The chips are down for Apple's DRAM (Dynamic Random Access Memory) supplier Hynix Semiconductor.

The world's third largest manufacturer of memory chips is in dire financial straits. The company has fallen prey to a downturn in the memory-chip industry, precipitated by a glut in supply and a drop in demand.

Industry analyst Gartner Dataquest says that 128DRAM memory chip prices have fallen by 89 per cent in 2001 from $18 to $2. Revenue from the industry is anticipated to drop by $18 billion, from $32 to $14 billion.

The Korea Exchange Bank - Hynix's main lender - and its financial adviser Salmon Smith Barney, were last week negotiating a deal to refinance 1.3 trillion won (the South Korean currency) - $1 billion - of Hynix's debts due by the year's end. Hynix has global debts of 2.7 trillion won, to be repaid by the end of 2001 out of a total 7.3 trillion won arrears.