating loss for the last three years totalling $15 billion.

Kim said the industry was set for a sustainable recovery that would extend into the fourth quarter and pave the way for a robust annual increase in 2010.

So far this earnings season, only market leader Samsung Electronics (005930.KS) has reported a profit in semiconductors. World No. 2 Hynix Semiconductor (000660.KS) sharply reduced its net loss and is expected to post an operating profit in the current quarter. But Toshiba Corp (6502.T) and Elpida Memory 6665.T, Japan's two biggest memory chip makers, are expected to struggle this year.

(Reporting by Marie-France Han; Editing by Jonathan Hopfner)