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Samsung goes mad on memory chips

Can SRAM and flash memory save its bacon?

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Samsung has set itself the target of becoming the world's second biggest semiconductor maker in the global market by 2005, up from its current position of fourth.

The Korean giant aims to raise its share of the overall memory chip market (DRAM, SRAM, flash, etc.) to 30 per cent, targeting $20 billion in sales for this segment by this time (in 2000 it had a 17 per cent share).

This announcement comes at one of the toughest times the memory market has ever seen. The market share prediction could be achievable, especially if rivals falter. But it is difficult to see how Samsung will hit the sales numbers.

According to a recent Gartner survey, DRAM sales peaked in 1995 at $41.8 billion; 2000 saw numbers of $31.5 billion; 2001 is predicted to come in at a miserable $10.5 billion; and 2002 will decline a further 19 per cent to around $8.5 billion.

As part of its plan for achieving these lofty goals, Samsung will change the focus of its memory production, while moving to the 0.12-micron process (it currently uses 0.15-micron). There is already a 512MB DDR SDRAM product on this platform, which it says will assist it in "widening the gap between Samsung and other competitors," the company claims in a statement.

The production switch comes in the form of a reduction in DRAM (currently the fat kid that the market likes to whip) and an increase in SRAM and flash memory output. By 2005, the latter segment will account for 50 per cent of its memory business, while DRAM will only be 25 per cent.

Even so, the numbers struggle to tally up. Samsung wants to grab 30 per cent of the memory pie, which it hopes will equate to $20 billion in sales - meaning a total memory market in the region of $66 billion by 2005.

While no one likes to predict the memory market due to its volatility, Gartner's principal analyst for memory, Richard Gordon, says his outlook on 2005 pegs the market at only $36 billion. In 2000 it recorded $54.4 billion, while 2001 should see that shrink to £27.5 billion, according to Gordon's latest figures. ®

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