ISSI plans to use cash reserves to beef up specialty memory line

ISSI plans to use cash reserves to beef up specialty memory line
By Anthony Cataldo, EE Times
July 27, 2001 (4:34 p.m. EST)
URL: http://www.eetimes.com/story/OEG20010727S0070

SAN MATEO, Calif. — Though its revenue has fallen by more than two-thirds in the last six months, specialty memory chip vendor Integrated Silicon Solution Inc. (ISSI) is looking to spend some of its cash reserves on an acquisition to beef up its line of specialty memory devices, chairman and chief executive officer Jimmy Lee said.

"We have been looking for several months now," Lee told EE Times. "We've already looked at six or seven companies and we're now looking at three or four actively."

Lee said ISSI is interested in acquiring new EEPROM, SRAM or DRAM technology. This includes companies specializing in single-transistor SRAM technology similar to that of Mosys Inc., the most well-known purveyor of 1T-SRAM technology. Lee did not name the companies ISSI is courting.

ISSI is sitting on $140 million in cash and has another $54 million in liquid investments. The company, however, is being cautious about how it spends its money d uring a severe semiconductor market downturn, Lee said.

"When it comes to cash usage, the industry is being very cautious at this point," Lee said. "There are some good opportunities now. On the other hand, we're being very selective. A lot of technology can look good, but we have to still check it out."

The company has made a name for itself by providing high-speed specialty devices or hard-to-get parts that larger memory suppliers no longer offer, such as extended-data out (EDO) DRAMs. That strategy helped it win customers like Cisco, Nokia, Sony and Motorola.

Since the telecom bubble burst, however, ISSI has taken a big revenue hit by being overexposed to the communications market, where 85 percent of its devices end up. The company reported that its most recent quarterly revenue fell to $20 million, while it lost $3.7 million. At its peak, at the end of 2000, the company had reported quarterly revenues of $65.2 million and $12.2 million in profits from product sales.

The company is look ing to shore up some of its lost sales by targeting consumer electronics, but many of its competitors have the same idea. "The consumer market is the only one that is holding out," Lee said. "The volume is there, but pricing is terrible."

The market should start to make a comeback in the fourth quarter, but it isn't likely make a significant bounce-back until 2002, Lee said.

As it waits out the downturn, ISSI is planning to introduce several new memory devices in the coming year. One is an 18-Mbit SigmaRAM SRAM, a functional superset of the quad-data-rate synchronous SRAM standard. The difference is that with SigmaRAM, system designers don't need a central clock. Also supporting the SigmaRAM spec are GSI Technology, IBM, Mitsubishi, Motorola, Samsung, Sony and Toshiba.

ISSI's SigmaRAM device will have a clock speed of 200 to 275 MHz and will include separate input and output pins to enable simultaneous read and writes. The part is slated to hit the market in the fourth quarter, according to ISSI.

In the DRAM area, ISSI plans to introduce a 128-Mbit double-data-rate device early next year. The part will serve as a template for lower-bit-density derivatives that will come out later. Lee said he expects the part will be used mostly in communications applications, as well as some graphics subsystems.

ISSI, which employs process technology engineers to work with some of its foundry partners, is also working on ramping up its first 0.13-micron SRAM parts by yearend. TSMC is using ISSI's SRAMs to test its latest 0.13-micron process, and TSMC recently demonstrated wafer yields of 85 percent for a 4-Mbit device, Lee said.

ISSI also works closely with Singapore's Chartered Semiconductor and is part owner in a 0.25-/0.18-micron wafer fab being built in Shanghai. The fab, owned by Semiconductor Manufacturing International Corp., is expected to go online in the fourth quarter, Lee said.