By Sinead Carew and Mayumi Negishi - Analysis
NEW YORK/TOKYO (Reuters) - Investors looking to bet on the global chip industry may want to put their money in fast-growing analog chips, with the downtrodden computer memory market poised for only a modest recovery this year.
Prices for flash memory chips used in portable devices appear to be stabilizing, but executives at the Reuters Global Technology, Media and Telecoms Summit said they were less certain of the timing of a recovery in that sector.
"I'm kind of worried about flash," said Hiroshi Suzuki, chief executive of Japan's Hoya Corp (7741.T: Quote, Profile, Research, Stock Buzz), which makes photomasks used to copy electronic circuit patterns onto semiconductors.
"For DRAM, I think we probably saw the bottom already. It looks like the flash supply capacity equation is actually worse than the DRAM side," Suzuki said at the Tokyo summit.
Analysts expect global sales of dynamic random access memory, or DRAM, mainly used in computers and increasingly in cutting-edge mobile phones, to fall by 10 percent this year before growing by about 20 percent in 2009.
Top DRAM suppliers Samsung Electronics Co Ltd (005930.KS: Quote, Profile, Research, Stock Buzz) and Hynix Semiconductor Inc (000660.KS: Quote, Profile, Research, Stock Buzz) have seen prices rebound since April, leading industry executives to expect a return to a balance between supply and demand sometime in the second half of the year.
"The DRAM industry has been in the last couple of quarters going through a dramatic price decline. It's simply (that) there was too much supply in the market," said Kin Wah Loh, the chief executive of Qimonda (QI.N: Quote, Profile, Research, Stock Buzz), the world's fourth-largest maker of computer memory chips.
"We are seeing now the effect of this reduction in supply and that is a good sign," Kin said in Tokyo. "It's really a matter of time, technology and supply. Going forward in the second half the supply will be more balanced." Continued...
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| Japan Investment | Jul 01 - 2, 2008 | Country Summits |
| Global Real Estate | Jun 23 - 25, 2008 | Real Estate |
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| Investment Outlook | Jun 09 - 12, 2008 | Financial Services / Exchanges |
