Micron Market Share at RISK
by: stk_hawk 05/19/01 10:20 pm EDT
Msg: 284026 of 284043
Remember about a year ago when it was reported that Intel had invited all of the memory manufactures together to discuss RDRAM production in preparation for the P4 launch? Remember the resulting FUD attack and BOGUS reports that all the memory manufactures were not happy and they were not going to support the ramp because RDRAM cost was too high? Remember what Jack was reporting on this?
Well I guess all of those memory manufactures were not in sync after all. In fact, Samsung saw a HUGE opportunity to partner with Intel when their primary competition, Micron, chose to back DDR in the face of Intel's desires. Micron was clearly feeling over-confident with the AMD/Via/PC133 success and they must have felt they could force Intel into supporting DDR in a similar fashion. Unfortunately for Micron, they did not realize Intel would regain the CPU clock frequency lead with the P4. Couple this with a market slow down and a strong desire by Intel to replace the P3 quickly and you have a MAJOR BLUNDER by Micron.
So where is Micron today?
- Loosing money on SDRAM
- No significant DDR market to sell into because no P4/DDR chipset is available
- Totally at the mercy of Intel to introduce a P4/DDR chipset
- Competition making a profit on RDRAM
The Micron BLUNDERS Continue:
Unfortunately for Micron, the blunders continue with the law suit filed against Rambus. Again, Samsung seized the opportunity to give themselves a competitive advantage. So what did Samsung do, they signed a license agreement with Rambus. If Micron looses the case, Samsung ends up with a long term competitive advantage because their royalty rates will be less than Micron. If Micron wins, Samsung can stop paying royalties on SDRAM and DDR to Rambus without paying the massive legal fees. For Samsung, it's a win/win either way! What was Appleton thinking?
Now our friend Jack likes to spin the notion that Micron and the three Amigo's have some sort of competitive advantage because they are not paying royalties on SDRAM and DDR. However, what Jack FAILS to point out is that the three Amigo's are burning money OUT THE WAZOO on legal fees. These legal fees are certainly higher than the quarterly royalty payments Samsung is paying.
Make no mistake about it, Samsung is out to TAKE market share from Micron and they have an excellent plan underway. They have partnered with Intel (the #1 CPU manufacture in the world with 80% market share) and it is obvious Intel will continue to back RDRAM strongly as long as Samsung continues to drive the cost of RDRAM down. It is a win/win for both companies and Rambus is along for the ride.
IMO, Micron is in a world of hurt and will probably have to eat crow if they want to survive. |
