DRAM price hikes to propel Samsung profit past $2bn

Every $1 DRAM price rise equals $300m profit

Samsung today said that it expects rising DRAM prices to push its profits for the current fiscal year up to $2.5 billion. "The 64Mb DRAM price rose across $10 yesterday on the spot market and [that] would give a considerable boost to our profit for the coming period," a Samsung spokesman, James Chung, told the Reuters newsagency. Chung said the company expects its 1999 after-tax profit to be aorunf $2.3 billion, a near ninefold increase on last year's $266 million. "A $1 rise in the price usually raises our profit by about $300 million, said Chung. Samsung cited last July's power cut in Taiwan as the chief reason for the increase in DRAM prices -- it reduced the world DRAM supply by around two per cent at a time of much-increased demand. Samsung also believed moves to small fabrication processes have also limited supply. The higher prices are likely to continue for some time, said Chung -- in part due to ongoing demand for low-cost consumer PCs. Samsung controls 18.6 per cent of world DRAM market, and the company recently said it intends to spend nearly $3 billion to ensure its lead in the market continues. ® Related Stories Tax dodge investigators hit Samsung

Sponsored: 5 critical considerations for enterprise cloud backup