Diversification seems to be paying dividends at Hynix Semiconductor Inc., which in the past year has put significant capital and human resources into expanding its non-DRAM semiconductor businesses to reduce the company's financial risk during the market's inevitable downturns.
Of Hynix's $59 million in first-quarter profits this year, nearly 90% was attributed to its System IC business unit, said Daniel Lee, director of sales and marketing.
"That was the first time we beat DRAM from a profit perspective," he said.
Though not immune to the industry's current weakness, Hynix has found a few areas of strength in its System IC business. Encompassing logic products and foundry, the unit is working with fully depreciated DRAM fabs that have been converted to 0.35- and 0.25-micron logic processes, which keeps overhead costs down.
In the foundry division-running at 40% to 50% of capacity and suffering from weak demand-a masked-ROM supply deal entered into last year has been an unexpected boon, according to John Radanovich, vice president of sales at the San Jose company.
When Sharp Corp.-then the largest masked- ROM supplier-exited the business last year, a mutual customer turned to Hynix for help, according to Radanovich. While he could not quote volume or revenue information, he said masked ROM has become a robust business and may turn into a long-term foundry program.
"We've been quite surprised by the number of people interested in finding more sources of masked ROMs," he said. "Customers are looking for assurances of supply, even in these tough times."
Masked ROMs, less vulnerable to the memory market's swings, are a popular alternative to flash memory when flash supply is tight, but generally are in steady demand, Radano- vich said. The chips are a cheaper, nonprogrammable form of nonvolatile memory used in games, PDAs, cellular handsets, and printers.
Otherwise, the foundry group is busy qualifying manufacturing processes for several new undisclosed customers in preparation for the market's eventual recovery, Radanovich said.
Meanwhile, Hynix's standard-logic products group "made our first-quarter numbers," due to a heavy regional focus in Asia's relatively strong consumer markets, Lee said. Though the company is bracing for second- and third-quarter jolts, sales so far have not been badly affected, he said.
While its microcontrollers and CMOS image sensors continue to gain market share overseas, LCD drivers-mainly used in handheld communications and industrial devices-have brought the highest returns, Lee said.
"Even though the market is slow, LCD drivers are in short supply, which keeps demand strong," he said.
The logic-IC group is also using a proprietary RF manufacturing process to develop a Bluetooth analog front end to offer as a stand-alone product. It may eventually be leveraged as an ASIC core by the foundry unit, according to Lee.