June 2001 Industry Update

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Memory

DRAM prices are still at an extreme low, causing even Micron to lose money. Micron has always prided itself on being able to produce commodity DRAM parts at a very low cost, but the PC slowdown has really caused prices to plummet. When one can purchase a gigabyte of memory (using 128Mb chips) for under $250 directly from Crucial Technology, you know that things are very tough for manufacturers. Think about it – that is a price of under $4 per chip, not even considering the price of the PCB, assembly and testing!

DRDRAM is still about twice the price of the equivalent SDRAM module, but this is somewhat misleading because of the current condition of the PC market. Intel believes that DRDRAM will carry only about a $15 price differential over SDRAM by the end of the year (128MB modules). Intel is still committed to DRDRAM, and their efforts do appear to be paying off a bit, with strong sales reported in Japan. It remains to be seen whether North American sales will follow or not. Europe will likely continue to favor AMD and DDR, as they currently do.

As mentioned in the motherboard and chipset section, VIA seems to have really created themselves a problem with their lip service, but lack of follow through with DDR. It has generally been known that DDR was really a sort of transitional product to get to DDR II. However, there still seems to be no real agreement on what technologies DDR II will actually contain, with some believing it will be the Ramtron eDDR, or some modified form of SLDRAM, or more likely a combination of several different technologies. As mentioned last month, MRAM is being looked at as a long term replacement for DRAM, but that is still several years away at best.

Suffice it to say that SDRAM will continue to dominate the market through the end of this year, simply due to pricing and availability. DDR does have the edge on DRDRAM in terms of market acceptance and pricing, but Intel is very aggressively promoting the P4. If Intel succeeds in their plans, P4 will be mainstream by year end, and DRDRAM will be much more prevalent. If this does occur, watch out for Intel pushing back their DDR implementation another quarter or two to see if they can finally get DRDRAM to succeed.

Miscellaneous

There has been a lot of concern within the web publishing industry about a new Ziff-Davis online publication, called Extreme Tech. At one point last year, it was rumored that ZD was trying to purchase Tom’s Hardware Guide, but the deal fell through. Now they have developed their own publication with seasoned technical journalists and a great deal of marketing muscle. Obviously, this is seen as a serious problem for established popular online computer technology publications that focus more on quantity of material than technical expertise, however even the more technical publications are worried that ZD can take scarce advertising dollars away, and probably for good reason.

In looking over the publication briefly, I believe that this is actually a good thing for the industry. A number of online publications have been able to get away with shallow, and sometimes misleading, product and technology reviews because there have been few real alternatives. I believe that the good quality publications that currently exist (large or small) have more to worry about with the economy and industry in general than this new hardware site. However, there are others that either need to improve their practices and technical expertise or possibly fall by the wayside. Those that seem to have the greatest exposure are the ones that focus on light technical articles and reviews geared towards the average consumer, since that appears to be the target market for this new publication.

On another note, I will be taking a short hiatus from this column, so the next installment will probably be sometime near the end of August, or perhaps early September. This will allow me to focus on some other projects that I have been wanting to get to. Depending upon how successful those are, this may become a quarterly, rather than monthly, column. I will, however, likely do some special reports on specific subjects between installments.


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