"I see some oversupply [in the second half]," he said. DRAM output will increase 25 per cent in the fourth quarter from the third, he said.
But DRAM chip prices will remain at profitable levels for companies, he noted.
The main difference between IDC and other research groups is its focus on the potential impact of the global recession. Some government stimulus packages put in place early in the recession will end soon, which could lead to a slackening of demand. Job losses have also remained a problem in many parts of the world, which could mute end demand. Still, the research firm predicts the chip industry will post a strong rebound this year.
"I think the recovery will continue to be very gradual," said Morales.
(IDC is part of IDG, the company that operates IDG News Service.)
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