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SKorea's Samsung Elec says Q4 outlook positive on strong global IT demand

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SEOUL (AFX) - Samsung Electronics Co Ltd said it expects to continue achieving solid results in the fourth quarter, backed by robust worldwide demand for most of its major products, including chips, LCD products and handsets.

"Samsung Electronics anticipates positive fourth-quarter results as demand for IT products tends to surge in the year end period," investor relations head Chu Woo-Sok said.

The semiconductor business is expected to enjoy a surge in demand for chips in the fourth quarter, driven by higher sales of PCs and mobile equipment, which should compensate for expected weakness in chip prices.

DRAM chip prices are seen dropping less than five pct by the end of this year, it said.

The company noted that its successful migration to finer process technologies in both DRAM and NAND Flash products will continue to help reduce manufacturing costs and boost profitability.

Samsung currently produces DRAM chips on the 80 nanometer and 90nm processes, and the company has recently finished developing a 512Mbit DDR2 memory device on a 70 nm process.

Yields per wafer at 70 nm will be 100 pct higher than those using 90 nm technology.

In the LCD business, Samsung expects global demand to grow 7 pct in the fourth quarter from the third quarter on seasonal sales of TVs, notebook computers, and computer monitors. As a result, tight supply conditions will continue.

Sales of its large panels are expected to expand by nine pct from the third quarter to 13.1 mln sheets in the fourth quarter, with TV panels surging 29 pct and notebook panels jumping 21 pct.

The full ramp-up of S-LCD, a joint venture with Sony Corp, will help Samsung secure higher global market share and further strengthen its price competitiveness in large TV panels 32 inches and above.

Fourth-quarter handset sales are expected to remain similar to the third quarter, even with the usual year-end inventory write-offs.

Samsung upgraded its forecast of this year's global handset market to 760 mln units from 720 mln, citing sharper-than-expected growth in replacement demand in Europe and North America, where third-generation wireless services are becoming popular.

In order to cope with an increasingly competitive global handset market, especially at the low-end to medium-priced segment. Samsung said that it will continue to focus on the high-end, premium handset sector.

The company expects stronger average selling prices in the fourth quarter with the launch of new premium products such as D600 and 3G phones.

The digital media business is expected to benefit from strong seasonal demand, accelerated by a recovery in domestic consumption, it said.

For the home appliance division, the company said that it will expand the output at its overseas operations to improve profitability.

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