To counter competition from Taiwan-based USB 3.0 chipmakers, Japan-based chipmaker NEC reportedly plans to significantly cut prices for its first- and second-generation USB 3.0 chips in the fourth quarter and will launch its next-generation models with a price below US$2 in the first quarter of 2011, according to industry sources.
NEC currently already has an over 90% share of the USB 3.0 market and its price cut in the fourth quarter is expected to help further strengthen its position. In the first quarter of 2011, the launch of the company’s third-generation USB 3.0 chips, which feature higher performance and lower power consumption with mainstream price points, should help the company avoid price competition from other chipmakers, the sources noted. Although the price cut strategy is expected to damage NEC’s profits, the company’s income from IP licensing fees should help cover the losses. Currently, Intel, AMD and Microsoft are all clients of NEC’s USB 3.0 IP.