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Samsung plays down MS Vista delay, shares fall

Written by: Staff
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SEOUL, Mar 23 (Reuters) Samsung Electronics Co. Ltd. said on Thursday it expected no material impact from the delayed release of Microsoft's new operating system, but the chip maker's shares fell on concerns over weaker computer sales.

Microsoft Corp., the world's biggest software maker, said on Tuesday it planned to delay the consumer launch of its much-anticipated Vista operating system until after the holiday season, raising the prospects of slower computer sales during a key sales period later this year.

''Samsung doesn't expect any material impact from the delay of Vista,'' Chu Woosik, senior vice president of Samsung's investor relations, said by telephone. ''We initially expected Vista to be introduced at the end of the year anyway.'' Chip makers had hoped the launch of Windows Vista, which needs greater memory, to provide a boost in the otherwise slow PC market this year.

''There should be some delays in PC purchases, but the impact will be too small to change the overall view on the market,'' said Song Myung-sup, a senior analyst at Goodmorning Shinhan Securities.

Song noted demand for dynamic random access memory (DRAM) chips, used mostly in computers, for game consoles, digital televisions and high-end mobile phones would steadily rise, providing support.

Chu also forecast the DRAM market would remain strong in the second half of this year helped by persisting constraints on computer chip supply in the industry.

Leading chip makers are increasingly focused on more profitable NAND-type flash memory, but some companies have had difficulty migrating into more advanced chip production technology, he added.

Samsung has enjoyed stronger-than-expected prices of computer memory chips in the first quarter, while prices of flash memory chips, popular in MP3 music players and digital cameras, have fallen sharply on the seasonally-weaker demand.

Samsung shares fell 0.98 per cent to end at 608,000 won, extending a more than 3 per cent fall in the prior session.

Concerns over falling NAND prices and the strong won currency also have pressured shares of Asia's most valuable technology firm.

Morgan Stanley cut its 2006 and 2007 earnings-per-share forecasts by 8 per cent and 5 per cent, respectively, citing a weaker business environment for NAND memory, mobile phones and flat panels.

Some investors were also cautious after the U.S. Justice Department said on Wednesday three of Samsung's executives agreed to plead guilty and serve jail time as a result of the U.S.

government's investigation into price-fixing in the memory chip sector.

REUTERS SD PM1556

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