Taipei, Nov. 19, 2008 (CENS)--Taiwan`s DRAM sector has suffered a sizable loss in the first three quarters of this year, further worrying banks on the island regarding their non-performing loans (NPL). So far domestic banks have lent the DRAM suppliers some NT$420 billion (US$13.13 billion at US$1 = NT$32), or 2.3% of their total loans.

By the end of the first half of the year, Powerchip Semiconductor, Inotera Memories, Nanya Technology Corp., and ProMos Technologies Inc. together borrowed NT$233.3 billion (US$7.29 billion) from domestic banks, a sharp rise of 32% from the corresponding NT$176.9 billion (US$5.53 billion) recorded at the end of 2007, with the combined loans being 1.28% of the total.

Powerchip and ProMos mainly borrowed from government-linked banks, including Bank of Taiwan, Taiwan Cooperative Bank, Mega International Commercial Bank, and Hua Nan Commercial Bank, which lent the two firms a total of NT$14.6 billion (US$456.25 million), NT$13.4 billion (US$418.75 million), NT$10.6 billion (US$331.25 million) and NT$10.3 billion (US$321.88 million), respectively. Besides, private banks as Cathay United Bank and Chinatrust Commercial Bank also lent NT$7.7 billion (US$240.63 million) and NT$7.4 billion (US$231.25 million) to the two respectively.

Insiders disclosed that DRAM makers have borrowed 80% by their total loans with collaterals as factories, machines and related facilities. However, the banks fret that some of the DRAM suppliers may not be able to, as usual, keep repaying interests on such loans seeing that the market downturn is forecast to last into the coming year.

(by Judy Li)