Still others believe that the potential value of U.S. Memories lies in its ability to revive the domestic chip-making industry by sparking renewed manufacturing of DRAMs, the chips considered to be the technology drivers of the entire semiconductor industry.
Because they are so critical to every computer, DRAMs represent 20% to 25% of the total chip market, analysts say. Further, and perhaps more important, the volume production of these chips leads to improvements in manufacturing technologies needed throughout the chip-making industry.
Initially, critics of the plan questioned whether the cooperative would violate antitrust laws. Cypress Semiconductor's Rodgers, who has been the most vocal opponent, promised to sue if the venture ever started producing products that competed with those made by Cypress.
But Kane says he has received legal opinions with assurances that the venture does not violate antitrust laws. In fact, Kane argues, the cooperative actually promotes competition because it introduces new participants into a market where currently only three domestic companies--none of which are participating in U.S. Memories--now operate.
"U.S. Memories may not be the absolutely right answer, but we won't know if we don't try," says Michael Borrus, director of the Berkeley Roundtable on the International Economy at UC Berkeley. "The venture is important because it's an experiment to see if we can develop new structural approaches or if we're simply going to give the market for these chips away to outsiders."
U.S. MEMORIES' RECRUITMENT STRUGGLE
Seven of the nation's largest high-technology companies are investors in U.S. Memories. The problem has been finding additional supporters; the proposed chip-making venture has not attracted a single new investor in the last six months.
Who's In Advanced Micro Devices Digital Equipment Hewlett-Packard Intel IBM LSI Logic National Semiconductor
Who's Out Apple Computer Cypress Semiconductor Micron Technoloty Motorola Sun Microsystems Texas Instruments Unisys
On The Fence AST Research AT&T Compaq Computer Dell Computer NCR Storage Technology Tandem Computer Tandy
