Taiwan's exports slumped by a record 41.9% in December on weaker demand from the US and China for laptops, mobile phones and computer chips.

Nanya Technology, Taiwan's No. 2 DRAM chip maker, said on Wednesday it plans to raise the contract price of its chips by 10% in January from the level in late December.

Hynix Semiconductor, the world's No. 2 maker of computer memory chips, is set to raise $249 million in a new share issue this month under a shareholder-led support package, an executive said on Tuesday.

A slowdown in technology node migrations at the major DRAM producers is adding to the expected capital expenditure cuts manufacturing as companies struggle to combat increasing losses and preserve cash, according to the latest report from DRAMeXchange. The spending cuts are a direct result of the combined DRAM industry losing approximately US$8 billion in 2008.

Samsung Electronics denied a report saying it may cut its 2009 investment in semiconductors by more than half from last year amid a lingering downturn. "At this point, we have not made any decisions on our investment plan, and even if we had a plan it would be contingent on different economic scenarios that will be possible during this year," Chu-Woo-sik, Samsung's executive vice president of investor relations, told Reuters.

Computer-chip manufacturer Qimonda Ag said it is taking steps to meet the New York Stock Exchange's market-capitalization standard and increase the price of its American depositary shares to above US$1 to remain listed on the bourse. Qimonda's US-listed shares lost 2.6% in after-hours trading.

Wachovia Capital Markets analyst David Wong said Micron should take action to raise cash over the next two to three quarters. The Boise, Idaho, maker of semiconductor devices had US$1.03 billion in cash and short-term investments and US$2.9 billion in debt at the end of its fiscal 2009 first quarter, ended Dec. 4, according to Wong.

Elpida is talking with Powerchip, Rexchip Electronics and ProMOS Technologies, Yukio Sakamoto, chief executive officer of Tokyo-based Elpida, said in a Bloomberg interview on Dec. 26, without elaborating on details of the negotiations. The four companies combined would challenge Samsung Electronics as the world’s biggest producer.

Hynix Semiconductor said on Wednesday it would cut planned spending on a South Korean plant and delay a $260 million investment in its Chinese joint venture as it tries to deal with a cash shortage amid a downturn. Hynix shares slid 12.7% to end at 6,720 won before the announcement, compared with the wider market's 1.4% loss.

Shares of Micron Technology are on the move today, rising 25%, on word rival Hynix Semiconductor will cut memory chip production by 20%-30% at the end of this month due to weak prices and demand.

"We are taking advantage of the company-wide vacation period starting in late December to achieve the cuts," a Hynix spokeswoman told Reuters. "We will reevaluate our decision early next year depending on the market situation."

"We deeply regret that the state of Saxony has not taken our proposals into account," says Peter Bauer, CEO of Infineon Technologies AG. "In spite of the extremely difficult situation of the world market and the semiconductor industry, Infineon has offered to provide a loan in combination with the sale of a substantial package of Qimonda shares to the state of Saxony. This offer represents the largest possible burden we can reasonably take on."

DRAM ASPs (average selling prices) will climb significantly in 2010 on high demand and lower supply, according to the 2009 edition of IC Insights' McClean Report, to be released next month. This jump in prices will once again give the DRAM producer renewed confidence, leading to moderate increases in DRAM spending in 2010 and big DRAM capital expenditure increases in 2011.

Saxony will lend 150 million euros (US$205 million) to Qimonda AG, which will be matched by a capital increase from parent company Infineon Technologies AG.

Leading shareholders of Hynix Semiconductor denied on Friday market talk the firm's capital could be reduced, boosting its shares, although persisting concerns over the sector outlook limited gains.

Chip maker Cypress Semiconductor said late Friday that the US Department of Justice has closed its investigation into in a global price-fixing scheme involving a form of computer memory.

Kim Jong-kap, CEO of the world's No. 2 memory chip maker, told the evening newspaper, Munhwa Ilbo, that the global semiconductor industry would face a big change such as a closure of a rival chipmaker by the first quarter of 2009.

Qimonda AG hopes to soon strike a deal to research chip technology with the German state of Saxony, where its main chip factories are located, a company representative said.

Shares in Hynix Semiconductor rose sharply on Wednesday on expectations of an imminent US$560 million in funding from shareholders, which analysts said would help keep the chip maker afloat for a while.

Samsung Electronics, the world's largest maker of memory chips and LCD panels and TVs, says the global recession is wiping out profits at those businesses in the fourth quarter.

Yesterday Lee Youn-ho, South Korea's minister of knowledge and economy, said that creditors had almost agreed on support measures for the world's second largest chipmaker. "At the moment, the government is not considering direct support [for Hynix] because shareholders have agreed on providing liquidity to some extent," Mr Lee told foreign correspondents. "But if creditors can't help out Hynix, then the government may look into it."

Hynix Semiconductor has sought 1 trillion won ($691 million) in financial support from its creditors as it faces a liquidity crunch and struggles as chip prices are falling, reports say.

"The electronics group Hynix was already rescued once by the South Korean state bank and now has emerged as interested in Qimonda." Asked about the comment, a Hynix spokeswoman in South Korea denied any interest in Infineon or Qimonda assets.

The world's second-biggest maker of memory chips will eliminate 30 percent of its executives and cut labor costs by more than 15 percent because of the global economic slowdown.

Hynix Semiconductor is facing a cash crisis as losses deepened to over 1.4 trillion won in 2008. The Korean Government support via Korean banks mirrors the potential intervention of the Taiwan Government in facilitating further credit instruments for Taiwan’s struggling DRAM manufacturers.

"We will discuss with our controlling shareholders to decide on a loan if necessary," Park Hyun, a spokesman for Ichon, South Korea-based Hynix, said by telephone Monday. Park said details such as the amount, timing and method haven't been determined.

Taiwan stocks rose 0.15 percent on Friday to a more than two-week closing high, as DRAM makers such as Powerchip surged after saying Japanese rival Elpida would boost its stake in their joint venture. DRAM chip makers surged, with Powerchip and Nanya Technology both up by their 7 percent daily limit, helping lift the electronics sub-index by 0.63 percent.

"Certainly we wouldn't abandon this industry" in Taiwan, which accounts for about 30 percent of global supplies, Siew said yesterday at an American Chamber of Commerce meeting in Taipei, when asked what the government would do to support the dynamic random access memory (DRAM) market. "We should take this opportunity to consolidate the industry to become more competitive," he said.

The Nikkei business daily said Elpida, the world's No. 3 maker of dynamic random access memory, will need to spend about 4 billion yen ($42 million) to raise its stake in Rexchip Electronics.

Amid a downturn in DRAMs, Samsung Electronics remains the top supplier in the arena, according to the new rankings from Gartner. In terms of sales, Samsung was the world's largest DRAM maker in the third quarter of 2008, followed by in order Hynix, Elpida, Qimonda, Micron, Nanya, Powerchip and ProMOS, according to the rankings. Germany's Qimonda AG gained share and took fourth place, surpassing Micron. But Qimonda's fortunes could be short lived.

Germany's state of Saxony and Infineon's loss-making unit Qimonda are in talks about a possible rescue plan, a spokesman for Saxony's Economics Ministry said on Monday. A company spokesman declined to comment on the report but said Qimonda and the state in eastern Germany were in constant contact. Qimonda runs a production plant in Dresden -- the capital of Saxony.

...financial institutions will be allowed to loan a total of NT$600 billion to businesses under the program, which runs until 2010. Sources have suggested that the government should be more audacious in trying to raise funds to stimulate industry and public construction.

DRAM makers have been cutting back their production in two waves already, but the economic downturn and reduced demand appears to make the situation even worse. DRAMeXchange said that it expects the industry to cut production by another 6% or 70,000 12” wafers in December, with more announcements possible in January.

Leading vendors are diversifying their product lines, driving down operating costs and improving production efficiencies to mitigate ongoing problems in the mainstream DRAM industry. Manufacturers are putting renewed priority on developing more power-efficient parts. Meanwhile, DRAM manufacturers continue to push the process envelope to higher densities.

PRAM, known as perfect RAM, is the next-generation memory chip which features the advantages of NAND and NOR flash memories. Samsung will begin mass production of 65-nano 512MB PRAM in the first half of 2009 for the first time in the world.

Taiwan announced measures to loosen loan and payment conditions on Monday to help the island's loss-making DRAM memory chip makers. Three major DRAM makers in Taiwan -- Powerchip, Nanya Technology and ProMOS -- are struggling with falling chip prices caused by oversupply. They have been in the red in the past several quarters.

SanDisk has been hurt by falling prices for NAND memory chips, a type of flash memory the company makes for consumer gadgets like music players and digital cameras. But a Goldman Sachs analyst said key intellectual property rights associated with the chips give the SanDisk more value than the market has recognized.

Hynix Semiconductor, the world's second biggest chipmaker behind Samsung Electronics, said it expects prices of computer memory chips to decline by about 30% in 2009, and prices of NAND flash memory chips to fall 40% further from this year. "The slowdown in both personal computer and motherboard sales will weaken the demand for DRAMs, which will hurt prices," a Hynix executive told The Korea Times, Wednesday.