Tuesday, November 27, 2007

Hynix Partners with Siliconfile

Digitimes: It's official now. As many have predicted, Hynix signed a partnership agreement with Siliconfile. With all its recent advances, Siliconfile is probably too expensive for troubled Hynix to acquire outringht. So Hynix will acquire just a portion of Siliconfile's equity to strengthen the relationship.

Hynix will manufacture and sell CMOS sensors using SiliconFile's design and will provide foundry services to SiliconFile. Both parties plan to cooperate on product development thereafter.

Siliconfile projects that its annual sales to hit US$65 million in 2007, up from US$24 million in 2006. Siliconfile holds approximately 8% share of the mobile CMOS sensor market. It employs more than 40 experienced engineers, as Hynix said. It's impressive achievement for such a small team to capture so large market chunk.

There are clear winners and losers in this marriage. The most immediate loser is Dongbu, the former Siliconfile's foundry. Dongbu has been with Siliconfile since its inception in 2002 and now it has lost its only big CIS customer. So Dongbu left with a significant knowledge in pixel design and ready to use image sensor IP blocks, like ISP. One can expect Dongbu would try to find some use for it.

Hynix has found the best fit for its CIS program. I'm sure that Siliconfile will propel Hynix to the first league of image sensor manufacturers. However, it might take a year or so for technology transfer. It's probably too late for Hynix to enter to 1.75um pixel generation. I wonder whether Hynix-Siliconfile can provide a competitive advantage in 1.4um pixel.

Siliconfile on its side can enjoy much more advanced process capability of Hynix, so its chances to design a competitive 1.4um pixel are not negligible.

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