Citing the ongoing financial crisis as the main reason, Samsung Electronics has withdrawn its $5.9 billion takeover bid to acquire US flash memory card maker SanDisk.

Samsung Electronics’ decision comes after months-long standoff with SanDisk, for which the South Korean company had offered $26 a share, later saying that it would offer a lower price than that.

In September, the SanDisk management had rejected the unsolicited offer as too low, deriding it as an opportunistic bid timed to take advantage of falling valuations amid an industry-wide downturn.

Samsung Vice Chairman and CEO, Lee Yoon-woo, said in a letter addressed to SanDisk’s board that the offer was being withdrawn “after nearly six months of efforts to pursue a transaction with no meaningful progress.” He cited “growing uncertainties in SanDisk’s business, which may continue to deteriorate in this difficult economic environment and further impact your standalone value.”

Meanwhile, a spokesman for SanDisk said Samsung’s withdrawal announcement came despite SanDisk having outlined a path for further discussions of the offer.

SanDisk’s stock has fallen sharply this year, as the $14 billion-a-year market for flash memory cards - key components of devices like digital cameras and MP3 music players - has been hit by declining demand, overcapacity and falling chip prices.

With the company having reported a second consecutive quarterly loss, the consumer demand is expected to decline further as global growth slows, in fact, the outlook actually looks pretty grim!