Samsung, Hynix rally as Intel results boost hopes

SEOUL (Reuters) - Shares in the world's top two memory chip makers, Samsung Electronics (005930.KS) and Hynix Semiconductor (000660.KS), jumped early Wednesday, boosted by Intel's (INTC.O) forecast-beating results and outlook.

The strong earnings at Intel, the world's biggest maker of semiconductors, added to growing confidence that the battered chip sector is recovering after going through a steep and lengthy slump.

Samsung rose by nearly 5 percent at one point, hitting its highest level in more than a year, and Hynix gained as much as 3 percent. Both companies are set to report quarterly earnings on July 24.

In Taiwan, the world's No. 3 PC brand Acer (2353.TW) rose more than 2 percent at the open as investors bet that strong growth in Intel's Atom chip could bode well for Acer's line of low-cost netbook PCs.

Intel's results and outlook blew past Wall Street forecasts on better-than-expected consumer demand for PCs, especially in Asia, although the corporate market remained weak. Intel also said revenues from the low-cost, low-power Atom processor soared 65 percent from the first quarter to $362 million (221.8 million pounds).

"It comes as a positive signal to memory chip makers, as evidence the industry is turning around," said Suh Do-won, an analyst at Hanwha Securities.

Analysts say the worst is likely over for the memory chip industry, which has been ravaged by two and a half years of low demand and plummeting prices. The market for dynamic random access memory (DRAM) chips, used mainly in PCs, has stabilised and Samsung's semiconductor division is set to swing to a profit for the April-June quarter.

Hynix, the No. 2 DRAM maker behind Samsung, should post a smaller loss and could even turn a profit later this year.

At 1:53 a.m. British time, Samsung shares rose 4.1 percent to 660,000 won and Hynix was up 2.4 percent at 15,100 won, leading the wider market's 2 percent gain.

(Reporting by Rhee So-eui and Jungyoun Park in SEOUL; Kelvin Soh in TAIPEI; Editing by Jonathan Hopfner)