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Technology Stocks : Disk Drive Sector Discussion Forum -- Ignore unavailable to you. Want to Upgrade?

To: Z Analyzer who wrote (7063)	9/3/1999 12:30:00 PM
From: Mark Oliver	Read Replies (1) \| Respond to of 9256

Does it seem reasonable to conclude that if DRAM demand is up, the same might be true for HDD demand? Here, they site demand from "free PC's". Free Pc's would probably come with the most basic drive. It would seem that at least for this month, Samsung is doing well enough to continue supporting their HDD business. Regards, Mark Samsung sees profit boost from chip prices By Reuters Special to CNET News.com September 3, 1999, 4:50 a.m. PT The world's top memory chipmaker, Samsung Electronics, said strong chip prices will give a big boost to profits, which analysts said could reach nearly $2.5 billion in 1999. "The 64-megabit DRAM price rose across $10 yesterday on the spot market and [the strong price] would give a considerable boost to our profit for the coming period," Samsung spokesman James Chung told Reuters. The 64-megabit dynamic random access memory chips are the current mainstay in the world market and the biggest contributor to the South Korean company's business. Analysts said the current price, compared with around $8 early this year and a low of $5.6 for the year, was attributable to a blackout in Taiwan and a "free PC" boom in the personal computer industry. "The Taiwan blackout has reduced the world DRAM supply by some 2 percent, which was an important factor in the DRAM industry, which is sensitive to supply and demand situation," said Shim Yong-jae, an analyst at SG Securities. Taiwan's key industries were temporarily paralyzed in late July by a power blackout and damage inflicted on semiconductor and other electronics makers has been estimated at more than $62 million. Analysts said the chip price strength could also be attributable to increasing demand for personal computers under the spreading "free PC" marketing strategy of providing free PCs to people who sign up for Internet access. "At first we thought the price rise was due to a temporary shortage in supply resulting from a blackout in Taiwan and from a temporary fall in yield due to attempts by makers to introduce new shrinkage technology," Samsung's Chung said. But the price strength proved to be more cyclical and the upbeat trend is now expected to hold on for the time being, he said. "In terms of annual profit, a $1 rise in the price usually raises our profit by about $300 million," he said. But he declined to give a forecast for the company's profit. He had earlier said the company's after-tax profit for calendar 1999 was expected to top $2.3 billion, compared with $263 million in profit for 1998. Analysts said they were upgrading their earnings forecasts for Samsung Electronics to somewhere near $2.5 billion. News of the strong upturn in chip prices cheered investors on the Korea Stock Exchange, lifting share prices of all three South Korean memory chip makers. The three makers took a combined share of 37.9 percent on the world DRAM market in 1998 sales, with Samsung alone accounting for an 18.6 percent share. Samsung Electronics is a flagship unit of the Samsung Group and also makes home electronics goods and telecommunications equipment.