PREVIEW-Asia chipmakers to bleed more, but worst seen over

* What: Asia memory chipmakers' Jan-March qtr earnings

* When: Samsung Elec (24), Hynix (24), Toshiba (May 8)

* Samsung alone to post feeble profit thanks to handsets

* Outlook cautiously bright on supply reduction

By Marie-France Han

SEOUL, April 21 (Reuters) - Asian memory chipmakers are
expected to post another set of quarterly losses on weak
consumer demand for personal computers and electronics, but
growing signs point to steady improvements over the rest of the
year.

The memory chip downturn, which started in early 2007 and
was compounded last year by the global economic slump, has
claimed a heavy price from every manufacturer and has triggered
a wide-ranging restructuring process in the industry.

But analysts now see a faint light at the end of the
tunnel.

"The long downcycle in the memory industry may be coming to
and end," said Peter Yu, an analyst at BNP Paribas. "After
inching up in the second quarter, chip prices should show more
sustainable improvements in the third."

After several quarters of brisk overproduction,
cash-starved companies finally slashed their total output and
some balance is returning to the market for dynamic random
access memory (DRAM) chips, widely used in personal computers.

"Prices have clearly hit a bottom, and while they may not
recover very quickly, they are not likely to plunge back to the
low levels seen in the first quarter," said Kim Ji-soo, an
analyst at Goodmorning Shinhan Securities.

Cautious optimism also surrounds the market for NAND flash
chips, used to store memory in cameras, cell phones and digital
music players. A shortage due to output cuts has boosted prices
by 70 to 80 percent since the bottom was hit in December 2008.

While all its competitors are still expected to post steep
net losses for the January-March quarter, market leader Samsung
Electronics (005930.KS) will be the lone memory maker to report
a profit, thanks to its robust handset business, analysts said.

Samsung is expected to post a net profit of about 149
billion won ($110.2 million) in the first quarter, according to
a Reuters survey of 12 analysts. That would be a steep fall
from the 2.19 trillion won profit booked a year ago but a
slight improvement over the 22 billion won net loss it suffered
in October-December in its first-ever losing quarter.

For more DRAM results forecasts, see table below.

Samsung's semiconductor business is expected to post an
operating loss margin in the 5 to 7 percent range, from a
dismal 14 percent loss margin in the previous quarter. Several
analysts predict the unit may turn profitable again as early as
in the second quarter.

'UNCONTESTED WINNER'

While skies are turning sunnier for Samsung, the mood
remains somber for the smaller players.

Germany's Qimonda QMNDQ.PK has filed for insolvency and
the Taiwanese government is leading restructuring of the
island's moribund memory chip industry. Japan is also looking
at providing support for Elpida Memory (6665.T), the world's
No. 3 DRAM maker.

South Korea's Hynix Semiconductor Inc (000660.KS), the
world's No. 2 DRAM maker, is set to report another quarterly
net loss of over 1 trillion won, after notching a mammoth 4.7
trillion won in total losses for 2008.

"The question now is not whether there will be a recovery,
but how strong it will be," said James Song, an analyst at
Daewoo Securities. "In any case, demand for DRAM will likely
never reach the heights it enjoyed before the crisis. The
uncontested winner will be Samsung, as it will expand its
market domination in both DRAM and NAND while others struggle."

Below is a table of results forecasts from analysts: DATE
COMPANY Q1 NET PROFIT(LOSS) Q1 YR AGO Apr 24
Samsung 149 bln won 2.19 trln won Apr 24
Hynix (1.1 trln won) (674.8 bln won) TBA
Powerchip (5346.TWO) (T$11.9 bln) (T$9.7 bln) May 8
Toshiba (6502.T) (118.2 bln yen) 1.25 bln yen* May 12
Elpida (37.2 bln yen) (29.2 bln yen)*

*Jan-March quarter
($1=1351.4 Won)
(Additional reporting by Shin Jieun; Editing by Muralikumar
Anantharaman)