SEOUL, SOUTH KOREA: Asian memory chipmakers are expected to post another set of quarterly losses on weak consumer demand for personal computers and electronics, but growing signs point to steady improvements over the rest of the year.

The memory chip downturn, which started in early 2007 and was compounded last year by the global economic slump, has claimed a heavy price from every manufacturer and has triggered a wide-ranging restructuring process in the industry.

But analysts now see a faint light at the end of the tunnel.

"The long downcycle in the memory industry may be coming to and end," said Peter Yu, an analyst at BNP Paribas. "After inching up in the second quarter, chip prices should show more sustainable improvements in the third."

After several quarters of brisk overproduction, cash-starved companies finally slashed their total output and some balance is returning to the market for dynamic random access memory (DRAM)chips, widely used in personal computers.

"Prices have clearly hit a bottom, and while they may not recover very quickly, they are not likely to plunge back to the low levels seen in the first quarter," said Kim Ji-soo, an analyst at Goodmorning Shinhan Securities.

Cautious optimism also surrounds the market for NAND flash chips, used to store memory in cameras, cell phones and digital music players. A shortage due to output cuts has boosted prices by 70 to 80 percent since the bottom was hit in December 2008.

While all its competitors are still expected to post steep net losses for the January-March quarter, market leader Samsung Electronics will be the lone memory maker to report a profit, thanks to its robust handset business, analysts said.

Samsung is expected to post a net profit of about 149 billion won ($110.2 million) in the first quarter, according to a Reuters survey of 12 analysts. That would be a steep fall from the 2.19 trillion won profit booked a year ago but a slight improvement over the 22 billion won net loss it suffered in October-December in its first-ever losing quarter.

For more DRAM results forecasts, see table below.

Samsung's semiconductor business is expected to post an operating loss margin in the 5 to 7 percent range, from a dismal 14 percent loss margin in the previous quarter. Several analysts predict the unit may turn profitable again as early as in the second quarter.

'Uncontested winner'

While skies are turning sunnier for Samsung, the mood remains

somber for the smaller players.

Germany's Qimonda has filed for insolvency and the Taiwanese government is leading restructuring of the island's moribund memory chip industry. Japan is also looking at providing support for Elpida Memory, the world's No. 3 DRAM maker.

South Korea's Hynix Semiconductor Inc, the world's No. 2 DRAM maker, is set to report another quarterly net loss of over 1 trillion won, after notching a mammoth 4.7 trillion won in total losses for 2008.

"The question now is not whether there will be a recovery, but how strong it will be," said James Song, an analyst at Daewoo Securities. "In any case, demand for DRAM will likely never reach the heights it enjoyed before the crisis. The uncontested winner will be Samsung, as it will expand its market domination in both DRAM and NAND while others struggle."