Bilow: Here's the full article and link. fwiw
NEC Aims to Regain DRAM Share via Speed, Not
Price (Update2)
By Minoru Matsutani
Tokyo, Aug. 9 (Bloomberg) -- NEC Corp., the world's fourth- largest memory
chipmaker, aims to compete with top-ranked rivals through superior
technology, not low prices, NEC Electron Devices Deputy President Keiichi
Shimakura told Bloomberg News.
Last year, the Tokyo-based company had an 8.8 percent market share in the
memory chip market, according to Dataquest Inc. Korean and U.S. rivals have
eroded NEC's share for years by competing on cost.
During the last decade, Korea's Samsung Electronics and Hyundai
Electronics Industries Co. overtook Japanese rivals as the world's largest
memory chipmakers, largely through investments in cost reduction and
development of new products. NEC will need to spend billions of dollars on
new factories and technology if it wants to reclaim its earlier position.
``NEC chose the technology route probably because the company has no
chance to beat foreign rivals'' by offering lower prices, said Yukari Yamada, an
analyst at Dataquest. Still, NEC may have trouble competing because
competitors also aim to produce faster chips, she added.
While Fujitsu Ltd. and other Japanese chipmakers are shrinking their DRAM
operations, NEC is committed to the business, Shimakura said.
Core Strategy
NEC and Hitachi Ltd., Japan's third-biggest chipmaker, last December set up
a joint venture to develop and design DRAMs. Although analysts say the two
should make DRAMs together to lower production costs per unit, NEC's focus
is on making faster memory chips rather than cutting costs by boosting
production volume.
``Producing fast DRAMs is our core strategy,'' Shimakura said, adding that
NEC may adopt a Rambus Inc. memory design to achieve its aim.
Mountain View, California-based Rambus has licensed its high- bandwidth
design to all of the top-ranked memory chipmakers, including Samsung,
Hyundai and Micron Technology Inc. of the U.S. Rambus memory chips
enable computers to process data faster than is possible with mainstream
DRAMs. However, production costs for the Rambus standard have made it
prohibitively expensive, and the market share for such chips is currently less
than 5 percent.
Samsung is the world's biggest DRAM maker, with a 21 percent market share
in 1999, according to Dataquest. Hyundai Electronics Industries Co. is the
second with 19 percent and Micron is the third, accounting for 14 percent,
according to Dataquest.
NEC will spend 600 billion yen ($5.5 billion) over the next three years on
overseas acquisitions, said NEC President Koji Nishigaki last month.
Shimakura said NEC would like to acquire some companies with technology
that enables the company to make faster chips, mainly system chips that
combine memory and processing functions on a single piece of silicon.
NEC shares fell 85 yen, or 3 percent, to 2,740.
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