Toshiba Plans To Sidestep DRAM Glut, CEO Says
(07/27/99, 11:17 a.m. ET)
By Jack Robertson, Semiconductor Business News
Although DRAM prices had a small uptick in the last few weeks, the unrelenting global glut will prevent pricing from changing much for the rest of the year, according to BobBrown, president and CEO of Toshiba America Electronic Components.
"I don't see the DRAM oversupply changing for the rest of the year," Brown said. "Although DRAM prices improved slightly in the last few weeks, I don't think this is a permanent trend."
He said the Big Three DRAM companies -- Micron Technology, Samsung Electronics, and the new Hyundai Semiconductor formed through a merger with LG Semicon -- are all ramping up production.
"Yet at some point in time, people have got to realize they must start making money in this business," he said.
Brown reiterated Toshiba's strategy of scaling back sharply on price-battling 64-megabit DRAMs to concentrate on higher margin 128-Mbit chips, Direct Rambus DRAMs, and embedded DRAMs. He said by the end of the year, Toshiba will be producing only about one million 64-Mbit chips a month, while ramping up 128-Mbit products to four million to five million a month.
Asked if 128-Mbit DRAMs could become another pricing football as rivals ramp up production sharply, Brown said: "At that point, we will shift to the next-generation DRAM product."
Brown said Toshiba expects to produce several hundred thousand Direct Rambus DRAMs of the highest speed -- 700- to 800-MHz versions -- in the fourth quarter.
Toshiba is also in the unique position of having a ready market for 600-MHz Direct RDRAM versions in the Sony PlayStation-II game players. The PC industry has shown virtually no interest in the 600-MHz chip, Brown and other chip maker officials agreed.
Brown expects the 700- to 800-MHz Direct RDRAM modules will carry about a 30 percent premium over wide-bandwidth SDRAM DIMMS with comparable data-transfer rates. The Toshiba official said the early Direct Rambus adopters will initially be high-performance desktops and workstations that can readily pay the premium price.
A major market battle is shaping up in the next year, according to Brown, as Direct Rambus and both single and double data rate SDRAMs compete for the mainstream desktop market.
By next month, all of Toshiba's fabs will have moved to 0.20-micron processing, Brown said. The current production lines, using 248-nanometer krypton fluoride laser lithography, are expected to extend down to 0.15-micron processing, cutting additional capital investment to no more than 10 percent per chip generation, he said.
The company will also increase its chip product mix to increase output of NAND flash, in which Toshiba has a 55 percent global share, Brown said. The company now produces 1.2 million NAND flash units a month at its Yokkaichi fab in Japan. This will be boosted to 1.85 million a month by the end of the year.
Toshiba previously said it will use the capacity it will take over from IBM next year at Dominion Semiconductor in Manassas, Va., to convert from DRAMs to flash for the first time in the U.S. fab. Toshiba is buying out the 50 percent IBM interest in the Virginia fab over a phased purchased over the next 18 months.
Toshiba also expects to accelerate its target of producing a 20-million-gate ASIC with embedded memory to three years from the originally projected five years, Brown said.
"The limiting factor is not process technology, it is tool drivers [to design such a chip]," he said.
This embedded-memory system-on-a-chip could have as much as 64-Mbytes of DRAM, 256-Mbit SRAMs, a Mips Technology RISC processor core, and various configurations of analog, synthesized logic, and high-speed I/O.
More immediately, however, Toshiba will introduce an ATM switch family on Aug. 9.
Brown said Toshiba has no plans to spin off its chip operations in a separate company. He repeated assurances from Toshiba corporate offices that an official surfacing such a concept was only speaking for himself and not stating any company policy.
But Brown added: "In Japan, there is a word: nanademoari -- 'everything is possible'. But I don't see any decision at this time." |
