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Niche strategy brings success in Taiwan

Posted: 17 Apr 2006 ?? ?Print Version ?Bookmark and Share

Keywords:Mike Clendenin? PC chipset? Austin Huang?

Coming from a PC chipset maker in Taiwan, Austin Huang knew that designing a great chip didn't always matter. Sometimes the worst product, in his eyes, nabbed the largest market share because it coupled acceptable quality with cheap pricing.

But he was looking to do something a little different. A few years ago, Huang and some colleagues moved over to Syncomm Technology, an ailing company that had failed to gain traction in the PAS/PHS chip market for cellphones. It also had some audio expertise. Huang began toying with the idea of baseband processors for wireless headsets and speakers. From the get-go, he wanted to compete on quality, not just price.

"From the [chipset] experience, we already know how to do things cheaper, but we don't always know how to do things better. So making things better was our starting point," said Huang, now Syncomm's president and CTO.

The company, which markets its chips under the Synic name, sells into many of the top-tier Japanese brands, from Sony and Onkyo to JVC and Pioneera clear sign that the strategy has worked. After a reorganization in 2003 that put its focus on wireless audio, Syncomm's revenue has jumped from a few hundred thousand dollars in 2004 to expectations of about $12 million this year.

Worthy of emulation
The story is one that many small companies in Taiwan would like to copy. Syncomm could have made a run for the mainstream Wi-Fi space, but chose not to, figuring it would get clobbered in a bloody market with top-tier competitors. "We knew that we were capable of designing OFDM so that we could get in and have a product, but the Marvells and Broadcoms today do not want to drop out of this market," Huang said. "There aren't enough new and profitable markets for them to jump into, so they are just lowering their prices."

The island's companies can buffet themselves against increasing competition at home and abroad by looking into niche opportunities with high barriers to entry that yield high-margin returns. In the wireless-headset space, Syncomm is a market leader. Now, it is eyeing wireless speakers, which may have huge potential as A/V system makers increase the push for 5.1 and 7.1 surround-sound home theaters.

The company is working on a handful of chips that will come out later this year. They include an upgrade for its high-end audio chip that migrates it from CD quality (48kHz, 16bits) to SACD quality (96kHz, 24bits) and a chip that supports 5.1-channel sound, microphone and multiroom wireless.

At the end of this year, Syncomm expects to move into video applications for security and for delivery of standard definition to secondary TVs.

- Mike Clendenin
EE Times

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