The rush to manufacture so-called "systems on a chip" has begun, as major semiconductor manufacturers struggle to increase their profitability and satisfy consumer demand for the devices.
NEC and Texas Instruments (TI) said over the weekend that they will increase their production of systems on a chip devices. TI exited from the unprofitable DRAM business last month and NEC continues to make memories but is seeking to diversify its range of semiconductors.
Systems on a chip devices combine digital signal processing, memory and controller functions on a single chip, yet offer smaller form factors and lower power consumption. At the same time, they do not require the massive, multi-billion dollar investment in fabrication plants that CPU manufacturing has in recent years.
National Semiconductor said in June that it will concentrate on producing such devices for the PC market, with companies including Acer expected to incorporate system on a chip devices in x.86 based appliances that cost around $200.
According to reports in the Japanese press over the weekend, TI is in negotiations with consumer manufacturers including Matsushita and will supply six million of the chips to the Japanese market in 1999. NEC also claims it can make two million chips by next year and that follows projections from both Toshiba and Hitachi that they will boost production of similar devices within a few months.
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