March 29, 2001
Hyundai Electronics Signs Deals
To Provide High-Speed PC Chips
By Terho Uimonen
Staff Reporter of The Wall Street Journal
In a move that heats up the battle over which companies will be the dominant suppliers of next-generation memory chips for personal computers, Hyundai Electronics Industries Co. said it will provide Compaq Computer Corp. and Hewlett-Packard Co. with high-speed chips for desktop PCs sold in the U.S.
The deal signals important support among first-tier PC companies for a nascent memory technology called DDR SDRAM, for double data rate synchronous dynamic random access memory. Additionally, it serves as a potent vote of confidence in Seoul-based Hyundai Electronics, which is burdened with around $4 billion in debt.
The decision by the computer vendors to adopt the specialized memory-chip technology means Hyundai Electronics' technology will likely emerge as a major rival to an alternative high-speed chip backed by Rambus Inc. and Intel Corp. of the U.S.
Hyundai Electronics' DDR SDRAM modules are compatible with high-end microprocessors from Advanced Micro Devices Inc. and chip sets supplied by Via Technologies Inc. The modules will compete with Intel's top-of-the-line Pentium 4 processors, which can only be used in PCs featuring memory chips based on Rambus's proprietary chip technology. Intel, the industry leader, hasn't released processors or chip sets that support the DDR SDRAM memory technology.
Kang Inyoung, a spokesperson at Hyundai Electronics, said full-scale shipments to H-P and Compaq began this month, and the company expects to sign similar deals with Gateway Inc. and International Business Machines Corp., as well as Taiwan companies that manufacture computer motherboards. The company expects to ship $380 million of DDR SDRAM chips in 2001, a more than fourfold increase over last year.
Although the demand and prices for DRAM chips are expected to shrink this year, it is still forecast to be a $23.8 billion market, according to International Data Corp.
Backers of DDR SDRAM say it is a more cost-efficient alternative to Rambus DRAM chips. Rambus, however, says its patent portfolio covers technologies used in DDR SDRAMs, and the chip makers should pay royalties for using its intellectual property. Some companies contest that claim, which is the subject of pending lawsuits.
-- Dow Jones Newswires contributed to this article.
Write to Terho Uimonen at terho.uimonen@awsj.com |
