Market Report - Chips Are Down, But Makers See Rebound

ZHANG:
On today's Market Report, a look at the challenges facing the memory chip industry, one of the leading sectors driving the Asian tech market. PC memory chip makers are facing the worst downturn in the sector's history, but greater chip use in cutting-edge products is lending a hand.

More powerful chips in smartphones and game consoles such as the Xbox and the Wii have helped to reduce supply that sent some prices tumbling 90 percent.

But the head of world No. 4 Qimonda, Kin Wah Loh, says a DRAM recovery is finding traction.

[Kin Wah Loh, Chief Executive, Qimonda]:
"In the last six weeks we have seen prices creeping up nicely, even though it is a very low level, but it is the first sign that supply and demand parity and that is good news."

Global DRAM chip sales are seen rising to $33 billion in 2009, while big firms like world No. 2 Hynix Semiconductor branch out to less-commoditized, more profitable mobile or graphic areas.

Hynix executive O.C. Kwon says the memory chip market is finding balance.

[O.C. Kwon, Senior Vice President, Hynix Semiconductor]:
"We think the worst part of the DRAM market cycle is already behind us and going forward from here, DRAM pricing environment will be more favorable, especially going into the second half."

Cutting costs is also a key strategy for the market, and both Hynix and Qimonda are trimming spending and putting new plant construction on hold.

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News & Politics

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