Samsung Upbeat about Memory Chip Recovery

Posted by: Ihlwan Moon on October 28, 2009

A year ago, the global semiconductor industry was fraught with overcapacity. The situation was particularly bad for memory chips. But suddenly the tech industry is facing supply constraints for DRAM (dynamic random access memory) chips used in computers to hold data while processors run programs and NAND flash chips used in mobile gizmos to store music, photos and data.

That’s good news for the tech sector looking for signs of recovery after a yearlong slump. And no other company will benefit more from a semiconductor supply shortage than Samsung Electronics, the world’s largest maker of memory chips. The Korean company’s chip business chief, Kwon Oh Hyun, said Oct. 28 he expected the supply of both DRAM and NAND chips to fall slightly short of demand next year, making chip prices stay firm. Samsung aims to increase its chip revenues to $25.5 billion in 2012 from an estimated $16.6 billion this year, he said.

The optimistic outlook stems from confidence that Samsung has widened its gap with rivals during the downturn. Samsung kept investing in upgrading production technologies and equipment while Japanese, American and Taiwanese rivals cut back in spending. Industry analysts say Only Samsung and Hynix Semiconductor, another Korean company, can now produce DRAM chips by printing circuit lines on wafer disks with 50 nanometer technology – a tool increasing productivity by 30% from the previous-generation technology. Samsung is poised to report a sharp rise in profits this year, thanks partly to a turnaround in its chip business.

Reader Comments

R Nelson

October 28, 2009 8:03 AM

South Korea went through extremely hard times after the war in the 50s and 60s. Iraq and Afghanistan should take note of their current success.

Benjamin Fernandez

October 29, 2009 8:30 AM

And so did Germany and Japan in the early 50's. They were able to recover from the wide spread devastation with help from the IBRD (World Bank) and the United States. If not for US and World Bank support, they would have limped on for a long time.

South Korea has been nurtured by the US since the end of World War 2.

Iraq and Afghanistan cannot stand up by themselves.. they require the support of the West. So is the US making a committed effort to rebuild these nations as it has done so in the past?

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