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China Net Technology Limited reports: Memory chip industry is expected due to weak demand, particularly in DRAM prices to collapse, will lead to the global semiconductor equipment sales to decline further this year.

Chip manufacturers have to reduce the costs of layoffs and outsourcing of manufacturing operations to the foundry business. This was a direct result of the risk onto the chip foundry giant TSMC had a 30% reduction in expenditure this year, SMIC also become China's first halt production of DRAM foundry business enterprises, the first global semiconductor equipment manufacturers of the United States Material manufacturers will also look transferred to the field of solar energy equipment.

Global authoritative survey firm iSuppli said that as the deterioration of earnings, cash flow reduction, in 2008 the global DRAM makers equipment investment may be reduced by 50 per cent over the previous year, that is the case, the entire DRAM suppliers in the industry growth rate will slow down, is expected to improve In 2008 the second half of the supply-demand balance, can stabilize market prices.

At the same time, it also issued a warning, if the DRAM chip market continues to decline, DRAM buyers may face the risk of supply strand breaks, because some DRAM chip makers have experienced serious financial problems, may withdraw from the market.

In this time of the global DRAM market share of 30.2 percent of the first maker Samsung Electronics, but detonated think this is a good opportunity for industry reshuffle, Samsung Electronics this time, is intended to wear down the competitors with strong financial resources, Weak and small enterprises out of competition sequence.

Even Samsung Electronics, also faces product prices fell 64 per cent of the facts, Samsung Executive Vice President Zhu Yongxi but said: "We value that is a difficult period in the reserves the opportunity and hope that through generous investment and capacity expansion, enhance competitiveness Li, and the widening gap between the competitors. " (China Net Technology Limited)

"Samsung would like to take this opportunity to change the five giant hegemony of the situation, the completion of industry reshuffle. After this time, may be cleared 2-3 opponent." A senior industry analyst to this newspaper said. But he also believes that Samsung's desperate, but once the corresponding market demand, substantial investment, will undoubtedly provide more capacity in suicidal behaviour.

The first quarter of 2008, creating the world's top five DRAM manufacturers are not optimistic earnings reports.

Samsung Electronics sitting Toubajiaoyi the market share of 30.2 percent, as earnings reports, including the LCD and mobile phone manufacturing operations, even profitable, world second-ranked South Korean Hynix (Hynix) Semiconductor Limited loss of 677.4 million U.S. dollars, The market share of 18.6 percent, the third largest of Japan's Elpida Memory Co., Ltd. (Elpida Memory) warned its loss of market conditions than the estimate was nearly doubled up on February 28 in the second quarter , Finished fourth of the U.S. Micron Technology, Inc. (Micron Technology) net loss of 777 million U.S. dollars; fifth largest German company Qimonda (Qimonda AG), huge losses of 767.3 million U.S. dollars, is already huge losses for two consecutive quarters .

"In such a situation, Samsung Electronics this move, although able to increase market share and consolidate hegemony, but still can not make up for its DRAM business in the plight of poor earnings." Semiconductor industry well-known academics, industry commentators great Kang Pointed out.

At the same time, the second ranked Hynix also Buganjimo, prepared to declare closure of some production lines, cut costs and the price advantage to win orders.

May 9, iSuppli's report criticized Samsung Electronics and Hynix of conduct, are the two drivers drove as quickly as possible toward each other, is a dangerous game. "Or compromise, or perish together."(China Net Technology Limited)

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