Samsung Electronics expects the oversupply of memory chips used in personal computers to ease in 2008, especially in the second half.

Although the market for DRAM chips is still tough, rising demand for NAND-type flash chips used in portable gadgets, such as Apple Inc's iPod, means manufacturers will switch more production from DRAM to NAND, easing DRAM supply, said Chu Woo-sik, executive vice president in charge of investor relations.

"The market is very difficult for DRAM," he said at a technology forum organised by Samsung. But the world's biggest maker of memory chips reckons the DRAM market will recover next year, probably at the beginning of the second half, he said.

In October Samsung posted a flat third-quarter net profit as sluggish computer memory chip prices offset strong flat screens, and had warned that the whole memory sector could see losses in this quarter.

The DRAM sector has been plagued with oversupply since the beginning of the year, while strength in the liquid crystal display (LCD) industry has been largely due to a shortage in supply.

Samsung's forecast is more bullish than that of market research firm iSuppli, which on Nov. 14 cut its rating on suppliers of DRAM and flash memory chips to "negative" from "neutral", citing a supply glut and a fall in prices.

ISuppli said market conditions should slowly improve during the next few quarters, with DRAM picking up more quickly than NAND.

By: DocMemory
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