Korean analysts are predicting windfall profits for the country’s chipmakers following the publication of a report by US research firm IC Insights which predicts a strong recovery in the international DRAM market. The report says a memory chip boom will start this year and gather momentum over the next few years following several years of rapid decline from the peak in 1995 when the market was worth $40.8bn.
It predicts a 33% increase from $14bn to $18.6bn in terms of the price of total output in 1999 compared to last year. Continued expansion will see a $54.8bn market by 2003, following growth to $27.4bn in 2000 and $43.9bn in 2001, it forecasts. It notes that manufacturers have been slow to invest in new capacity following massive over-capacity problems which drove the price right down, and says current expansion plans should keep demand and supply roughly in equilibrium so keeping prices at profitable levels for manufacturers.
In the absence of another surge in facilities investment as was the case in 1994/95, there is every indication that the market will witness another major boom over the next few years,” IC Insight said. Prices of the current industry-standard 64Mb DRAMs are already on the rise, having bottomed out in late June, according to Korean and Japanese manufacturers. A tight supply situation has been further tightened with a major blackout in Taiwan having impacted on production there. It says that if current trends continue, Samsung Electronics and Hyundai Electronics Industries stand to make at least an extra 50bn won ($42m) each a month in profits for the rest of the year. รก
