Global DRAM sales to extend fall in 2009 -iSuppli

SEOUL, Jan 8 (Reuters) - Global sales of dynamic random access memory (DRAM) chips are expected to fall 4 percent in 2009, extending their decline for the third straight year amid a prolonged industry downturn and chronic oversupply, iSuppli said.

Sales of DRAM, used mainly in personal computers and increasingly in mobile devices and game consoles, are forecast at $24.2 billion in 2009, down from $25.2 billion in 2008, the U.S. research firm said in a note dated Wednesday.

DRAM revenue dropped 20 percent in 2008 and 7 percent in 2007.

Memory chip makers are reeling under snowballing losses as oversupply and rapidly declining electronics demand have pushed chip prices lower than their production costs. Many, including Hynix Semiconductor Inc (000660.KS) and Germany's Qimonda QI.N, were forced to seek outside help due to cash shortages.

Taiwanese DRAM makers Powerchip Semiconductor Corp (5346.TWO) and ProMOS Technologies (5387.TWO) also applied for government assistance.

ISuppli said makers' undisciplined capacity expansion in past years, aimed at squeezing the competition, was backfiring.

"In 2008, no one won this game of chicken, with players continuing their massive spending drive amid weakening demand, contributing to oversupply, price declines and a massive market downturn that is hurting all supplies," said Nam Hyung Kim, iSuppli director.

"The industry, which has been in decline for seven straight quarters, is in a stage of emergency with massive layoffs and production cuts."

The top eight DRAM makers have lost nearly $8 billion since 2007 and their total operating losses are expected to reach $11 billion by the end of next year, Kim said.

Sector leader Samsung Electronics Co Ltd (005930.KS) has invested about $27 billion in DRAM manufacturing since 2000 but holds the same market share as it did in 2000, at about 30 percent, according to iSuppli.

The research firm "cautiously" predicted the market would turn around in the second half of 2009 due to rapid reduction in capacity growth.

"Until that time, the game of chicken has turned into a game of survival -- a situation that will persist for months to come," Kim said.

(Reporting by Rhee So-eui, editing by Jonathan Hopfner)

((soeui.rhee@thomsonreuters.com; +82 2 3704 5650; Reuters Messaging: soeui.rhee.reuters.com@reuters.net)) Keywords: DRAM ISUPPLI

(C) Reuters 2009. All rights reserved. Republication or redistribution ofReuters content, including by caching, framing or similar means, is expresslyprohibited without the prior written consent of Reuters. Reuters and the Reuterssphere logo are registered trademarks and trademarks of the Reuters group ofcompanies around the world.nSEO84566