February 2000 Industry Update

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Rambus

There have been quite a number of conflicting stories regarding DRDRAM, and industry support (or lack thereof). Despite claims to the contrary, Intel is still pushing the technology and working hard to get manufacturers on board. The most loyal Intel partners are also continuing to sing the praises of DRDRAM to the press.

Unfortunately, when I speak with industry insiders there is quite a bit of concern about whether DRDRAM is a dead-end for the PC market. Currently, Samsung is the only source of Rambus DRAM, and their yields are at about 30%. They are anticipating that to improve to 70% by Q4, however without shipments from other manufacturers the price will remain quite high until then. While Samsung indicates that they are seeing a lot of demand, they also admit that they have only dedicated 5% of their production capacity to the product, because of contractual obligations for ‘legacy’ DRAM parts.

Discussions with 3rd party manufacturers has revealed that availability of DRDRAM chips is so limited that they might as well not exist. These manufacturers have backorders with both NEC and Samsung, but NEC does not appear to have any product to ship at this time. In fact, it appears that Kingston may be the only module manufacturer receiving any reasonable quantities. Even motherboard manufacturers are having problems getting samples to test their boards with.

DDR

Though there appears to be increasing support for DDR, chances of it hitting the market before Q3 are fairly slim. Though DDR memory is available in limited quantities today, VIA has the only production chipset scheduled (we can’t count Micron’s chipset), and it won’t be available until late in Q2. It would appear that both DDR and DRDRAM may be starting to hit the market in volume at about the same time, which will certainly create an interesting dilemma for motherboard manufacturers.

SDRAM

Despite the marketing push for PC133 over the past year, PC100 is still the market leader in terms of sales. This is mostly due to the fact that 133MHz FSB processors are still very scarce, so OEMs are staying with PC100 memory. In the DIY market, PC133 seems to be gaining popularity, because it provides some upgradability and allows for better processor overclocking.

Although Intel originally had shied away from the PC133 spec, and then later indicated they would adopt a ‘modified’ version, the official word is that they have adopted the current spec without any changes. The Intel PR spokesperson I spoke with said that they looked at the spec and found that it had been done very well, so it needed no changes.

DRAM Prices

Since October, DRAM prices have been steadily dropping. At the end of January they were back to about $8 per 64Mb chip on the spot market, and have since dropped to about $6. The reason being given is that Samsung and a few other manufacturers were holding onto inventory hoping that prices would go back up above $10. A few weeks ago, they decided that this was a losing strategy, and began to unload parts onto the spot market. Micron, Toshiba, NEC and Hyundai also unloaded inventory in the past few weeks.

Looking forward, it is anticipated that prices could drop to as low as $4 before the ‘glut’ ends. After March, supply is expected to slow down and prices will again be on the rise. It is also expected that the release of Windows 2000 may create additional demand, though that is uncertain at this point. It may be wise to fill your memory needs during the next couple of months in case prices do go up.

Odds and Ends…

Last week, I received the following email regarding hard drive prices. Though I don’t keep up with these things, this individual obviously does….

Next week, I will have been gathering Hi-Tech USA disk pricing every week for 7 years. This past Sunday, the price of the “sweet spot” disk, the one with the lowest cost per megabyte, suddenly dropped to $138 (18.2G). I had to re-do the software so the vertical axis went from $450 to $125 (instead of the former lower limit of $150). In fact, the drop was so dramatic that I at first thought I had input a bad datum from the ad.

Over the first 6 years, disk prices in dollars/megabyte dropped at a fairly regular rate, halving in price every year. In the past 14 months, the rate of change has increased; the plotted data is now ~5 months ahead of the 2-1 trend line.

I started keeping track of HT’s pricing on 12 Feb 1993. I use their data because of the consistency of their pricing policy over the years and because of the frequency (like daily) of their ads, plus the largish number of items they advertise. In other words, although HT’s pricing is low, it is not the lowest – whatever is on sale at Fry’s is often a better buy, but that’s just one disk size for 2 to 4 days, as opposed to HT’s everyday consistent pricing…

As always, if you have reliable information, or see information published elsewhere that might be useful, please let us know by emailing info@realworldtech.com.

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