July 7: South Korean stock investors dumped semiconductor shares after the government, on Monday, issued a gloomy outlook for exports following a plunge in microchip prices in the US spot market. The Finance and Economy ministry said that prospects for semiconductor exports were shaky because of the low international price of South Korea's mainstream 16-meg, a dynamic random memory chips (DRAMs).

The 16-mega DRAM price slid to below seven US dollars per unit this week in the US spot market, despite a desperate push by South Korean chip makers to prop up the price through a series of cuts in production. The government's outlook sent electronics shares tumbling.

Samsung Electronics, one of the world's largest chip producers, led the drops in core blue chips, falling 1,200 Won in the morning session to 70,800 Won, dealers said. ``Local institutions were the main sellers of semiconductors amid concerns over falling chip prices overseas, spilling negative sentiment to other blue chips,'' a Coryo Securities dealer told AFX-Asia, an AFP-affiliated Financial news wire.

Memory chip prices in the US spot market shot up to 10 dollars in March but declined gradually afterwards, dampening hopes here that the international chip market would recover in the second half of this year. Ministry officials said South Korean chip exports would not pick up in the second-half because prices in the US spot market indicate the trend of export prices a few months later.

The gloomy government forecast followed an outlook last week by the Federation of Korean Industries, which predicted that South Korean semiconductor exports would rise 49.2 percent in the second half.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.