Samsung Electronics CEO sees signs of DRAM recovery

The computer memory chip market has hit bottom, although a recovery in prices is not expected until the fourth quarter of this year, said Yoon Woo Lee, president of Samsung Electronics in a television interview Wednesday morning.

Speaking on CNN's Asia Business Morning program, the head of the world's largest DRAM (dynamic random access memory) maker said inventories of unsold personal computers, one of the factors blamed for the plunge in memory prices as PC makers stopped buying chips, are reducing, and he expects to see the first signs of recovery in the market in several months.

"For the DRAM market, I think the price has hit the bottom," he said. "This price will maintain this trend as a relative stable phase and the recovery signs are expected to begin in the third quarter of this year and hopefully we pick up the price from the fourth quarter of this year."

Lee's comments come as the DRAM spot market has seen a slight recovery in the last few days. Prices for commodity 64M-bit DRAM chips were between US$1.90 and $2.40 on Tuesday, up around $0.30 from a week earlier, while more advanced 128M-bit DRAMs were selling for between $5.00 and $5.30, up $1.20 on the week, according to data from market research company Independent Commodity Information Services - London Oil Reports (ICIS-LOR).

DRAM chips are used as the main memory inside personal computers and their prices have been falling since the middle of last year, when PC sales started slowing down and inventories began to build up at the chip makers. The market is cyclical and highly volatile -- factors which have led many Japanese DRAM makers to concentrate on high end chips or even exit the business altogether by spinning off their DRAM manufacturing units.

Samsung Electronics, in Seoul, can be contacted at +82-2-727-3355 or found online at http://www.samsungelectronics.com/. ICIS-LOR, in London, is at +44-20-8652-3335, or at http://www.icislor.com/.

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