Memory Dollars In The Palm Of Your Hand

Electronic News, August 31, 1998 by Michelle Abraham

As unit shipments increase, semiconductor manufacturers are putting more emphasis on developing low-power processors so they can compete in this space. Low-power processors from Cirrus Logic, Motorola, Hitachi, NEC and Philips have already been designed into smart handheld devices, and Intel and Toshiba have announced products. Big players are serious about this market. The semiconductor dollars shipped in smart handheld devices will grow from $136 million in 1997 to over $1 billion by 2001.

Since all that processing requires memory, the news is especially good for the memory suppliers. Cahners In-Stat Group estimates that in 1998, memory will account for 50 percent of the total semiconductor dollars for this market. The news gets better. Thus far, each time the next-generation product has come to market the memory size has doubled. As this trend continues, the type of memory used in smart handheld devices will shift from relatively expensive memory like pseudo SRAM and flash to less costly mask ROM and DRAM. However, the percentage of the total semiconductor dollars in smart handheld devices that is attributed to memory will still increase each year.

Dollars for other semiconductor components, processors and companion ASICs will increase each year but at a slower rate than unit growth, as falling ASPs and integration impact revenues. Even with new features like color screens and software modems being added with each new product generation, processor ASPs have remained stable, or even fallen, as increased functions have been integrated on-chip.

Strong unit growth coupled with ever increasing memory requirements constitutes a good opportunity for chip suppliers. The above forecast does not even include the additional flash dollars in the form of flash cards, which are used to upgrade a device's storage capacity!! Finally, some good news.

Michelle Abraham is a senior analyst with Cahners In-Stat Group's Multimedia service. Cahners In-Stat Group has recently released its latest report on the smart handheld device market, "The Convergence of Smart Handheld Device Technologies" ( MM9805DR). For more information, please see the web page at www.instat.com.