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Many of these companies also had reasons to dislike the move to software-based systems that run on commodity chips, or have close business relationships with Cisco.
Facing mounting losses on commodity chips, Toshiba, NEC, Hitachi and other Japanese companies are taking steps to exit that end of the market and concentrate on made-to-order chips that command higher profit margins, but also require high investment and offer fewer economies of scale.
That's going to encourage more consolidation, especially on commodity chips like DRAMs.
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As a standalone company, it has invested in impressive new production facilities at plants in Dresden and Regensburg.By specialising in high-value chips, rather than commodity chips, and by focusing on designing chips for specific industries, Infineon has largely avoided the brutal competition from Asian producers that has wiped out much of Europe's chipmaking capacity.
The Boss. [C8.] Toshiba to Exit Commodity Chips Toshiba, the Japanese chip maker, announced that it would exit the commodity memory chip business.
And other Asian producers, notably in South Korea and Taiwan, can make commodity chips more cheaply.Some Japanese chip makers, including Fujitsu and Mitsubishi Electric, have been abandoning commodity production wherever possible.
We're using commodity chips that you can take off the shelf.
We took advantage of these cheap commodity chips and we just wanted to make it work".
While Cisco is better known as a maker of network switches and routers that rely on custom-made semiconductors, this business has been under pressure from new competitors that sell machines built with commodity chips.
At the same time they want to diversify from commodity chips into advanced chips such as processors and chips for mobile telephones.
Toshiba follows Hitachi and others in backing away from commodity chips in favor of higher-end products like the sophisticated chip sets used in cellular phones.
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