Samsung memory chip unit expects a rosy Q2

BANGALORE, INDIA: Riding the crust of steady rises in chip prices, coupled with production cutbacks the memory chips business at Samsung Electronics is set to return to the black during the second quarter of the fiscal.

Samsung is the industry leader in both DRAM and NAND flash chips. DRAM chips are widely used in traditional PCs, while NAND flash chips are used in high-end handheld electronic gadgets.

Adding to the charm is the rise in portion of highly-advanced DRAM and NAND flash memory chips in its sales has also helped the company to save manufacturing costs, said the company. It is expected that Samsung's memory chip unit is gearing up to clock 182.1 billion won in operating profits during the April to June period.

The Korean major had been impacted largely by a plummeting of chip prices, weaker demand for electronic devices and higher inventories. These factors had forced the company's memory chip business record operating losses for the second consecutive quarter. During Quarter One, DRAM prices fell by over 80 per cent year-on-year, while NAND prices decreased by some 40 percent.

However, sending out positive signals, chip prices have been showing signs of a mild recovery on hopes that eased worries over the global economy may spur consumer demand for electronics gadgets since April.

Production of enhanced chips by using 50-nanometer level processing technology in DRAM and 40-nanometer level in NAND is also seen as helping Samsung price-wise. It may be noted that Samsung had entered into a deal with Apple to supply 70 million NAND flash chips for new iPhone models