Chip Prices Fall, Hitting Share Values

Affected by a fall in semiconductor chip prices, share prices of the nation's major memory chip producers are tumbling. With the spot market price of 128-megabit DRAM dropping to below $4 over the weekend, shares in Samsung Electronics Co. fell by 4,000 won ($3.23) and shares in Hyundai Electronics Co., the second largest chip maker, also dropped by 210 won Wednesday. Weak semiconductor chip prices hit the share prices of chip equipment manufacturers as well, including Shinsung Engineering, D.I. Corporation and Jusung Engineering Corporation.

On Tuesday, share prices of U.S.-based chip manufacturers such as Rambus, Micron Technology and Intel dropped sharply, pulling down the Philadelphia Stock Exchange's semiconductor index by 7.45 percent. ING Barings Securities lowered its forecast of Samsung Electronic Co.'s net profit for this year and next year by 14 percent and 8 percent, respectively. But the securities firm left the chip producer's investment grade unchanged at "buy."

"Micron Technology has inventories exceeding a supply volume of 10 weeks or more. It appears that semiconductor chip prices will remain weak for the time being," said Hyundai Securities Co.'s senior researcher, Woo Dong-jae.

"Chip inventories are rising, but I think share prices of these producers are undervalued because investors oversold these shares," said a market analyst at Indosuez W.I. Carr Securities.

by Oh Jung-hee