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Last Updated: Monday, 20 September, 2004, 06:53 GMT 07:53 UK
Samsung sees chip sales slowing
Chip plant
More and more chips are being produced
Growth in chip sales is set to halve next year due to a glut in the market, Korean chipmaker Samsung has warned.

The firm said memory chips were in for a slowdown, with prices for flash memory set to fall as much as 40% in the three months to September.

The news echoes previous gyrations in the chip market, which often swings from glut to dearth and back.

Samsung's warning came as it announced that it expected an increase in sales in the third quarter.

Samsung Electronics semiconductor business's president, Hwang Chang-gyu, told reporters that sales would probably exceed the $3.2bn (1.8bn) seen in the three months to June.

Overall, he said, chip sales growth would slow to 10% a year in 2005 from 20% this year.

But the memory chip market, particularly for the flash memory chips vital in small devices such as mobile phones, was set to slump to 5% growth from 60% in 2004.

Hynix troubles

Meanwhile, Samsung competitor Hynix is being investigated for alleged accounting fraud and could face a fine, it was revealed.

Hynix, which is the fourth-largest memory chipmaker in the world, was accused by Korea's Financial Supervisory Service of whether it mis-stated its accounts to the tune of almost 2 trillion won ($1.7bn; 970m) in 1999.

Since then the firm - which is 81% owned by its creditors thanks to huge debts, and made a 625bn won profit in the three months to June - has cleaned up its books, the FSS said.

"We are investigating how much Hynix secured loans using false accounting, and whether it supported its affiliates unfairly or embezzled corporate money," a prosecutor told reporters.

Hynix said it had corrected all the "controversial" items, and blamed its former management for the situation.


SEE ALSO:
Intel gloom weighs on chip stocks
02 Sep 04  |  Business
Surging chip prices boost Hynix
26 Jul 04  |  Business
Samsung continues profits drive
16 Jul 04  |  Business


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