The move may place more pressure on MediaTek to lower its prices. MediaTek has been reluctant to cut its prices, even though systems makers are facing falling prices on their products, the sources indicated. To secure its market share, MediaTek is accelerating the migration of its PC-use solutions to 0.18-micron process technology and increasing its product offerings to include DVD-RAM solutions, the sources added.
According to the sources, other DVD-RW chipset solution providers, such as Philips Semiconductor, are also competing on price. By the end of the first half of 2005, the average selling price for 16x DVD-RW chipsets may fall 20% to US$8, and by year-end prices may fall 40%, the sources added.