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To: Proud_Infidel who wrote (38807)	10/26/2000 9:38:51 AM
From: Proud_Infidel	Read Replies (1) \| Respond to of 70976

S.Korea's chip exports expected to rise 15-20% next year SEOUL (Reuters) - South Korea's semiconductor exports are expected to rise 15 to 20 percent in 2001 to a record $30 billion from this year, an industry group said on Wednesday. The Korea Semiconductor Industry Association (KSIA) also said a recent chip price softening would not last long and thus was unlikely to lower Korean chipmakers' profits. ``Korea's total chip exports are expected to rise 15 to 20 percent in 2001 given forecasts that the industry's solid growth would continue into 2002,'' Suh Jung-hun, president of KSIA, told a press conference. KSIA said in a statement the country's chip exports were expected to rise 25.7 percent year-on-year to $25.5 billion this year and imports were forecast to jump 22.8 percent to $19.8 billion in the corresponding period. Total chip sales by Korean manufacturers were expected to hit $27.5 billion this year, said the statement released at the start of a three-day Korea 2000 chip exhibition. South Korea is the world's largest maker of memory chips in terms of output capacity. Semiconductors, the country's single biggest export item, accounted for 14.1 percent of the nation's total exports of $143.69 billion in 1999. The association said memory chips accounted for 83 percent of Korea's total semiconductor production in 1999, but that the industry was steadily diversifying its output portfolio from memory to the non-memory sector. STABLE DRAM BUSINESS KSIA said it did not expect the recent softening of DRAM (Dynamic Random Access Memory) prices to lower profits for Korean chipmakers. ``Korean chipmakers' prevailing view is that the DRAM business will be stable and grow until 2002, given the fact that new memory investment has not created oversupply,'' it said in the statement. ``The recent softening chip price is unlikely to lead to their deteriorated profitability.'' Samsung Electronics, the world's largest maker of computer memory chips, on Monday posted record third-quarter earnings of 1.7 trillion won ($1.50 billion), up from 690 billion won a year ago. Its sales in the July-September period reached a record 8.8 trillion won, up from 6.3 trillion won a year earlier. Samsung shares closed down 6,500 won at 160,500 on Wednesday. The chipmaker's share has declined 37.41 percent in the year to date amid a global sell-off in chip stocks, while the Korea Composite Stock Price Index has dropped 46.8 percent in the same period. PRICES SEEN STABILISING END-2000 Hyundai Electronics, another Korean chip giant, last week posted 66 billion won in third-quarter earnings. Its stock has declined 63.2 percent so far this year, and closed at 8,970 won on Wednesday, up 110 won on the day. KSIA said the recent drop in DRAM prices was temporary as U.S. and European chipmakers tried to increase their sales before the fiscal year 2000 ended in September. Massive shipments into the spot market by some latecomers from Southeast Asia also have contributed to the weakness, it said. PC makers, who had built up their inventories on fears of a DRAM shortage forecast earlier, also reduced their chip purchases to maintain optimum stock levels, it said. ``We see international prices for semiconductors stabilising towards the end of this year with a recovery in sales possible in November due to seasonal factors,'' said Suh at KSIA. ``Some declines in chip prices could lead to an increase in demand from PC makers.'' The spot price for the industry standard 64M 8x8 PC 100 SDRAM chip has dropped to around $4-5, off its 52-week high of $12.77, leading some analysts to say a down-cycle in the chip market could arrive sooner than expected. ``It seems a down-cycle in the chip market will arrive early next year, six to 10 months earlier than our projection, and this will lower chipmakers' profits in the second half,'' Noriya Nishi, senior analyst of Credit Suisse First Boston in Tokyo, told Reuters earlier this week. Lee Yun-woo, chief executive of Samsung Electronics' semiconductor business and also chairman of KSIA, said on Monday the DRAM market was expected to reach a tight supply situation in the second half of 2001. ``Oversupply is not foreseeable until 2003 given the lack of new fabs moving into volume production over the next 12-18 months,'' he said.