April 2001 Industry Update

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Memory

Prices for DRAM appear to be slowing inching upward, which would indicate better demand for PCs and components. This is good news for many of the beleaguered memory makers. As DRAM prices plummeted, so did profits for most memory makers. Samsung found themselves in an enviable position with their DRDRAM production, as profits are still possible there. Even Micron, who specializes in commodity DRAM manufacturing, found it difficult to maintain profitability the past few months.

At the beginning of April, Micron finally announced volume availability of PC2100 DDR modules through their Crucial Technology division, and reportedly the memory is literally flying off the shelves. Marketing campaigns have actually been put on hold because the company fears that the demand may outstrip their ability to manufacture it. Other manufacturers have also indicated that there is a strong interest, however as of a few weeks ago, the major motherboard makers were not reporting a large increase in motherboard shipments, so it is difficult to determine where the demand is actually coming from. Possibly the smaller manufacturers, such as IWill, who jumped on the bandwagon early are benefitting the most, or things have changed fairly dramatically in a very short period of time.

Rambus continues to be in the news, and continues to be a big wildcard in the industry. The seemingly see-saw battle with Infineon in court has both Rambus and DDR advocates alternately cheering and sweating. There is so much interest in the outcome, that it seems every court transcript is being publicized and discussed fervently. As with any court case, it is impossible to really know what the eventual outcome will be, but it appears that Rambus will come away with much less than they originally were hoping for even if they win. The major concern for memory makers is that if Rambus is awarded the rights to their DDR SDRAM claims, royalties could be fairly significant. Perhaps this is why users are rushing out to buy now, just in case?


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