IC designers glad to see Japanese clients’ low-power SRAM orders flowing back
Cage Chao, Taipei; Liu Yi-fang, DigiTimes.com [Friday 21 September 2001]
Despite low-power SRAM still suffering overly-low prices, local IC design houses noted that after market segmentation has been achieved, price declines seem to have eased. With the flowing back of orders from Japanese manufacturers, design houses expect sales to climb from their bottom soon.
In the current low-power SRAM market, 1Mbit, 2Mbit and 4Mbit-SRAM for phones are still the mainstream. One megabit SRAM is mainly used in lower-end GSM (global service of mobile communications) phones, 2Mbit SRAM is required in large quantities by both GSM and CDMA (code division multiple access) phones and 4Mbit SRAM is provided to higher-end GSM and GPRS (general packet radio system) phones.
Although the mobile phone market is the largest market for low-power SRAM products, given that competitors are mostly international IDMs (integrated device manufacturers) like Hynix Semiconductor, Samsung Electronics, Cypress Semiconductor and United Microelectronics Corporation (UMC), local design houses usually avoid placing too much emphasis on this segment.
Generally speaking, local design houses target their low-power SRAM products at portable electronics niche markets, including STBs (set-top boxes), GPS (global positioning system) devices, printers, PDAs (personal digital assistants) and Nintendo’s Game Boy Advance handheld game. They pointed out that although they avoid entering the major handset low-power SRAM battlefield, after their products are accepted in niche markets, their profitability will still be guaranteed.
They described the current low-power SRAM market as still a buyers’ market. Due to clients’ routine price bargaining and sellers’ unexpected concessions, SRAM pricing has been out of order.
At present, the purchase bid of 256K low-power SRAM remains at US$0.50-0.60 and selling offer at US$0.7-0.8. However, in the mobile phone SRAM market, given large numbers of competitors and high inventory levels, 1Mbit and 2Mbit SRAM products are priced from US$1.50 to US$2, but prices lower than US$1.50 are also common. Manufacturers pointed out that their official prices have declined by over 50% since the fourth quarter of last year.
However, the flowing back of Japanese manufacturers’ orders has created an optimistic climate for IC designers. They noted that Japanese consumer electronics are mostly aimed at niche markets, so Taiwanese low-power products can perfectly satisfy their needs.
Moreover, they revealed that despite the current downturn and hazy market outlook, their Japanese clients’ inventories have dropped far below safe levels and they need to add inventory. They expect that this wave of increased orders from Japanese companies in the third and fourth quarters will improve their lackluster revenue performance, but whether other clients will have such short-term recovery in demand is still unknown. |
