ON WEDNESDAY, CHINA’S largest chipmaker Semiconductor Manufacturing International Corp (SMIC) said that it would no longer be producing DRAM (dynamic random access memory), and would instead focus its attention on other, more lucrative logic chips.

The DRAM market has been taking quite a beating lately, with the worst slump since 2001, and prices for the memory chips dropping a staggering 60 per cent in the last year alone.

After suffering a net loss of $119.1 million, down from a net profit of $8.8 million a year earlier, SMIC decided that enough was enough, and that it was time to cut its losses with the DRAM albatross around it’s neck. $44.5 million of the loss had come directly from provisions taken against SMIC’s remaining DRAM inventories, according to the company.

The Chinese chipmakers were also down by 6.7 per cent in revenues to a disappointing $362.4 million from US$388.3 million. The company was not optimistic about it’s next quarter, either, predicting that its revenue would drop by a further 3-6 per cent in Q2.

In order to save itself from financial disaster, SMIC revealed that it has been in discussions with a strategic investor, in order to sell off a " significant" stake in itself. It is as of yet unknown who this strategic investor might be, or how much the deal is worth.

Meanwhile in Taiwan, TSMC, which is one of the world’s biggest contract chipmakers, has said that it will be expanding it’s Micro-Electro Mechanical Systems (MEMS) foundry business. Tech-On claims that the firm will be aiming to provide better manufacturing services like surface micromachining and CMOS-MEMS integration and packaging. Unlike the DRAM market, the MEMS sector is growing and turning profit, already estimated at around $5.95 billion in 2007, analysts are predicting that it will reach $10.771 billion by 2011.µ

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