Taipei, Oct. 28, 2008 (CENS)--Affected by the global financial fallout, demand for DRAM has continued languishing worldwide, making Korea-based Samsung Electronics, the leading supplier in the sector, pessimistically forecast global DRAM prices to keep falling 30% next year, according to industry sources.

Samsung noted that sales slowdowns in both PC and motherboard markets will undoubtedly weaken demand for DRAM worldwide in the fourth quarter of this year and continuously hurt global DRAM prices, despite a seasonal boom in the sector.

Samsung added that although global shipment of DRAM is expected to sharply grow by 45% next year, however, the most recent factors imply that global DRAM prices will very likely continue dropping by 30% in the year. The firm has cut its annual growth projection for DRAM shipment to the range of 66% and 69% for next year from originally 90%.

In addition to Samsung, Taiwanese large-sized DRAM maker Nanya Technology Corp. has also pessimistically looked at the market, expecting contract prices of 1Gb DDRII probably to hit below US$1 per units in the fourth quarter of the year.

Yiin Chii-ming, Minister of MOEA, said that Taiwan`s 4 DRAM makers, namely Nanya Technology, Powerchip Semiconductor Corp., Inotera Memory Inc. and ProMOS Technologies Inc, are all smaller than their Korean counterparts in productivity capacity and organizational size, adding that the best solution to overcome the tough time is via mergers.

Institutional investors indicated that the four Taiwanese makers have totally suffered operating losses of NT$88 billion over the past three quarters of this year, and they are very likely to see fourth-quarter losses exceed NT$30 billion. Hence, it is urgent for them to consider mergers.

In fact, quite a few insiders worldwide, including Hynix, Elpida, Powerchip, Nanya technology, Inotera Memory, and ProMos, have all moved to cut capacity by 15-20%. However, the moves have not been that helpful to buffer against the worsening market, according to Samsung.

(by Steve Chuang)