Samsung Elec posts weak Q1 on chip price tumble

SEOUL, Apr 13 (Reuters) Samsung Electronics Co. Ltd. on Friday reported a 15 percent fall in quarterly net profit, hurt by steep drops in semiconductor prices and lacklustre business in flat screens.

The world's top memory chip maker and the third-largest mobile phone producer earned 1.6 trillion won ($1.72 billion) in January-March net profit, slightly weaker than a 1.66 trillion won forecast by nine analysts surveyed by Reuters.

The result compares with a 1.88 trillion won net profit a year ago and 2.37 trillion won earned in the fourth quarter.

Stronger-than-expected demand for DRAM chips last year prompted manufacturers to switch more capacity to DRAM from less profitable NAND flash, leading to an oversupply of DRAM, while demand linked to Microsoft's new Windows Vista operating system has so far been sluggish.

The April-June outlook remains grim as prices for DRAM (dynamic random access memory) chips, widely used in personal computers, are expected to start their recovery only in the middle of the quarter, analysts say.

Shares in Samsung Electronics, the most valuable technology stock outside the United States, fell 8.2 percent in the first quarter, underperforming a 1.3 percent gain on the wider market <.ks11>.

REUTERS DKS PM0634