Samsung Electronics expects stronger chip demand

HONG KONG, May 17: Samsung Electronics Co. Ltd., the world's top maker of memory chips, expects stronger demand for computer memory chips in the second half of this year and sees NAND flash memory chip prices strengthening.

Samsung, the number-two maker of large liquid crystal display (LCD) panels worldwide, also expects increased demand and better pricing for LCD panels for notebooks and personal computers in the second half, Chu Woosik, Samsung's senior vice president for investor relations, told Reuters on Wednesday.

Chu attributed the expected improved demand for DRAM to a quicker transition to DDR2 -- a newer, faster chip -- an introduction of a new personal computer and stronger seasonal sales.

Samsung raised prices of NAND-type flash memory chips -- used in digital cameras and music players -- by a ''mid-single-digit'' percent earlier this month.

Chu declined to predict the next NAND price move but said he expected NAND flash prices to strengthen later on.

''Lately, we are seeing better demand mostly coming from the NAND flash card area,'' he said.

''On top of that, many consumer digital device makers are waiting for new products to be introduced in time for the summer.

Going forward, we expect the (NAND) market to strengthen, including the pricing environment.'' Chu also said he was confident that Samsung, the world's third-biggest mobile phone maker, would beat its 2006 handset sales target of 115 million units.

He said the company did not have a new target for handset sales but he expected the sales to be ''a lot stronger'' in the second half due to seasonal factors and the launch of new products.

Samsung currently sells slightly less than 10 million handsets a month, he said, adding that the company would launch 30 new handset models in the second quarter of this year.

Samsung last month posted a bigger-than-expected 25 percent fall in first-quarter operating profit, hit by sliding margins in mobile phones and memory chips.

Shares in the company have fallen 0.9 percent so far this year, lagging a 1.6 percent gain in the benchmark index.

REUTERS