Fall 2003 IDF

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Market Outlook

The general consensus in the industry is that volume shipments of DDRII will start in the first half of 2004, primarily going to the server market. Since there are almost no registered DDR-400 DIMMs, there will be a built up demand for DDRII-400 to fill that role. There is also more price elasticity in the server segment, as compared to the desktop or mobile markets. The server market consumes about 20-30% of all DRAMs sold, with a definite preference for the higher density DRAMs [4].

Initially, DDRII will debut at a premium of 50-60% above DDR-400, in the first half of 2004. It is expected that roughly 8-15% of DRAM shipments will be DDRII in 2004, primarily due to the price premium and production costs. Hynix has estimated that DDRII costs roughly 20% more to produce, with most of this increase coming from three areas: die size, packaging tests and assembly. There is roughly a 5% die size penalty due to the features of DDRII, while packaging and assembly will increase by 26% and 100% respectively [2].

Figure 5 – Expected Price Premium over DDR-400 (Hynix)

In early 2005, the price premium over DDR-400 will drop to between 10 and 20% which will open the mobile and desktop markets to DDRII. It is expected that about 45-55% of all DRAM shipments will be DDRII, 40-50% will be DDR and 5% SDR. Micron expects 2005 DDRII shipments to exceed DDR (as measured in Mb), although it is unclear whether the rest of the industry will follow suit. Either way, DDRII will be the main memory technology in 2006, with about 75% market share. DDRIII will also debut in 2006 at 800MHz, but it is quite unclear whether DDRII-800 will exist. Infineon, Hynix and Samsung seem to expect DDRII-800 to ship to at least the mobile and desktop markets, with Micron, Elpida and Intel all taking a more conservative stance. Intel and Micron expect Fully Buffered DIMMs (FB-DIMMs) to be used in the server market for speeds above 667MHz, with Elpida planning on DDRIII to achieve 800MHz [1][2][3]. Either way, the future of DDRII will end at 800MHz in the most optimistic case and likely with a lack of registered DIMMs reminiscent of DDR-400.

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