Sony says to cut back sharply on chip spending
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Sony Corp.  will cut back on  future chip spending and may not produce advanced "cell"  microchips used in its PlayStation 3 (PS3) game gear in-house  as it seeks better returns on its investments, a senior  executive said on Tuesday.
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(InfoWorld) - Falling prices for DRAM chips and microprocessors badly hurt the global semiconductor market, which will likely limp to a sales increase of just 2.5 percent in 2007, according to an analyst report released Thursday. Semiconductor sales were originally expected to rise by 6.4 percent over 2006 levels, according to the study from Gartner. But chip sales in the first quarter of 2007 were more than 5 percent lower than in the fourth quarter of 2006, leading the research company to cut its 2007 market revenue forecast to $269.2 billion. The numbers reflect a continuingÂ price war between Intel and Advanced Micro DevicesÂ (AMD), as the processor vendors struggle for market share. That war has already taken a toll on AMD, which blamed slow chip sales for itsÂ $611 million lossÂ in the first quarter of 2007. Intel, a much larger company, has continued to post profitable quarters, but on May 2 addedÂ another 1,000 layoffsÂ to a corporate reorganization it began in 2006. Conditions areÂ worst of all in the DRAM sectorÂ of the industry, which will see its revenue drop 11.1 percent in 2007 to $30.5 billion, then limp to a smaller decline in 2008, according to Richard Gordon, research vice president at Gartner. The forecast could spell trouble for Samsung Electronics, the world's largest producer of DRAM and NAND flash. However,Â Samsung's pain may be dulledÂ if tumbling chip prices attract consumers into stores, as prices for end-user products using NAND flash memory like PCs, iPods and digital cameras are also expected to drop. In the long run, chip prices will continue to fall throughout 2007 as semiconductor manufacturers try to clear excess chips out of their warehouses, Gordon said. Chip manufacturers do have some cause for optimism, however, as they have already begun to control that inventory by cutting production. If that effort succeeds, the industry could return to modest growth of 8.7 percent in 2008 and 7.2 percent in 2009, he added. Â
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The two-year effort will reduce its work force by 10 percent and cut $5 billion in costs. Analysts see measures as essential to compete against Advanced Micro Devices.
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Electronics giant Sony cuts its operating profit target for this business year by almost a third, blaming falling product prices.
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Sony Corp. is removing a chip from the  European version of its new PlayStation 3 (PS3) game console, a  move that cuts costs but means users cannot play some of their  old games.
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Electronics retailer trims guidance as Americans curb spending.
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TOKYO -- Sony's U.S. video-game unit is cutting jobs to become more competitive, the company said Thursday, as the PlayStation 3 machine struggles against rival offerings from Microsoft and Nintendo.
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Sony Corp. is removing a chip from the European version of its new PlayStation 3 (PS3) game console, a move that cuts costs but means users cannot play some of their old games.
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Sony Corp.  plans to lower the production cost of its PlayStation 3 (PS3) game consoles by using less expensive chips, aiming to turn the operations profitable between September and next March, the Nikkei business daily reported on Friday.
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Sony Corp  will sell its  production facilities for making key microchips used in its  PlayStation 3 game console to Toshiba Corp , pulling  back from the heavy investment needed.
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Texas Instruments Inc , the  biggest maker of chips for mobile phones, on Monday reduced its  fourth-quarter earnings outlook on lower-than-expected chip  revenue.
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Sony Corp. on Thursday cut the price of its PlayStation 3 game console in the U.S. and announced an even cheaper model that will arrive before the holiday shopping season.
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Sony Corp  said on Wednesday it will sell its microchip production facilities in western Japan to Toshiba Corp  for 90 billion yen ($835 million), in their latest move to focus on their core businesses.
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Sony Corp. said on Friday it will  eliminate a key microchip from the European version of its  PlayStation 3 (PS3) game console, reducing production costs as  well as its compatibility with PS2 games.
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Price cuts for the PlayStation 3 video game console are among the factors Sony is studying as it seeks to break even in its money-losing gaming business next fiscal year, a company executive said Wednesday.
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National Semiconductor Corp., which makes analog chips used in cell phones, computers and televisions, said Thursday it is cutting about 550 jobs, or about 6 percent of its global work force, as it copes with an inventory buildup and lower demand.
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Global sales of chip equipment are expected to fall 5.2 percent next year, an industry group said Wednesday in a sharp reversal of its midyear forecast of 24 percent growth.