DRAM Feast Could Turn To Famine
By Steven Fyffe, Electronic News
Mar 02, 2001 --- The current glut of cheap DRAM could quickly swing to patchy shortages and higher prices as manufacturers juggle their product mixes and the battle between direct Rambus DRAM (RDRAM) and double data rate (DDR) memory heats up.
“In the April-May timeframe we will first start to see the signs of switching to next-generation memory,” said one industry veteran who now works for Infineon Technologies AG, Munich, Germany. “As companies adjust their product mix, there will be shortages all over the place.”
Shortages would be a blessing for DRAM makers plagued by plummeting average selling prices since the end of last year. The slowing U.S. economy could even be a good omen for DRAM companies that have traditionally bucked the prevailing macroeconomic trend, the source said.
“The memory industry has got a long history of having good times while the national economy is in bad times,” the source said. “I have no idea why that is, but it has been historically correct for about 30 years now.”
Many DRAM makers are now losing money on certain types of SDRAM. The rush to offload unprofitable product lines could cause some specific shortages, said Dieter Mackowiak, senior vice president of memory sales and marketing at Samsung Semiconductor Inc., a subsidiary of Samsung Electronics Co. Ltd.
“There will be a structured shortage,” Mackowiak said. “Everybody is trying to reduce 128Mbit SDRAM as much as possible because it’s not a profitable product right now, like EDO or RDRAM.”
Demand for RDRAM could also outstrip supply this year, even with Samsung, Elpida and Toshiba pledging to boost production, Mackowiak said.
Others said shortages could be more widespread and difficult to predict.
“That’s certainly a potential,” said Gary Swanson, senior vice president and general manager of the DRAM division at Hyundai Electronics America, the U.S. subsidiary of Icon, South Korea-based Hyundai Electronics Industries Co. Ltd. “It could effect some of the higher-density products if the forecast isn’t there. Even traditional DRAM, such as PC-133 SDRAM, could be impacted.”
It wouldn’t take much demand pressure to swing the market back to undersupply, Swanson said.
“A lot of inventory is going to be burned off by the end of March,” he said. “The portable industry is really taking off, and our large PC customers, their inventories look to be at reasonable levels. And Hyundai’s inventory is not very large. We don’t have two-months’ worth of inventory. If the market picks up at all, you could start seeing mix issues start to surface.”
Others were skeptical of the shortage theories, labeling them wishful thinking.
“I wouldn’t say we’re seeing any kind of shortages,” said Jeff Mailloux, director of DRAM marketing at Micron technology Inc. in Boise. “We’re just trying to get our mix to match up with what our customers are expecting. I don’t really foresee any big issues with the DDR ramp. The DDR ramp is going pretty smoothly and there’s a lot of flexibility there. In terms of total DDR supply and demand, there’s pretty good supply vs. demand. It’s a matter of getting good forecasts from the customers. But there may be some short-term mix issues.
“There are some customers that are starting to talk about longer-term plans and getting the right mix of DRAMs. The fact that people are starting to think about their supplier for the fall is a good sign.” |
