(Yicai) Nov. 16 -- Hua Hong Semiconductor's net profit plummeted 86 percent in the third quarter from the same period last year as the Chinese semiconductor manufacturer trims prices to an all-time low amid a downturn in the consumer electronics sector.

Hua Hong logged net profit of USD14 million in the three months ended Sept. 30, while revenue slumped 9.7 percent year on year to USD568.5 million, according to the Shanghai-based company’s latest earning report released yesterday.

Hua Hong has been slashing prices for some time now to adapt to market conditions, and this has had a big impact on its recent financial performance, a company source told Yicai yesterday.

The firm's gross profit margin slumped 11.6 percentage point in the third quarter from the previous quarter and 21.1 percentage point from a year earlier to 16.1 percent, it said. And in the fourth quarter it is expected to contract sharply quarter on quarter to between 2 percent and 5 percent, it said.

The market remains weak and it usually takes half a year for an uptick in the consumer market to reach the wafer foundry, said the source.

Hua Hong hopes to stabilize prices, which are already at a record low, before the end of the year or by the first quarter next year. This quarter should be the last quarter of price cuts, it said.

Hua Hong’s shares [SHA: 688347] closed down 2.5 percent at CNY44.25 (USD6.10) today.

Editors: Shi Yi, Kim Taylor