UBS cut its earnings forecasts and share target prices for South Korean chip makers Samsung Electronics and Hynix Semiconductor Inc., citing bigger-than-expected price declines for DRAM memory chips.
UBS said its move comes after it cut global DRAM revenue forecasts due to excess supply, adding it expected a more difficult third quarter for makers of the computer memory chips in separate reports dated on Monday.
The investment bank said it would lower its 2007 net income forecast for Samsung Electronics Co. Ltd. by 6.9 percent to 8.3 trillion won ($8.95 billion) and its 2008 estimate by 4.6 percent to 10.4 trillion won.
UBS also cut its share target price on Samsung to 670,000 won from 690,000 won. Shares in the world's biggest maker of memory chips were up 0.7 percent to 578,000 won by 0047 GMT, following tame U.S. inflation data.
UBS cut Hynix Semiconductor Inc. to neutral from buy, while slashing its 2007 net income forecast by 17.5 percent to 1.6 trillion won and its 2008 estimate by 2.1 percent to 2.25 trillion won.
The investment bank also lowered its target price on the stock to 35,000 won from 39,000 won. Hynix shares were up 0.82 percent at 30,850 won.