Samsung's Chip Business: What Happened?

A DRAM glut and nimbler rivals will clobber profits for the Korean giant this year. Can it bounce back?

Just six months ago, life seemed so good at Samsung Electronics' (SSNGY) semiconductor unit that the division's chief declared it would no longer be subject to the industry's notorious boom-and-bust cycles. Hwang Chang Gyu, who has presided over Samsung's chip business since January, 2004, argued that explosive growth in demand for memory chips for use in mobile phones, music players, and other consumer products had changed the industry's dynamics.

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