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Technology Stocks : Applied Materials No-Politics Thread (AMAT) -- Ignore unavailable to you. Want to Upgrade?

To: Proud_Infidel who wrote (33)	10/23/2001 1:23:11 PM
From: Proud_Infidel	Respond to of 25522

Samsung sees chip price recovery later next year By Andrew Ward in Seoul Published: October 22 2001 13:03 \| Last Updated: October 23 2001 08:59 Samsung Electronics, the South Korean chipmaker, on Monday warned the industry would have to wait until the second half of next year for semiconductor prices to recover from this year's slump. The manufacturer made the forecast as it announced a 67 per cent drop in third-quarter pre-tax profits, caused by the collapse in demand for semiconductors in the slowing world economy. Samsung's comments are among the firmest predictions to date about the timescale for recovery in the industry. Other manufacturers had said the outlook was too uncertain to forecast following the September 11 terrorist attacks on the US. The company told investors it expected the highly cyclical global semiconductor market to see balanced supply and demand by the third quarter of 2002 with a supply shortage expected in the final quarter of the year. But analysts cautioned that recovery in prices was likely to be achieved through reduced supply rather than increased demand, with weaker manufacturers leaving the market or merging with competitors. "Supply is going to have to contract more before prices recover. The problem is none of the manufacturers seem to think it's going to be them that gives more ground," said one analyst. Reduced demand for products such as personal computers has pushed down memory chip prices from about $10 per unit to less than $1 this year, forcing semiconductor manufacturers to mothball plants and lay-off staff. Samsung said it was reducing planned investment in chipmaking this year but insisted it had no plans to reduce production. Among the manufacturers thought most at risk is Hynix Semiconductor, also of South Korea, which has been pushed to the brink of collapse by hostile market conditions and heavy debt. On Friday, it announced record third-quarter losses and said it was looking to sell-off assets and forge a strategic alliance. Samsung is in a stronger position because it has less debt, more modern facilities and greater diversity. Heavy losses in its semiconductor division were offset by profits in its telecommunications, digital media and home appliances businesses. Overall, third-quarter sales were down 10 per cent to 7,200bn Won ($5.5bn), with pre-tax profits of 310bn Won, compared with 950bn Won in the same period last year. news.ft.com