Samsung warns of chip glut

MAKER OF CHIPS Samsung is warning that there will be an oversupply of dynamic random access memory (DRAM) chips early next year.

The outfit said that global demand for PCs seems to be weakening and if it gets much worse there will be far too much RAM in the market.

Samsung's memory chip plants are running flat out and the chip maker expects to produce more DRAM chips and NAND flash memory chips used in consumer electronics in the third quarter compared with the second quarter.

Oh-Hyun Kwon, president of Samsung's chip division, said that Samsung is not affected by slowing demand for PCs because it has diversified its products.

There is a lot of need for chips in tablets and smartphones will offset weakness in the PC market. However other outfits will not be so lucky.

Market research firm Gartner late last month reduced its forecast for PC shipment growth in the second half by about two percentage points to 15.3 per cent due to the uncertain economic outlook in the US and Western Europe.

But for the full year, Gartner expects worldwide PC shipments to rise 19 per cent to 367.8 million units from 308.3 million units in 2009. µ