Samsung strategises to cover DRAM losses

TAIPEI, TAIWAN: In an attempt aimed at to cover losses from DRAM sales, Samsung Electronics is rumoured to be into efforts to provide NAND flash prices that maintain profitability.

This move, said industry sources, is blatantly in contrast to its DRAM pricing strategy. It is being said that the Korean chip maker has stayed relatively inactive with regards to raising quotes for mainstream DDR2, while pushing up NAND flash prices.

The industry in Taiwan is of the opinion that Samsung may have resorted to such a measure following DRAM contract prices for 2GB DDR2 modules and 1Gb DDR2 chips remaining unchanged for the first half of July.

It has been pointed out that the pricing for 2GB DDR3 parts and 1Gb DDR3 continue its rally in the same period. Samsung is believed to be looking at crawling back to profitability by the second-quarter of 2009. The memory division of the company had witnessed second straight operating losses during the first quarter.

Samsung's strategy of using profits from NAND flash has been adopted in a bid to cover losses from DRAM sales. This move in turn is likely to prove a hassle for Taiwan-based DRAM chipmakers.

With major suppliers including Samsung cut back supply in early 2009, mainstream NAND flash chips have been quoting contract prices at above cost levels. The improved prices have allowed Samsung to start seeing profits from its NAND flash business, the sources added.