March 2000 Industry Update

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DRAM Update


At IDF, Intel made it quite clear that they would be fully supporting DRDRAM in their future chipsets, including Tehama (for the Willamette) and Timna (the low-end integrated chipset). The spirits of those behind Rambus raised significantly after this, and the push began anew to get manufacturers on board.

Following IDF, there were several major manufacturers who publicly gave their support of the memory technology and indicated they would ‘soon be manufacturing’. Privately, however, most of these manufacturers are less than enthusiastic about the market.

Currently, only Samsung is making DRDRAM in any quantity – approximately 2 million units per month. NEC indicates that they are shipping, but have provided no details. Sources within the industry indicate that NEC seems to be having some serious yield problems, and are having difficulty getting their modules qualified. Estimates give March shipments by NEC at no more than 120,000 units, and even these are non-ECC 128Mb chips. Infineon announced after IDF that they would be shipping ‘very soon’, but even the most optimistic estimates indicate they will ship no more than NEC next month.

Other manufacturers also announced support – most notably Hyundai, who claimed they intended to be the ‘market leader’ in DRDRAM production this year. Unfortunately, it takes some time to produce the chips, and obviously the process needs to be refined to get decent yields. Samsung has been manufacturing since the middle of 1999, and their yields are still at 40% (for 800MHz). This is, however, a big jump from last month where they were getting only 30%. The expectation is that they will get to 70% by Q3.

With shipments still being somewhat limited, the issue is whether the prices can drop sufficiently to grab any significant market share by the time DDR is expected to debut late in Q3. According to a Samsung spokesperson, Dell made a firm commitment in October 1999, right after the i820 chipset had been ‘recalled’ for the second time. They used this situation to secure exceptionally good pricing, and guaranteed availability. Currently, Dell gets about 70% of all Samsung production, and at a price nearly 50% less than anyone else does. This means there is very little product left for other OEMs, and other manufacturers are simply not rushing in to ‘fill the void’.


DDR appears to be picking up steam within the industry. Both VIA and SiS are expected to have DDR chipsets by mid-year (or early in Q3). Sources close to Micron indicate that they are currently sampling 200MHz DDR modules, and they are stable and working – with 266MHz not far behind. A Samsung spokesperson indicated that they are also sampling DDR Though optimistic estimates say that DDR should be available in quantity sometime in Q3, these sources indicated that Q4 would be a ‘safer’ bet.

One interesting bit of info is that by using an FPGA form factor (rather than TSOP), the price can be dropped to almost the same as SDRAM. The only issue today is soldering the parts onto the PCB – but these sources indicate that this should be solved fairly soon.

DRAM Prices

64Mb SDRAM prices steadily dropped during February, and are now hovering just above $4. Right now 64Mb parts make up the bulk of SDRAM chips produced because the yields are very good, and there are very few applications that require 128Mb chips. This price drop has been mostly blamed upon the Pentium III shortage (which Intel says is due to ‘record shipments’) that caused overall sales in the industry to drop by 10% or 20% over prior months.

A combination of both lowered Pentium III/Athlon prices, and a perception of rising prices did cause a bit of an uptick in demand (and therefore prices) at the end of February, however the past week showed a return to the downward price trend. Manufacturers are currently hoping that the sudden availability of Pentium III processors in the channel will spur a demand for memory during March, with a corresponding rise in prices.

As a final bit of info, Micron was relieved of all dumping charges in Taiwan last week, which gave them a bit of a boost. Apparently, they had been holding aside a bit of cash to pay any fees assessed, which is now available for investment, bonuses… or, if I might be so bold as to suggest it… rebates ;-).

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