One troubling factor is the ongoing glut of chip manufacturing capacity.
An arcane industry statistic known as "fab utilization, " which measures how much of the world's chip manufacturing capacity is being used, had reached only 65.9% by the end of 2001, according to the Semiconductor Industry Association.
When times are good chip makers overinvest in manufacturing capacity.
The Altera deal is the latest sign that Intel is moving ahead with a serious effort in the chip foundry business, using capacity and its manufacturing expertise to build chips for others.
Using a new 3-D chip design that stacks more capacity in the same amount of space, Matrix claims that it can deliver packaged content faster and less expensively than masked ROM and avoid the moving parts that plague discs.
The analyst contends that the steep price declines in DRAMs late in calendar 2010 lead to a quicker industry correction, as rival memory chip makers announced production cuts and pushed out capacity expansion plans.
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Profits will elude these chip makers until demand rises to match the excess capacity, which should occur around the middle of 2013.
But we have been struck by the degree of capacity we have administratively to at least chip away at some of these problems.
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That would stop a reduction in capacity, ironically guaranteeing the fall in chip prices that forced Hynix to consider the merger in the first place.
Intel is introducing a new series of solid-state hard drives that offer up to 600 GB in capacity, CNet reports, as its chip geometrics shrink to just 25 nanometers.
Tanausu Ramirez, another Intel research scientist working on the 48-core chip said that instead of one core working at near top capacity and using a lot of energy, many cores could run in parallel on different projects and use less energy.
Toshiba faces a difficult pricing environment because excess capacity led to a collapse in electronic component and memory chip prices.
As Moore's Law (computing power of a chip doubles every 18 months) continues to unfold and as bandwidth capacity continues to explode, just-turn-on-the-switch, easy-to-use high-tech appliances for specific functions will proliferate.
The Goldman analyst asserts that wafer capacity will hit a new peak in Q4, creating risk of excess chip supply in the second half of this year and into 2012.
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The Japanese firm is pinning its hopes on the processing power and storage capacity of its new console, which will include a revolutionary processing unit based on the new Cell chip, developed with IBM and Toshiba.
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