Apprehension evident at Korean tech fair

Samsung, LG wary over murky outlooks in chips, LCDs

By Kim Yoo-chul

GOYANG, Gyeonggi Province ― The annual Korea Electronics Show (KES) has consistently been a battleground for bragging rights for the country's technology industry, but the atmosphere for this year's event appears to be subdued by the sagging economy.

Although industry heavyweights like Samsung Electronics and LG Electronics were displaying the latest of their products in consumer electronics, computers and mobile devices, company officials weren’t serenading journalists with lavish predictions like they did in better years, as the global demand for digital products continues to be affected by a shaky world economy.

Samsung managed to boasts its solid sales in flat-screen televisions ― a market where it’s firmly established as the global leader ― and also a promising start for next-generation premium products like televisions enabled with three-dimensional (3D) video.

However, the Korean technology giant was more modest about the expectations for his chip business in the coming months, and its rival Hynix Semiconductor appeared to be sharing the gloom.

Samsung is built better to weather economic downturns than most of its global rivals, thanks to its dual strength in finished products and parts.

The company is the world's largest maker of televisions, computer memory chips and liquid crystal displays (LCDs) and trails just Nokia as the runner-up maker of mobile phones.

The uncertainties in the markets for chips and LCDs are a concern for the company, which is suffering from eroding confidence in the handset market, where it struggles to compete with Apple in consumer smartphones, and expecting increasing competition in televisions coming from Sony and other major makers.

``Samsung expects the global market for flat-televisions to rise by 15 percent to reach 230 million for 2011. We expect strong seasonal demand during the fourth quarter,’’ said Yoon Boo-keun, the president of Samsung’s display division.

It has been a dismal LCD market in recent months, due to rising inventory and slowing demand, but Chang Won-kie, who leads Samsung’s LCD division, expressed hope for increased shipments based on flat-screen televisions and computers.

Officials at LG Display, which competes with Samsung for supremacy in the global market, expected the LCD market to bottom out during the fourth-quarter of this year and make a modest recovery at the start of the year.

Chips spell trouble

Officials at Samsung and Hynix were having trouble in coming up with something positive to say for the chip industry, with both companies admitting that a turnaround will be distant.

Both companies are failing to fix their plans for facility investment for next year, due to the industry’s current condition of oversupply.

The market wouldn’t visibly improve until the latter half of next year, according to Kwon Oh-hyun, Samsung’s chip boss. Hynix CEO Kwon Oh-chul was equally pessimistic.

``We predict chip prices to recover from the mid-second quarter next year,’’ said Samsung’s Kwon.