Samsung Electronics expects a global shortage of DRAM chips later this year as the industry switches production to more specialized chips used in cell phones and digital cameras, the company said Monday.

Samsung said its mobile phone sales were likely to top an earlier target of 65 million units this year. Last year, the company sold 55.6 million mobile phones. Deutsche Bank expects Samsung to ship 75 million handsets in 2004.

"We expect a shortage of DRAM chips in the second half as PC demand is traditionally higher prior to students returning to school in the fall, and before the Christmas holiday season,'' a senior executive at Samsung said.

A rebound in corporate spending is expected to drive double-digit growth in PC demand at the same time as chipmakers cut DRAM capacity to instead make flash memory chips to meet explosive demand for camera phones and digital cameras.

Analyst expected Samsung to have slashed DRAM output to 60 percent of its total memory production this quarter from above 80 percent two years ago. That would allow the company to boost flash chip production above 35 percent to fill the strong demand in flash memory.

By: DocMemory
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