UPDATE 2-Samsung Elec gains 3 pct on share buyback talk

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SEOUL, July 24 (Reuters) - Shares in Samsung Electronics (005930.KS) rose more than 3 percent on Thursday on talk the world's No.1 memory chip maker would announce a share buyback plan at Friday's scheduled quarterly results announcement.

"There is a good chance that Samsung Electronics will unveil share buyback plans tomorrow, as their share prices have suffered steep falls during the latest bearish run," said Suh Do-won, an analyst at Hanwha Securities.

Shares in Samsung, also the world's leading LCD display maker and No. 2 mobile phone manufacturer, had fallen more than 20 percent since mid-May as of Wednesday's closing.

They were up 3.8 percent to 609,000 won by 0423 GMT, leading the wider market's 1.9 percent gain.

"The buyback size will likely be around 1 trillion won ($991 million)," Suh added.

A Samsung spokesman said he was aware of the market talk, but declined to comment.

Market-watchers said a buy-back would be a positive for shares in South Korea's biggest company.

"Firstly, shares have fallen quite steeply so a buyback is good from both investors' and the company's standpoints. The company can buy its shares back more cheaply and make investors happy at the same time," said a fund manager who asked not to be named.