By Kim Yoo-chul
Staff Reporter

GIHEUNG, Gyeonggi Province - Samsung Electronics has raised its mid-term target for semiconductor revenue by 53.6 percent from $16.6 billion in 2009 to $25.5 billion in 2012.

"The global memory chip industry will rise 16 percent on average annually next year," Kwon Oh-hyun, the head of Samsung Electronics' chip business, said in a regular weekly management meeting Wednesday.

"The global memory chip industry has been realigned due to a years-long slump. As the industry's leader, Samsung is set to benefit most from the industry's recovery thanks to our technology advancements."

"Samsung will maintain between a 1- and 1.5-generation technology gap with our rivals in the DRAM segment, while we are planning to keep the six-month tech gap in the global NAND flash memory market."

Kwon said prices both for DRAM and NAND chips have been showing steady signs of stabilization since early this year and added that bigger competitors were reeling from a combined $25 billion in losses.

"Thanks to technology edges and a favorable market situation, Samsung will maintain the portion of high-density, high-performance and low-power chips between 60 and 70 percent of the total."

Kwon had remained cautious in painting the chip outlook for the whole of next year at a recent technology exhibition in South Korea early this month.

Market analysts said this stemmed from impressive quarterly reports among the world's leading electronics companies, increased hopes for a global recovery and stabilizing chip prices.

Chip Shortage

In line with such optimism, Samsung is expecting shortages in both DRAM and NAND flash chips next year.

"Samsung forecasts a slight shortage in the memory chip industry because of the rising demand for high-end mobile phones and personal PCs," the top executive said.

"The global mobile phone industry will increase between 6.7 percent and 8.3 percent in 2010."

DRAM chips are widely used in traditional PCs, while NAND flash memory chips mainly go into high-end portable devices such as smartphones and car navigation systems.

Chip prices are highly susceptible to the economic curve.

If global economies go into a downturn, chip prices fall as consumers pull back from buying newer electronics gadgets. The opposite scenario works amid signs of economic recovery.

Hopes have grown for the world's leading chipmakers as Microsoft's new operating system, Windows 7, may boost chip demand, capitalizing on profitable corporate clients.

Samsung is also aggressively pushing its smartphone-related portfolio as such devices which offer Internet Web browsing and other high-end functions are gaining steady popularity from consumers in some advanced markets.

Research firm iSuppli said global semiconductor revenue is set to contract by 16.5 percent in 2009 but will rise 13.8 percent in 2010.

yckim@koreatimes.co.kr