Samsung Elec raises NAND chip prices, shares rise

SEOUL, May 9 (Reuters) Samsung Electronics Co. Ltd. , the world's top memory chip maker, has raised its prices for NAND flash chips by a mid-single digit percentage, an executive said on Tuesday, sending shares in local chip makers higher.

Robust sales of flash memory chips, used in hot-selling music players and digital cameras, boosted earnings at chip makers in the fourth quarter of 2005.

But in recent months prices of NAND-type memory chips had tumbled as memory chip makers hurried to shift production capacity to the profitable flash chips and due to cooling demand for digital gadgets after the holiday season.

''We have seen an improvement in demand (for NAND chips) as early as end-April,'' Chu Woosik, Samsung's senior vice president of investor relations, said by telephone. ''We expect the strengthening to continue towards the latter part of the second quarter.'' Chu said he expected manufacturers of consumer electronics devices to introduce higher-density NAND flash chips in their products throughout the year.

An executive at Hynix Semiconductor Inc., the world's No.2 memory chip maker, also confirmed NAND flash prices were improving.

''We have seen a steady increase in demand,'' said James Kim, director of investor relations at Hynix, declining to elaborate.

Hynix had said the average selling price for NAND chips fell 29 percent in the first quarter from the fourth.

Analysts had been predicting a pickup in demand for NAND chips as soon as the prices became attractive enough for electronic device makers.

Samsung's Chu also said the firm expected the first flash memory-based personal computers to be launched as soon as June or July -- much earlier than previous industry forecasts for a late 2006 introduction.

Samsung Electronics shares were up 1.07 percent to 662,000 won by 0218 GMT, after earlier rising as much as 1.5 percent, compared with a 0.04 percent fall in the main KOSPI index Hynix shares rose 5.71 percent to 33,300 won.

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