PowerChip's Huang: Grave Supply Shortage to Hit DRAM Market by 2015

Frank Huang, chairman of memory chipmaker PowerChip Semiconductor Corp. (PSC), forecasts grave supply shortage in global dynamic random access memory (DRAM) market by 2015 when demand for such memory chips from servers and the Internet of Things (IOT) catch up to that of other applications.

Huang bases his prediction on the lack of new DRAM capacity in the past five years due to increasingly prohibitive cost, at around NT$60 billion (US$2 billion), for a new DRAM factory coupled with diversifying applications as  servers, mobile devices and IOT equipment in addition to personal computers, to result in steady demand-over-supply in the DRAM market.

Also the PSC chairman believes 2015 to be a boom year for IOT industry and a remarkable year for his company, that IOT equipment needs to integrate memory chips, micro controllers, and networking chips including Wi-Fi, Bluetooth, and radio frequency chips, to inspire IC design houses to undergo M&A to bridge technological gaps needed for  IOT equipment.

Those unable to merge with others or still can afford to wait, M&A, PSC, Huang stresses, is the ideal strategy to acquire the technologies needed for wafer-level chip design capability.

Therefore his company supplies integrated-IC designers that are not available at logic-IC foundries like Taiwan Semiconductor Manufacturing Co. (TSMC), a business niche the company has carved out, which Huang christens “Open Foundry” to denote its DRAM-and-pure-foundry role.

PSC has posted over NT$10 billion (US$333.3 million) in revenue each of the three years beginning 2013, its best earnings  in its 20-year history, and that  price is no longer the decisive factor for corporate development, said Huang.

The company will post stronger sales yearly thanks to brisk orders from designers of bio chips, mobile payment chips and IOT chips, said Huang.

Huang noted that ApplePay will fuel demand for mobile payment chips, which are also highly integrated as IOT chips.

In the bio chip sector, Huang said his company is the world's first chipmaker to provide tailor-made chips contracted by several American design houses. (KL)