Samsung Elec sees chip prices recovering from Q2

SEOUL Oct 12 (Reuters) - Memory chip prices are likely to continue to fall before gradually recovering from the second quarter of next year, Samsung Electronics (005930.KS), the world's top memory chipmaker, said on Tuesday.

"Memory chip prices are expected to recover from the mid-second quarter," Kwon Oh-hyun, president of Samsung's chip business, told reporters on the sidelines of a conference near Seoul.

Global memory chipmakers are bracing for a subdued fourth quarter, as a fragile global economy has cut consumer demand for personal computers and other electronic products.

Prices of dynamic random access memory (DRAM) chips, mainly used in computers, have fallen more than 20 percent from this year's peak in May and may drop another 20 percent this quarter on faltering PC sales growth.

Reflecting weakening demand, research firm iSuppli said on Tuesday that inventory levels of major chip suppliers have blown to an almost oversupplied condition last quarter and to its highest level in two years in dollar value term.

"Should demand decline at a rate faster than initially forecasted -- an entirely reasonable assumption given the slower-than-expected pace of economic recovery around the world -- semiconductor inventory may go into an oversupply situation," said iSuppli researcher Sharon Stiefel.

Separately, Samsung, also the world's top TV maker, expected on Tuesday that the performance of its TV division will 'significantly' improve in the fourth quarter from the preceding quarter amid market concerns of steeper price competition due to weak consumer demand.

"Our performance will significantly improve in the fourth quarter from the third quarter," Yoon Boo-keun, head of Samsung's visual display division told reporters at the same conference. (Reporting by Miyoung Kim; Editing by Jacqueline Wong)