SiS joins sinking ship

On one side you have giant chip makers lumbering around, making the price drop every time they sneeze, which means you take a loss on chips you've already bought. And on the other side you have PC makers, who are going to squeeze your profit margins 'til you squeak, because they know that plonking a few chips onto a stick of PCB isn't rocket science.

So why would a perfectly healthy company suddenly jump into this business? SiS has a good excuse. "It's for our customers," said Nelson Lee, director of the company's product marketing division.

SiS, one of the world's top five PC chipset makers, is now offering customers package deals on chipsets together with its new line of self-produced memory modules.

The company can help protect its customers from unexpected shortages and price fluctuations in the memory market, Lee says. This, of course, has the added advantage of keeping them buying chipsets.

SiS sources most of its wafers from Elpida in Japan, with Korea's Hynix and Taiwan's PowerChip Semiconductor as alternates. The chips are packaged and the modules assembled at SiS's own plants in Taiwan, Lee says. Packaging will move to China in a couple of years.

Another advantage to the package deals: "We can guarantee there are no compatibility issues between memory and chipset," Lee says.

In some cases, SiS is effectively taking over the risk of expensive memory price fluctuations from its customers. However, the company isn't going to get its fingers burned, Lee claims, because its understanding of the chipset market gives it penetrating insight into memory demand.

In fact, he even suggests that SiS might be able to use its influence on the chipset supply to tweak memory demand cycles in its favour. This sounds plausible in theory. But considering the size of the behemoths lumbering through these markets, it could be SiS that ends up getting tweaked if it pushes its luck too far. µ

L'INQ
www.sis.com