By Kim Yoo-chul
Staff Reporter
The market for computer memory chips is extending its winning streaks on continued demand for personal computers, cell phones and other tech products, analysts say.
Although the world's top memory chip vendor Samsung Electronics is slightly worrying over a possible "bubble" in the sector, should chipmakers' evident path to recovery be maintained for the full this year, they say.
Last month, Kwon Oh-hyun, chief of Samsung Electronics' memory division told The Korea Times that worries about a bubble are making Samsung hesitant about increasing capex until demand uncertainties are resolved.
Contract prices for 1Gb DDR2 memory have increased to between $2.41 and $2.69 in the first half of March, while even outdated DDR2 parts managed to hold on their late February prices, according to Taipei-based DRAMeXchange Technology Inc., operator of Asia's largest spot market for memory, last week.
"The rally in DDR3 chips thanks to growing demand from PC OEMs is helping the overall memory chip sector continue the positive moves," the research firm said, adding they will carry on doing this until the second quarter.
Price movement in the contract-based market is a key barometer in gauging the demand and supply cycle in chips and the profitability of all chipmakers in which companies in East Asian region are dominating the sector.
Analysts and company officials also said Apple's new tablet PC ― iPad ― is also fueling higher hopes for the flash memory chip market, which is another good sign for an overall semiconductor segment.
Officials at Samsung Electronics, Toshiba of Japan, Micron Technology of the United States ― all suppliers to Apple ― are highly optimistic about growth prospects for the full this year.
Research firms and watchers say supply remains tight for the moment also in flash chips as well as DRAM chips as the manufacturers have cut back on spending during the downturn.
NAND flash memory, the type of chips these companies make, is used to store data in electronic devices even when power is switched off, making them ideal for music players, digital cameras, smartphones and other high-end digital devices.
"The semiconductor market including DRAM chips and flash memories will make a record growth for the full this year. The leader in the both sectors Samsung will be the winner, while Hynix is forecast to report a better-than-expected profit in the first quarter," Lee Ka-keun, an analyst at IBK Securities said, defying any sharp decline in flash memory prices, either.
But some have been in line with "cautious outlook" painted by Kwon of Samsung by referring to production ramp-up from Taiwanese chipmakers.
"The overall market will see an oversupply sometime in the latter half of this year as Taiwanese firms, which has been underway to migrate thinner technologies, are increasing the outputs," Seo Ju-il, an analyst at KB Investment, said.