LG Semiconductor and Samsung Electronics, the biggest Korean semiconductor firms, have shown severely reduced profits for the first half of this year.
That follows a slump in demand for 16Mb parts, compounded by a decision from the Korean government earlier this year to restrict export quotas on the chips.
Samsung's net profit for the first half of this year dropped by an alarming 73 per cent to 123.2 billion Won while LG's profits fell by 88 per cent to 16 billion Won.
But Samsung's sales were helped by a surge in sales of telecomms equipment in its home market.
Nevertheless, observers said that the DRAM manufactured by Samsung is the "bread and butter" which allows it to diversify into other manufacturing and electronics areas.
Earlier this week, UK memory distributor Datrontech predicted that 16Mb parts would disappear from the market in three month's time. Samsung is betting that 64-megabit Dram will help it to recover its position in the market.
Nevertheless, the whole memory market remains in turmoil. Synchronous memory, used in Pentium II systems, is in short supply, while Rambus memory is set to supersede synchronous memory some time next year.
Intel and Samsung have set up a joint development unit in Austin, Texas, to cooperate on future memory developments.
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