Samsung Warns Of DRAM Oversupply In 2011

Samsung has warned that there may be an oversupply of DRAM chips in 2011, if global demand for personal computers continues to fall.

The Korean consumer electronics manufacturer said that the company continues to manufacture dynamic random access memory (DRAM) and NAND chips at full scale as there is a strong demand for memory chips in tablet PCs and smartphone devices, even as PC demand falls.

“Samsung is not affected by slowing demand for PCs because we diversify our product portfolio. Strong demand for chips in tablets and smartphones will offset weakness in the PC market,” said Oh-Hyun Kwon, president of Samsung's chip division, during a conference in Taipei.

He added that the company plans to maintain its capital spending budget at $10 billion in 2010 for its chip division. However, the company has not charted out a spending plan for next year.

Samsung's warning comes when chip makers have increased chip production to deal with a sudden burst of demand from clients looking to tap in to the back-to-school and holiday shopping season for personal computers.