Memory Corp is to move further towards a retail and ecommerce model as it concentrates its resources on consumer electronic devices.
The company is not expecting to increase its revenue or market share in DRam significantly over the next few years, as it looks to transform itself into an internet content distributor.
The move away from traditional PC memory was prompted by the continuing instability of a market which has seen prices crash and skyrocket within a few months. Risks of heavy losses have also increased due to the availability of new memory types, such as Rambus and Double Data Rate memory.
Alan Sinclair, chief technical officer at Memory Corp, said: "The development of DRam architecture is becoming less predictable. We have been used to the three-year boom-bust cycle, but as we go forward there is uncertainty as to the relative success of Rambus, PC133 and Double Data Rate memory. When it takes three years to set up a fab, you don't want to back the wrong horse."
The wrong move in DRam could be disastrous for a company that only started to turn in a profit in the last quarter of 1998. But Memory Corp believes it has found the right roadmap for profitability and the recent acquisition of ModTech is instrumental in its shift to consumer devices.
The company will initially shift its attention to Flash memory, demand for which is finally taking off through the take-up of digital cameras and mp3 players. It will then move towards internet-enabled consumer devices using technology from ModTech, before becoming a fully-blown content provider for the devices it produces.
David Savage, chief executive of Memory Corp, said: "This is the first time that we have had a five-year vision for the company. We believe we know where the market is going to go in that time. Three years ago, we only had a one-week vision - to stay in business."
Sukh Rayat, managing director of distributor Flashpoint, said: "Realistically, you can't predict what the market will like be in five years' time. It's an ambitious move, but also a big gamble."
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