Samsung, Hynix Sharpen Non-Memory Chip Business
By Kim Yoo-chul
Staff Reporter
Samsung Electronics and Hynix Semiconductor are to increase investments in non-memory chips as memory chip prices continue to fall.
Analysts interpret Samsung’s recent decision to buy Tel-Aviv-based TransChip Israel as part of the company’s efforts to confront global leaders in the sector.
``Despite massive investments in the non-memory sector in 2002, we failed to narrow the market gap. To limit the impact of weakening memory chip prices on the company’s bottom line, we will strengthen the non-memory business such as in the image sensor sector,’’ said a high-ranking official of the word’s No. 1 manufacturer of memory chips.
``We are also in the final stage of merger talks with two or three other overseas companies relating to the non-memory sector and hopefully the result will come out this year,’’ the official said, noting that intensifying competition pushes Samsung to have more mergers and acquisitions.
Last week, Samsung announced that it had bought TransChip, a non-memory chip developer, for $70 million.
The deal was the first in a decade signed by Samsung. In April 1997, Samsung paid $20 million for the hardware systems business of U.S. entertainment software publisher 3DO Co.
Samsung officials say the takeover will help Samsung strengthen its R& D capabilities in the non-memory chip business.
TransChip develops CMOS chips for image sensors (CIS) used in cameras in mobile phones and other multimedia devices.
CIS uses 10 percent of the power of widely used in charged coupled device (CCD) image sensors, thereby reducing battery consumption and power charges, while prolonging use.
The global CIS market is expected to reach $6.3 billion in 2011 from $4.2 billion this year.
According to industry estimates, U.S.-based Micron Technology, Samsung Electronics and Toshiba from Japan account for 50 percent to 60 percent of the CIS market. Hynix once captured 50 percent of the market before selling MagnaChip.
Hynix, which recently announced a plan to promote its non-memory business after a three-year hiatus, will increase the portion of the business to 40 percent in terms of sales by 2010 by hiring more experienced workers in the CIS division.
``By hiring more workers in the research-related, product design, solid state disk (SSD) and CIS divisions, we will accelerate efforts to escape from higher dependency on fluctuating DRAM chips,’’ Hynix spokesperson Park Hyun said.
Hynix, the world’s second largest memory chipmaker, suffered a setback in the third quarter as falling memory chip prices dented the company directly. ``We are engaging in overhauling our business structure,’’ Park said.