Hynix allocation move startles DRAM market
By Jack Robertson
EBN
(01/30/02 16:31 p.m. EST)
Hynix Semiconductor Inc.'s move on Tuesday placing all its DRAMs on allocation was greeted with some raised eyebrows and skepticism in the industry, but also some concurrence that the memory chip supply is tightening markedly.
Farhad Tabrizi, Hynix vice president of world wide marketing, insisted to EBN and customers that the sudden imposition of order quotas wasn't a public relations stunt as some critics alleged.
"The DRAM market is extremely tight on all product types. We are having to refuse large orders because we simply can't make deliveries. When you have to say 'no' to customers, that's allocation," he said.
Tabrizi said DRAMS sold to the graphics market, where Hynix has a strong position, are in short supply. "We can't supply enough x16 and x32 graphics DRAMs. We have been shifting production from PC DRAMs, and that is creating shortages there. The explosive demand for DDR for PCs has caused us to shift production from single-rate SDRAMs and that is causing shortages in those products," he added.
But not everyone in the supply chain agreed. Grant Johnson, manager of marketing intelligence for Converge Inc., Peabody, Mass., said memories are tight in the spot market but his firm is able to deliver whatever product is ordered. "I haven't seen any other producers on allocation. Most are still delivering to the spot market, although perhaps not in as large quantities as a few months ago," he explained.
Ironically, Johnson claimed that "we have a lot of Hynix products available now. I don't know why they should claim they have to go on allocation."
Sherry Garber, vice president of Semico Research Inc., Phoenix, said "there is an adequate supply of DRAMs in the market, although it is tight for certain types. Customers may have to wait one or two days now for delivery. Compared to immediate delivery in the past, that may seem like a shortage, but they are getting product.
"I was surprised by the Hynix announcement. Maybe they are trying to change their industry image as a low-price vendor," she added.
Mike Sadler, Micron Technology vice president of sales, said he wouldn't characterize Micron as having any products on allocation, but on some selected devices the firm hasn't been able to agree to deliver the full level of quantities the customer wanted.
On these orders, he estimated the gap betrween what Micron can deliver and the customer wanted is in the 10% to 20% range. Onother products the strong market in the last two months has whittled down Micron inventories to the bare level the firm believes it needs to support customers.
However, he said Micron is continuing to sell to the spot market, where Hynix has claimed it has stopped making any shipments.
Nam Kim, memory specialist for iSuppli, El Segundo, Calif., concurred with Hynix that supply of some types of DRAMs may be in such short supply as to justify allocation by the Korean chip maker. However, despite Hynix' insistence that it stopped selling to the spot market a month ago, Kim said there are still Hynix parts available on the commodity exchanges.
No other DRAM supplier has yet announced allocation of DRAM parts. However, Infineon Technologies came close. Peter Schaefer, vice president of Memory Products, asked if his firm was going to follow Hynix' lead on allocation, replied, "Due to strong demand Infineon's DRAM inventory has adjusted down in the last eight weeks. This necessitates that we work with all of our customers to assure that we meet their requirements."
Officials of Samsung Semiconductor Inc., San Jose, Calif., and Elpida Memory, San Jose, Calif. were both out of the country Wednesday and unavailable for comment. Micron Technology has not yet replied to inquiries.
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