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New York: Investors looking to bet on the global chip industry may want to put their money in fast-growing analogue chips, with the downtrodden computer memory market poised for only a modest recovery this year.
Prices for flash memory chips used in portable devices appear to be stabilising, but executives at the Reuters Global Technology, Media and Telecoms Summit said they were less certain of the timing of a recovery in that sector.
"I'm kind of worried about flash," said Hiroshi Suzuki, chief executive of Japan's Hoya Corp, which makes photomasks used to copy electronic circuit patterns onto semiconductors.
"For DRAM, I think we probably saw the bottom already. It looks like the flash supply capacity equation is actually worse than the DRAM side," Suzuki said at the Tokyo summit.
Analysts expect global sales of dynamic random access memory, or DRAM, mainly used in computers and increasingly in cutting-edge mobile phones, to fall by 10 per cent this year before growing by about 20 per cent in 2009.
Top DRAM suppliers Samsung Electronics Co and Hynix Semiconductor have seen prices rebound since April, leading industry executives to expect a return to a balance between supply and demand sometime in the second half of the year.
"The DRAM industry has been in the last couple of quarters going through a dramatic price decline. It's simply [that] there was too much supply in the market," said Kin Wah Loh, the chief executive of Qimonda, the world's fourth-largest maker of computer memory chips.
"We are seeing now the effect of this reduction in supply and that is a good sign," Kin said in Tokyo. "It's really a matter of time, technology and supply. Going forward in the second half the supply will be more balanced."
Japan's Toshiba, whose semiconductor business posted an 80 per cent plunge in operating profit in January-March, said it expected the price of NAND flash chips, used in portable gadgets like Apple's iPod, to be flat this quarter.
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