( Reuters ) - Samsung Electronics beat expectations with a 12 percent rise in third-quarter operating profit thanks to strong demand for flat screens, but warned weak memory chip prices would fall further.
Samsung, the world's top memory chip maker, said the current global oversupply in computer chips was unlikely to be solved in the fourth quarter, and an executive predicted most DRAM manufacturers would post losses for current period.
Average prices of DRAM chips, widely used in personal computers, and NAND flash memory chips, used in digital cameras and portable music players such as Apple's iPod, could drop by around 15 percent in the fourth quarter, Samsung said.
Shares in Samsung, South Korea's biggest stock with a market value of about $89 billion, rose as much as 3 percent in early trade but were up just 0.4 percent at 557,000 won as of 0600 GMT.
"The outlook for the DRAM and NAND flash chip markets until early next year is bearish. Some analysts are bullish about the second half of 2008, but you never know what will happen," said Choi Yong-kyu, fund manager at IBK-SG Asset management.
While the chip picture is bleak, Samsung, also the world's top maker of large-size LCD screens, should continue to reap hefty profits from its flat screen division on tight supplies and surging demand for sleek computer monitors and thin TVs.