Samsung: Memory, LCD prices to drop; sales to rise

World's largest memory maker predicts that DRAM and flat-screen shipments will offset price reductions.

Samsung says prices on many of its largest products will decline significantly next year, countered by higher volumes.

In a conference call with analysts and investors this week, Samsung, the world's largest memory maker, predicted that prices of DRAM, the memory used in PCs and servers, would decline 30 percent next year. But because manufacturers are putting more memory into their machines, demand could grow by 44 percent, alleviating many of the adverse effects associated with falling prices, the company said.

DDR2 DRAM, a new, more expensive version of DRAM, will also become a mainstream product by the middle of the year, potentially raising margins, Samsung predicted.

The "half empty, half full" theme is one that will likely extend across Samsung's product lines. In the first two quarters of this year, the company experienced escalating profits because of high demand for LCD TVs and other products. Supply, however, caught up with demand in the second half and turned shortages into excess inventories. Since then, Samsung has seen shipments grow, but increases have been met with price declines.

Similarly, the company said demand for large LCD panels, the glass used to make thin monitors and LCD TVs, would increase by 30 percent, with the LCD panels made for LCD TVs growing by 77 percent. On the downside, prices will continue to decline.

Yong-young Kim of ZDNet Korea reported from Seoul.