Chip manufacturing plants in China are thought to be suffering as a result of the economic downturn, as pay cuts and staff reductions are underway and the electronics industry shoulders the burden of weakening demand.

The global economic crisis is reportedly wreaking havoc with the plans of chipmakers, with such plants in China believed to be suffering particularly badly.

Plants of chip makers in China are undergoing pay cuts and staff reduction. Engineers finally have enough time to take a paid or unpaid holiday, according to a recent report by www.nanfangdaily.com.cn.

Merely 30% of production facilities of Taiwan Semiconductor Manufacturing (TSMC) in Shanghai are in normal operation, while workers at the production lines are now working only eight days each month.

Chip manufacturing giant Intel has decided of late that its plants in Shanghai will cease production for two weeks at the end 2008, in an effort to cut costs and clean up inventory.

Intel's archrival AMD meanwhile, is also thought to be struggling with costs control according to the report. AMD China is asking its employees in Beijing, Shanghai, and Shenzhen to take their annual leave before the end of this year.

Other multinationals such as NXP, Chartered Semiconductor, nVidia, Texas Instruments, and Freescale Semiconductor have also drawn-up downsizing schemes of their own, it is believed.

Asia is seen as the chip factory floor of the world, with chip makers in the area feeling the pressure of falling prices of consumer electronics and faltering demand the world over.