TAIPEI - Foxconn Group's Hon Hai Precision Industry Co stocks fell sharply, closing at NT$181.5, down 6.9%, to the lowest level since August 2006. The drop comes on the heals of Foxconn's announcement that it will provide permanent contracts to employees with more than eight years of service. The market reaction to the new labors laws that go into effect in China next month are consistent with growing concerns over rising labor costs in the region.

According to some analysts, Foxconn's new employment practices could result in a 15% increase in its labor costs in China. Foxconn employs more than 400,000 on the mainland. Foxconn are expanding in Vietnam, a location recognized for lower costs.
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BANGALORE – The Electronic Industries Association of India called on the government to level the playing field for domestic component makers, saying the field is falling behind thanks to imports and the high cost of local production, say published reports.

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SAN JOSE Gartner Inc. lowered its 2007 semiconductor forecast to 2.9%, down from 3.9%.
The research firm also tempered its estimates for 2008, saying growth will hit 6.2%, versus earlier predictions of 8.2%. However, Gartner raised its 2009 forecast to 8.5% growth, up from 6.1%. 
Gartner projects a 4.8% CAGR for semiconductors from 2006 to 2011.
Gartner lowered its near-term forecast because it believes the industry will face tougher challenges as it moves to 32-nm process technology, according to published reports.
Gartner’s preliminary 2007 figures showed Toshiba, Qualcomm and Hynix as top performers and Advanced Micro Devices, Freescale and IBM coming in at the bottom.
"The market is maturing, and it is time for further consolidation," said Bryan Lewis, a vice president of semiconductor research. "If you don't have scale or a clear way to add value, you need to consider exiting this business," he said.
Continuing price pressure in growing consumer markets such as cellphones and LCD TVs, and an oversupply of DRAMs, have tightened the situation.
Lewis suggests a recession of as much as a 5% contraction in chip sales could happen in 2008 if oil prices do not level off, and if holiday sales falter.
In 2009, 32-nm designs could worsen the situation, says Gartner, which says costs of developing a 32-nm device could reach $75 million.
For chipmakers, process development costs for 32-nm could reach $3 billion, while costs for a 32-nm fab are estimated to reach $3.5 billion, Lewis said.
Toshiba was the fastest-growing chip company this year, rising 27.8%, says Gartner. At the bottom, AMD fell 22.4%, while Intel rose 8.2%. IBM had a difficult year after surging in the double-digits last year, Lewis said.

AUSTIN, TX – Twenty-three percent of the 20.1 million LCD TV units shipped in the third quarter were made by contractors such as TPV, Jabil, AmTRAN, Quanta, Proview, Vestel and Wistron, says the latest report by research firm DisplaySearch.
Many LCD TV OEMs – including Grundig, HP, Polaroid, Vizio, ViewSonic and Westinghouse – outsourced 100% of their manufacturing.
Philips outsourced more than 60% of its LCD TVs shipped in the quarter. Some intend to increase their outsourcing share for certain regions and products as the market expands, while other brands intend to bring more volume in-house as they expand into new regions, according to DisplaySearch.
More than two million LCD monitor panels shipped in the third quarter were used for LCD TVs, a significant leap from 900,000 in the prior quarter.
LCD TVs under 26" will increasingly use LCD monitor panels, says the firm.
Some 23.7 million LCD TV modules were shipped from TFT LCD makers, while LCD TV manufacturers shipped 20.1 million units, the report adds. These variances reportedly were a result of supply chain, assembly lead-time, buffer stocks and channel inventory.
TPV led the TV set subcontract manufacturing market with a 19.9% share, followed by Proview, Jabil and AmTRAN.
The main customer for TPV is Philips, and the main customer for AmTRAN is Vizio; the main customer of Proview is Polaroid, and the main customer of Jabil is Philips, says DisplaySearch.
Philips was the top customer of LG.Philips LCD; Samsung LCD TV was the top customer of CMO and CPT. Sony was the top customer of AUO and Samsung (including S-LCD).
In addition, each of the top-five suppliers looked to their top-five customers for at least 50% of their volume, with the exception of CMO, concludes the report.
ATLANTAUP Media Group, parent company of Circuits Assembly and Printed Circuit Design & Fab, announced today that support for Virtual PCB, the industry's first virtual trade show and conference for the PCB design, fabrication and assembly markets, continues to grow, as leading industry suppliers sign on to exhibit at the Feb. 12-13 event.
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TEMPE, AZ – New orders for manufactured goods were up slightly in November, and production grew 2.3 points to 51.9%. The new orders index stood at 52.6%, above the 50% threshold, signaling expansion, the ISM trade group reported Tuesday.
The November PMI, a measure of the nation’s productivity, was down 10 basis points sequentially. Inventories were down 30 basis points at 46.9%; customer inventories dropped five points to 49%. Backlogs decreased 4.5 points to 41.5%.
Economic activity in the manufacturing sector expanded in November for the 10th consecutive month, while the overall economy grew for the 73rd consecutive month, says ISM.
“The rate of growth in the sector was down slightly compared to October,” said ISM spokesman Norbert J. Ore. “While other segments of the economy are struggling, manufacturing continues to grow due to continuing strength in new orders, and a recovery in production from last month. Prices, driven higher by energy prices, are once again the major concern."

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