The global memory industry will undergo further consolidation, with the number of memory makers to decrease in the near future, according to Frank Huang, chairman of Taiwan-based Powerchip Semiconductor Corporation (PSC).

The memory market is very volatile, with the revenue growth rate fluctuating from 42% in 1995 to a negative 9% in 1996; from 37% in 2000 to a negative 32% in 2001, Huang said.

In addition, memory makers have been under-investing in the industry, with capex (capital expenditure) budgets being lowered over the past few years, and bit growth has remained at a low single digit percentage, Huang indicated.

Still, makers have faced mounting pressure to lower their production costs and expand their economies of scales, as memory prices are rapidly falling and the end-user trend has moved from PC-oriented products to mobile- and consumer-oriented products. Products such as 3G and game consoles will become mainstream memory applications, Huang explained.

The PC and server segments accounted for about 80% of memory application in the 1990s but the percentage has fallen to 43% this year and will decrease to just 6% from by 2008, Huang said.

Furthermore, memory makers will have to decide whether they will continue investing in 8-inch wafer production or in new 12-inch wafer fabs, Huang indicated.

Moreover, the required investments for memory manufacturing will continue increasing and collaboration with other makers will definitely become another trend. Taiwan-based memory makers are wise to form alliances with competitors from other countries, Huang said. PSC, for instance, is working with Japan-based Elpida, which also works with ProMOS Technologies. Nanya Technology has allied with Germany-based Infineon Technologies.

Huang was speaking at a CEO forum during the opening ceremony of SEMICON Taiwan 2005. Other speakers included Stan Myers, president and CEO of SEMI; Yuen-Chuan Chao, president of Taiwan External Trade Development Council (TAITRA); Rick Tsai, CEO of Taiwan Semiconductor Manufacturing Company (TSMC); Steve Newberry, CEO of Lam Research; Jerry Cutini, CEO of Aviza Technology; and Mei-Yueh Ho, minister of Taiwan's Ministry of Economic Affairs

By: DocMemory
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