Tuesday, November 08, 2005

Multichip Package Zero Tariffs To Benefit Chip Makers for Cellphones

Yahoo picks up a Dow Jones article that reports that "makers of chips for cellphones stand to benefit from an agreement reached last week to eliminate duties starting January on multichip package integrated circuits sold and bought in the U.S., European Union, Japan, Korea and Taiwan."

According to the article, the "elimination of the tariffs is also expected to make cellphones and other portable electronic devices that use the package more affordable to consumers, by lowering costs of semiconductor technology. Multichip package (MCP) is a semiconductor device that includes more than one silicon chips inside the package and can include a combination of memory chips such as static random access memory, or SRAM, NOR and NAND flash memory chips. MCPs are widely used in cellphones to reduce volume take up."

Chang-Eyun Yu at BNP Paribas Peregrine said, "This is positive for the semiconductor industry and especially to those that have a large business in MCPs such as Samsung Electronics."

Crystal Lee at ABN Amro added, "Their [Samsung's] products can be sold at a lower price resulting in better sales. It will stimulate more demand as MCPs are widely used in cellphones."

Market researcher iSuppli Corp. forecasts total revenue for all memory chips in handsets to grow to $8.1 billion in 2006 from $7.3 billion estimated for this year. Mark DeVoss at iSuppli said,
"The adoption of MCP as a memory solution began as far back as 1999-2000 and were primarily used in phones in the Asian market where the small form factor they enabled was a very desirable feature. Since then, MCP has been used extensively by nearly every handset manufacturer worldwide."