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Samsung expects chip demand to soar this year

Flash memory market growing, company says

SEOUL -- Samsung Electronics Co. yesterday offered a bullish outlook on the global semiconductor industry, with a top executive predicting increased demand for chips used in both digital devices and personal computers.

The market for NAND chips, used in digital music players, will rise 22 percent in 2006 to $13.5 billion from 2005 as companies release new products that use them, projected Hwang Chang-gyu, president of Samsung's semiconductor business.

``The NAND flash market has increased dramatically" since the release last year of Apple Computer Inc.'s iPod nano, Hwang told reporters. ``Many digital device makers are planning to introduce devices soon and the demand for NAND flash is expected to be very large in the second half."

NAND chips -- due to their ability to store data when power is switched off -- are widely used in consumer electronics such as MP3 players and digital cameras. The iPod nano, which utilizes flash memory, was one of last year's most popular digital products.

Samsung is the world's largest memory chip maker and a top producer of consumer electronics, including flat-screen televisions, mobile phone handsets, MP3 players, and laptop computers.

Also yesterday, Samsung unveiled a type of memory chip that it said will allow digital devices to work faster by saving new data more quickly.

The phase-change random access memory, or PRAM, is nonvolatile, meaning it will retain data even when an electronic device is turned off, and is about 30 times faster than conventional flash memory, Samsung said.

The company showed off a 512-megabit prototype at a press conference. It is expected to be available in 2008, Samsung said.

Currently, two types of nonvolatile flash memory chips -- NOR and NAND -- are widely used in electronic devices.

NOR chips are suitable for running software directly, but are slower and more expensive to manufacture. NAND chips are easier to make in larger capacities but are more suitable for big data files, such as MP3 music.

Regarding DRAM, or dynamic random access memory, chips used mostly for memory storage in personal computers, Hwang said demand has been strong this year and Samsung expects it to accelerate in the second half led by computer games and graphics.

Consumers typically purchase computers and other electronic devices ahead of the start of the school year in North America and year-end holiday shopping seasons, boosting sales at chip manufacturers.

The planned release of the Windows Vista operating system early next year will also provide a boost to DRAM chip demand, Hwang said.

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