GSI Tech to Enter New Specialty Memory Chip Market

NEW YORK -(Dow Jones)- Specialty memory maker GSI Technology will introduce a memory chip designed for the gap between high-speed specialty memory chips and their slower, commoditized cousins.

The chips, called LL DRAM for "low latency dynamic random access memory," are designed for products that need a quicker start-up time, or latency, than high-end DRAM chips, but at a lower cost than the specialty chips the company currently sells to wireless and telecom companies such as Cisco Systems and Alcatel-Lucent.

GSI estimates the market for these chips, which is currently dominated by Micron Technology Inc.'s (MU) RL, or "reduced latency" DRAM product, is about $200 million a year, said Didier Lasser, vice president of sales for GSI. Lasser said GSI believes it can eventually nab about 40% of the market - a big revenue jump for a company with a $98 million market cap.

"For us, if we can get 40% of a $200 million market, it doubles the size of our company," Lasser said.

Still, the chips themselves are difficult to make, and GSI has yet to produce any. Many larger memory makers have exited this niche market, as its relatively small size and focus on design wins over production capacity and manufacturing convinced them to focus on their commodity businesses.

GSI plans to have the specialty chips in the market by early to mid-2009.

Shares of GSI were recently down 2.6% to $3.42.

- Jerry A. DiColo; Dow Jones Newswires; 201-938-5670; jerry.dicolo@dowjones.com

(END) Dow Jones Newswires

Posted to the site on 23rd September 2008