>>Katherine - Demand drives shrinks, not the other way around. For DRAMs,
which are by far the largest single segment (especially in unit terms, less so in
dollar terms), demand is very elastic. If you make them cheaper, people will
buy more of them: you can never have too much memory.
I humbly disagree. There are, IMO, two very independent drivers of shrinks. The
first is a desire to get faster, lower power chips (i.e. your 'demand'). The second is
to get more chips on a wafer and to produce more chips in the same amount of
time (i.e. cheaper).<<
Sorry, the original draft of the post said "market forces," not demand. That's what I get for editing too often. The sentence you quoted actually discusses your driving force #2, cost as a shrink driver. And, as I noted, demand proved extremely elastic in this period, with bit volume skyrocketing as cost/bit plunged.
>>I.e. a
decrease in the number of chips shipped can indicate either a decrease in demand,
or excessive shrinking and it is impossible to tell which without more data.<<
Except that the current "excessive shrinks" have *not* led to a significant decline in the number of units shipped on an annual basis. You're trying to find the reason for an event that hasn't actually occurred. Fluctuations on a monthly or quarterly basis are almost certainly *not* correlated to shrinks, because even "rapid" shrinks are gradual transitions, not single events.
Katherine |
