Another drop expected in global chip sales

Samsung Electronics, the world’s largest maker of computer memory chips, is forecasting that global sales of chips will drop for a second year in 2006 because of lower prices. Revenue from dynamic random access memory, or DRAM, chips is poised to shrink 12 percent next year after falling 4 percent this year, the company said in material presented to investors in Hong Kong yesterday. DRAM oversupply will continue until the third quarter of this year before the glut ends in the fourth quarter, the company said. Oversupply of DRAM, mainly used to store data in personal computers, has driven down prices and caused profit drops at Samsung and its rival Hynix Semiconductor, while other chipmakers such as Infineon Technologies AG and Elpida Memory posted losses during the latest quarter. Still, prices are forecast to rise starting next month on rising demand. “We expect a strong rebound in the third and fourth quarters with strong PC shipment growth,” said Robert Yi, a vice president at Samsung, during his speech to investors. Contract and spot prices of the 256-megabit, double-data-rate DRAM, the most widely used type of memory in computers, are poised to rise in June after hitting a year low this month, Dramexchange.com, Asia’s largest spot market for chips, said last week. Global sales of flash memory chips known as NAND, which store data and songs in consumer electronics such as mobile phones and MP3 players, will rise 36 percent next year after growing 8 percent in 2005, Samsung said. Samsung is the world’s largest flash memory maker. Separately, growth in global shipments of liquid crystal displays of at least 10 inches diagonally will decline next year, Samsung said.