Excerpts from Semibiz News:
Get your DRAM orders in fast
It's like going back in the time machine. Whether they're real or just psychological, industry worries multiplied this week that the DRAM market once again was spiraling down into a shortage situation. A poll of executives at four big DRAM makers concluded that none of them could take any more orders for SDRAMs for the rest of the second quarter. And it will probably get worse.
Says Farhad Tabrizi, Hyundai Electronics vice president: "We're sold out, and our customers are rushing to lock up SDRAM deliveries for the third quarter when shortages are likely to be worse." Shortages obviously will push up prices. Once again, spot and OEM contract prices are inching up. Mainstream 64-megabit SDRAMs rose from $6.35 to $6.65 late last week. A memory shortage could occur in the second half, says Dataquest's Jim Handy, but just when that will happen is a tough call, he adds. Any shortages also would have a big impact on new products such as double-data-rate SDRAMs and Direct Rambus DRAMs. Memory producers are growing increasingly reluctant to divert significant output to these new products from the suddenly lucrative SDRAM production. Any slowdown in the ramp up of Direct Rambus DRAMs this year would prevent vendors from reducing their prices--something that has to happen if Rambus is to take off like Intel and Rambus hope.
"Rambus isn't going to enter the mainstream market until its large price differential over SDRAMs is drastically reduced," says one big chip vendor. "Because the majority of PC OEMs want to buy the cheapest memory possible, Rambus is going to have to cut the differential with SDRAM to nearly zero." And that's going to be a hard thing to do if DRAM shortages develop.
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Memory sales overheat entire chip market
Memory chips are selling so fast they're driving the entire global semiconductor market. Sales climbed to a record $15 billion in March, one-third higher than the same month last year and up 2.8% over the previous month, according to the Semiconductor Industry Association. The most dramatic increase came in flash memories, which shot up 197.5% in the first quarter vs. 1999.
DRAMs grew 33.4% in the first quarter vs. a year ago. Other fast growers were: Programmable logic sales rising 78% in the quarter, digital signal processors going up 53%, and application-specific MOS logic running 60% over last year. Asia-Pacific was the fastest growing region, jumping 46% in March over year-ago sales, while Japan was up 38%, the Americas up 25%, and Europe rising 29%, according to the SIA.
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