`Falling Stock Prices Not Sign of Downturn in Chip Industry'

Article excerpt

Stock prices may be spiraling down but experts believe that the boom in the semiconductor industry is by no means over and should continue through the year 2002.

One analyst of Samsung Securities said yesterday that the falling stock prices of semiconductor issues both here and in the United States is simply a matter of internal supply and demand.

``There are voices of concern that the semiconductor industry is losing steam but this is certainly not the case if global market trends are any indication,'' he said.

The analyst said much of the fall in the prices of chip issues, including Samsung Electronics, which fell below 300,000 won yesterday morning, is psychological and does not properly reflect these market trends.

Because of the firm belief that the semiconductor market will remain strong over the next couple of years, securities companies have been holding back from adjusting their target prices for companies like Samsung Electronics and Hyundai Electronics Industries.

`In the middle of the 1990s, the entry of Taiwanese companies into the DRAM (dynamic random access memory) market created a supply glut in the market, thus causing prices to crash.

``Right now, none of these negative factors are evident in the market and we believe that the rational prices for Samsung and HEI will hover at 600,000 and 41,000 won respectively over the next 12 months,'' the analyst said. …