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Profits plunge for electronics

CHINA'S electronics manufacturing industry's net profit fell 96.3 percent year-on-year in the first two months after the mobile phone and TV manufacturing sectors were hit by the economic slowdown, the Ministry of Industry and Information Technology said yesterday.

In January and February, China's electronics industry net profit was 680 million yuan (US$100 million). In the same period a year ago, the industry's net profit jumped 37.8 percent year on year, the ministry said.

"It's a tough time. You know the winter is coming, and you don't know when it will be spring," said Richard Chang, chief executive of Semiconductor Manufacturing International Corp, the biggest made-to-order chip maker on the Chinese mainland.

The handset industry seemed to be most affected, industry officials said.

In the first quarter, China's handset output dropped 3.7 percent year-on-year. Last year, China produced 559 million handsets, a 2-percent growth year on year, compared with a 58-percent rate in 2006.

All the home-grown handset makers are expected to post losses in the first quarter except ZTE and Huawei, which depend on income from telecommunications equipment sales.

Global mobile phone sales are expected to drop 10 percent this year, which will influence the export-oriented electronics industry, according to Gartner Inc, a US-based IT consulting firm.

TV set output decreased 3.7 percent year on year in the first quarter in China.

Personal computer output, however, slightly increased 3.5 percent to 35.91 million units, the ministry said.


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