HSINCHU, Taiwan -- Closing in on $1 billion in sales this year, Taiwan's Macronix International Co. Ltd. is pushing to expand its chip portfolio by quietly forging separate deals with Analog Devices Inc. and Nintendo Ltd.
In the first alliance, Macronix is working on a deal with Analog Devices under which the companies will develop system-on-a-chip products based on ADI's digital signal processor technology and Macronix' flash-memory lines.
The Taiwan company is also expanding its ties with Japan's Nintendo, its largest chip customer. Under those terms, Macronix is developing a new line of integrated circuits for Nitendo's next-generation game machine, code-named "Game Cube."
Macronix is also expanding its fab capacity in order to meet huge OEM demand, said Miin Wu, president of the Hsinchu-based company. Macronix is the Taiwan's largest supplier of EPROMS, EEPROMs, flash memories, ROMs, and other ICs.
"Business is good right now," said Wu in an interview with SBN at the company's headquarters in Hsinchu. "We can't keep up with the demand in the market. In fact, next year, we will be fully booked."
Citing huge demand for its memory ICs and other chip products, Macronix this year will become the latest Taiwan company to reach the $1 billion sales mark. In fact, the company's sales will nearly double this year, from $570 million in 1999, to $1 billion or more in 2000.
The company, which reported a profit of $49.7 million in 1999, attributed the growth to strong demand in the game machine, set-top box, and other equipment markets. In 1998, it reported a loss of $11.3 million on sales of $401.2 million.
Macronix has made a major comeback after a downturn in 1998, and in many respects, has come a long ways since its inception in 1989. Co-founded by Wu, a former chip veteran of Intel Corp. and VLSI Technology Inc., the Taiwan chip maker has emerged from its start at a supplier of simple ROM devices to one of the island's leading IC-design company.
The Hsinchu company claims to be the world's leading supplier of read-only memory ICs as well as a worldwide player in system-on-a-chip (SoC) designs. "In Taiwan, the foundries get a lot of the attention," said Wu, "but we believe the barriers to entry are low in the foundry business, compared to what we're doing."
For example, Macronix generates a large percentage of its business from one of the hardest markets to crack for a foreign chip supplier: Japan. In fact, the company is the primary source of 64-megabit ROM chips for Nintendo's 64-bit game machines.
"Our Nintendo business is higher in 2000 than last year," Wu said. "We expect our mask ROM business will shift from the Nintendo's 64-bit game machines to Nintendo's Game Boy products." The Taiwan company is also ramping up a new line of ASICs, clock chips, networking ICs, and other products for use in Nintendo's next-generation game machine.
Dubbed the Game Cube, Nitendo's new product is a combination game machine andInternet-access device that will compete against the likes of Sony Corp.'s Playstation II. Built around a PowerPC RISC processor supplied by IBM Corp.'s Microelectronics Division, Game Cube is scheduled to ship in 2001.
Macronix is also developing other new standard products, including 32- and 64-Mbit flash devices based on its patented "PACAND" architecture. It will also shortly jump in the wireless-IC market this year, rolling out a 2.4-GHz device designed for use in Bluetooth and related applications.
And the 11-year-old company is also making a strong push in system-on-a-chip arena, where it has developed a line of integrated devices in cooperation with Infineon, Philips, and other companies.
Its latest effort is with Norwood, Mass.-based Analog Devices. The two companies will develop products based on Analog Devices' DSPs and Macronix' flash devices. "One of the markets we are looking at is embedded flash," Wu said. He did not elaborate on the details of this chip line, however.
On the manufacturing side, meanwhile, Macronix continues to ramp up its capacity. At present, it has separate 6-inch and 8-inch wafer fabs. The 8-inch plant is currently producing 30,000 wafers a month, but the company hopes to increase the volumes to about 46,000 wafers a month in 2001.
Recently, the Taiwan company also signed a deal to obtain foundry capacity from Israel's Tower Semiconductor Ltd. The five-year pact is aimed at increasing Macronix's non-volatile memory capacity and expanding its relationship with the Israeli foundry (see Aug. 14 story).
In Taiwan, Macronix is also in the process of building Fab 3, which will house an 8-inch wafer-processing line for 0.13-micron and below technology. The new plant is expected tol move into pilot production in the second half of 2001.