Spot prices for DRAM were somewhat soft during the month, moving up and down from about $5.50 to just a little over $6.00. However, several manufacturers indicated that orders for Q3 have increased, and OEMs are beginning to build inventory in anticipation of an increase in demand. Recently, there were reports that a large Taiwanese OEM had purchased a large quantity of DRAM from Micron at prices above spot, due to shortages in the market. This may have been because Micron was not selling any memory in the spot market during the month of May.
There seems to be a very controlled sense of excitement in the industry regarding DDR. Micron has apparently been delaying the introduction of their DDR toolbox for several weeks – perhaps at the request of chipset manufacturers – but I was informed very recently that it will be officially announced very soon, to be followed shortly by official benchmark numbers.
Right now, most manufacturers, including Micron, are choosing to remain relatively low-key on the subject, for several apparent reasons. The first is that they don’t want to have their marketing campaigns peak too soon, such as what has happened to Rambus. It is a very difficult thing to regain momentum after generating market enthusiasm, failing to deliver on time and then have to try and pitch the same ‘old’ technology again. The second, of course, is that staying out of the spotlight means that they are a much more difficult target for any possible anti-DDR campaigns that could be launched by Rambus or Intel.
As mentioned in the chipset section, Micron appears to be willing to put whatever effort they need to get DDR out into the market place. With the position that Micron has right now in the memory market, and with DDR being the new, sexy technology (which is where Rambus was last year) it could mean that DDR will quickly grab a relatively large percentage of the market very quickly.
Things are looking somewhat bleak for Rambus right at the moment, though much actually depends upon how well Willamette does in the marketplace. Though prices dropped fairly significantly during May, there does not appear to be any good reason, other than perhaps manufacturers trying to get rid of inventory.
An NEC spokesperson indicated that they have reduced wafer allocation for the 128Mb RDRAM and shifted it to 128M SDRAM due to very strong demand on that product vs. the 128Mb (non-ECC RDRAM). However, it was also stated that they expect the demand for ECC (288Mb generation RDRAM) to improve, and they have no plans to stop production, with 256Mb/288Mb parts on their roadmap.
On the other hand, Micron has indicated that they will be offering DRDRAM in Q3 (finally). There was no reason given for that timeframe, but it seems coincidental that this is when they expect to be shipping DDR in volumes. It turns out that they have been manufacturing parts for some time now, but simply have not been selling them (or even sampling them). This would make sense, because if DRDRAM had actually gained significant market share, Micron would have been in a position to quickly ramp production. In this case, however, it almost appears to be more of a way to reduce inventory and recoup some of the development costs of the product rather than an attempt to build a market position – but that is simply a guess based upon the apparent lack of commitment Micron has given to DRDRAM to this point.
A very well connected source has informed me that Dell has confirmed commitments to a contractor for a motherboard that supports the Duron processor. The numbers spoken of previously were 200,000 units for Q3. If this is true, it would be quite a blow for Intel and quite a shot in the arm for AMD. Unfortunately for most of us, it will likely be at least several weeks before there can be any confirmation of this rumor.
Other reports have indicated that Apple is producing their new IMAC models, and are anticipating strong demand. In addition, contractors for both Dell and Intel have reported an increase in orders for Q3. Though there has been some talk of a slowdown in PC sales during the past few months, these sources seem to indicate that there should be a rebound in Q3, though this may simply be the result of some ambitious forecasting.
Demand for cell phones, pagers, PDAs and the like have been putting strains on the PC OEMs during the past several months because they all use the same suppliers for capacitors, resistors, etc. Availability seems to have improved this past month, however it may only be due to ‘seasonal’ slowdowns rather than any real increase in production. It will be quite interesting to see what happens mid-Q3 when demand for all of these products is expected to increase by 20% or more.
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