PREVIEW-Asian chipmakers Q2 seen strong, H2 growth to weaken

* What: Hynix, Samsung, Toshiba and Elpida Q2 earnings

* When: From Thursday, July 22

* Chip price growth leveling off, possible oversupply from
Q4

* Smartphone, tablet PCs to drive growth in H2

By Miyoung Kim

SEOUL, July 19 (Reuters) - The robust sales momentum in
Asian chipmakers is likely to extend at least into the current
quarter, but Europe's troubled economies could affect demand
and crimp profits from the fourth quarter.

Samsung Electronics Co (005930.KS), Hynix Semiconductor Inc
(000660.KS) and Toshiba Corp (6502.T) are enjoying strong
profit growth as the global DRAM and NAND-type flash memory
market is estimated to grow around 60 percent to $60 billion
this year on revived consumer and corporate spending worldwide.

However, a strong rally in prices of dynamic random access
memory (DRAM) chips since last year is forcing PC makers to
slash per-system memory content, while rising supply growth and
a potential demand slowdown from Europe could hit prices
further.

"Q3 is normally strong demand season but it's uncertain
whether things will actually improve sharply from Q2," said
Jong-wook Ban, an analyst at Daishin Securities.

"A potential tightening in China could also force buyers to
turn more cautious, while a weak euro will hit profitability
(of Asian chipmakers)."

DRAM prices have already started weakening and brokerage
CLSA estimates Samsung's average selling prices of DRAM, mostly
used in computers and servers, to drop 10 percent in the third
quarter and 20 percent in the fourth quarter. Explosive growth
is however forecast in NAND flash memory chips, used in mobile
phones and digital cameras.

Last week, Intel (INTC.O), the world's top chipmaker, set
an upbeat tone for the industry earnings and brushed off
concerns of consumption slowdown in Europe with
forecast-beating results and strong sales outlook.
[ID:nN12197658]

"Intel's view is from suppliers' perspective, which is
rather more upbeat," Harrison Park, mobile communications PC
business team leader at LG Electronics (066570.KS), said on
Monday.

"Europe is now a factor that is slowing down overall PC
demand growth and the market is in a correction period,
although things could improve again from late this quarter on
strong seasonal demand as we approach back to school season."

RECORD RESULTS

Both Samsung and Hynix of South Korea, the world's No.1 and
No.2 memory chipmaker respectively, are set to report strong
second-quarter profits from chip sales and improve earnings
further in the current quarter.

Samsung, which flagged a forecast-beating record quarterly
profit this month, is expected to post 2.7 trillion won in
operating profit from chip sales, making up more than half of
the firm's entire profit estimated at 5.0 trillion won.
[ID:nTOE65K05V]

The result from the semiconductor business would mark a 40
percent increase from the first quarter and nearly eight-fold
rise from a year ago. Margins were also seen rising sharply to
33 percent from 5.5 percent a year ago.

The sector's supply growth will accelerate in the second
half as second-tier firms overcome technical glitches involving
transition into a finer chip production process, which have
limited supply growth in the current uptrend so far.

NAND spot prices rebounded this month following Apple's
(AAPL.O) upbeat sales of iPhone and iPad, which use Samsung and
Toshiba's NAND chip supply growth and cause spot supply tight,
according to BofA Merill Lynch.

Samsung shares have lost 5.5 percent over the past three
months, while Hynix fell 15 percent, versus a flat KOSPI
.KS11. Toshiba shares declined 12 percent and Elpida shed 35
percent against a 15 percent rise in the Nikkei .N225.
COMPANY APRIL-JUNE YEAR AGO (LOSS) JAN-MARCH
DATE
Samsung 2.7 trln won 0.34 trln won 1.96 trln won July
30
Hynix 1.0 trln won (211 bln won) 799 bln won July
22 *Toshiba 29.6 bln yen (37.6 bln yen) 104.3 bln yen July
29
Elpida 37.6 bln yen (42.3 bln yen) 37.8 bln yen July
29
Note: Estimates are based on data from Thomson Reuters
I/B/E/S.
* Figures are operating profit/loss and numbers for Toshiba
are for the entire company, not just for the chips business.
(Additional reporting by Sachi Izumi in TOKYO; Editing by
Anshuman Daga)