Governments Line up to Bail out DRAM Makers

DRAM makers are facing one of the worst downturns in their history and governments around the world are lining up to help companies through the mess.

Taiwan, Germany and South Korea all appear poised to offer some assistance to their DRAM chip makers. The need could not be greater. Long before the global financial crisis hit, DRAM makers suffered steep sales declines due to a glut of their chips.

DRAM prices are now at rock bottom and companies are cutting back production instead of making more chips at such steep losses. The next few weeks will be the best time in years to buy new DRAM.

But for DRAM companies and governments, problems have worsened. A few of these heavily indebted chip makers are running out of cash, and whereas a company failure would help rivals by wiping out some excess production and boosting prices, it could also have broader economic repercussions for the banks and investors that supported them.