Motorola is pulling out of the market for dynamic random access memory (DRam) by the end of 1998 owing to poor penetration of the market.
The company has failed to capture significant market share in the past 10 years, managing to secure only two to five per cent. It will now focus on microcontrollers, fast static Ram (SRam), Power PC chips and embedded processors. The company will take a $170 million charge on its second quarter earnings to 30 June.
Paul Clark, European marketing communications manager at Motorola?s semiconductor group, said: ?Poor performance of the market within the past two months also helped to make the decision.
?From now on we are only going after business that we are good at and that we can lead in.?
Mark Mulford, group managing director of Datrontech, was not surprised. ?DRam is a game for the Far East,? he said. ?There won?t be a shortfall of DRam just because Motorola pulls out.?
Motorola?s decision follows similar moves by Toshiba and Matsushita, which intend to cut investment in DRams and transfer it to LCDs.
Motorola insisted that its relationships with Toshiba and Siemens Nixdorf would not suffer. The joint DRam plant with Siemens, which is staying in DRam business, will sell Motorola?s initial 50 per cent of the DRam output, then Motorola will convert its share to produce proprietary fast SRam.
Clark denied rumours that Motorola was pulling out because of differences with its fourth DRam partner, IBM, over their Power PC venture. IBM is said to have blocked Motorola?s access to 256Mbit DRam technology by forcing it to withdraw from the alliance it had with IBM, Toshiba and Siemens Nixdorf.
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