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Sony gets out of SRAM biz via GSI deal

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CIOL Bureau
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SAN JOSE, USA: Hinting at a possible consolidation in the SRAM market, US-based SRAM maker GSI Technology Inc acquired the assets related to Sony Corp.'s SRAM product line. The forthcoming NEC-Renesas collaboration would add to the talk of consolidation in the SRAM market place.

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According to report quoting Edwin Mok, an analyst with Needham & Co. LLC, the new deal is seen as doing away with Sony as a competitor for GSI. It may be recalled that Japanese chip makers NEC Electronics Corp and Renesas Technology Corp, so close to a deal, have yet again delayed the signing of a merger agreement until the end of September.

Now with the GSI-Sony deal strengthens GSI's leadership in the SRAM market, and most probably capable of opening new opportunities for the company in future, the consolidation game has begun.

The GSI deal has, in the meanwhile, pushed Sony out of the SRAM business. However, it also needs to be noted that 'Sony hasn’t been a huge player in SRAM, as it only sells SigmaRAM. As GSI's high-speed SRAM is based on the same standard, the deal might result in a natural fit with very little integration risks SigmaRAM is a family of SRAM products jointly defined by the SigmaRAM Consortium.

The GSI–Sony deal has come about an agreement worth close to $5.2 million in cash. GSI will make a further cash payment to Sony of approximately $1.7 million following a post-closing adjustment to reflect actual product inventory on hand at closing, an EETimes report pointed out.

It is also being said that GSI will also make future cash payments based on the sale of certain acquired SRAM products over an eight quarter period.

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