Asian memory chipmakers are expected to post another set of quarterly losses soon, on weak consumer demand for personal computers and electronics - yet signs point to steady improvements over the remainder of the year.

The downturn, which started in early 2007 and was compounded last year by the global economic slump, has claimed a heavy price from every manufacturer and has triggered a wide-ranging restructuring process in the industry.

But analysts now appear to see a faint light at the end of the tunnel.

$quot;The long down-cycle in the semiconductor industry may be coming to and end,$quot; Peter Yu, an Analyst at BNP Paribas is quoted as saying.

$quot;After inching up in the second quarter, chip prices should show more sustainable improvements in the third.$quot;

After several quarters of brisk overproduction, cash-starved companies finally slashed their total output and some balance is returning to the market for dynamic random access memory (DRAM) chips, widely used in personal computers.

Cautious optimism also surrounds the market for NAND flash chips, used to store memory in cameras, cell phones and digital music players. A shortage due to output cuts has boosted prices by 70-80% since the rock-bottom experienced in December 2008.

Sunnier skies?
While all its competitors are still expected to post steep net losses for the January-March quarter, market leader Samsung Electronics will be the lone memory maker to report a profit, thanks to its robust handset business, analysts suggest.

Samsung’s semiconductor business is expected to post an operating loss margin in the 5-7% range, from a dismal 14% loss margin in the previous quarter. Several analysts predict the unit may turn profitable again as early as in the second quarter.

While skies are turning sunnier for Samsung, the mood remains pessimistic.

The semiconductor industry has long been a growth driver for the industrial and specialty gases business, while the photovoltaics (PV) sector has been rapidly emerging as a major consumer of gases.

More than 20 different gases are known to be used in semiconductor manufacture, a process which involves more than five hundred steps, with electronic gases, specialty gases and others such as nitrogen, argon, helium and hydrogen all used in some capacity.

Technology is also provided in addition to gas supply. Only last year, Air Products revealed it had introduced its new XeCovery onsite xenon recovery service for the semiconductor and MEMS industries – offering cost-effective benefits for manufacturers facing ever-rising prices.

In terms of the PV market, it’s not so much a case of ever-rising prices at the moment.

Reports from research firm iSuppli Corp. suggest worldwide installations of PV systems will fall 32% from 5.2GW in 2008 to 3.5GW in 2009, while generated revenues are expected to drop too.

A 12% decrease in average price per solar watt is expected to lead to revenue generated by PV system installations plunging by 40.2%, from $30.5bn in 2008 to $18.2bn.

The situation of over-production, coupled with declining demand, could lead to a sharp fall in PV revenues this year – though it’s also thought that the market downturn could prove beneficial in the long term, as industry excesses reduce and a more mature supply chain develops.

Growth is expected to return in 2010.