Memory making a comeback?
By Michael Kanellos
Staff Writer, CNET NEWS.COM
July 31, 1998, 1:00 p.m. PT
The memory chip industry may be making a comeback, fueled by plant cutbacks, the proliferation of high-performance technology, improved manufacturing, and most of all a substantial increase in the amount of memory PC makers are putting into their systems.
A rise in prices for 64-megabit chips began last month, according to Kipp Bedard, vice president of corporate affairs at Micron. Prices for 64-megabit DRAM (dynamic random memory access) chips bottomed out at between $7.50 to $8.10. Now, 64-megabit DRAMs are selling for $8.00 to $8.50.
DRAM is the principal type of memory in PCs today, and the 64-megabit variety is becoming the most widely used chip. By early October, 64-megabit DRAM chips will oust the current 16-megabit standard.
Increasing use of memory is one of the more significant factors in the recent rise in prices, Bedard said, as cheap memory has prompted computer manufacturers and device makers to load up their machines with as much as possible.
Earlier in the year, PCs were projected to contain an average of 55MB (megabytes) of DRAM. Instead, the computer now contains an average of 64MB and will rise to around 83MB by the end of the year. More megabytes per machine indicates more 64-megabit chips are being employed.
As a result, Micron's memory inventory has shrunk from four weeks in May to a relatively manageable level today. "We are significantly lower than the three-and-a-half weeks it was month ago," he said. "DRAM is cheap."
A second major factor has been the development of faster memory chips. Memory for the 100-MHz system bus--a conduit for shuttling data between the processor and memory--is featured with Intel Pentium II chips running at 350 MHz and above, as well as certain K6 chips from Advanced Micro Devices. The 100-MHz bus is optimized to work with a different type of DRAM than the memory made for the older 66-MHz system bus, used on PCs since the first Pentium-based PCs came out in 1993.
A 64-megabit DRAM chip compatible with the 100-MHz memory sells for $1.00 to $1.25 more than its 66-MHz counterpart. Chips with 133-MHz compatible memory will follow, Bedard said.
Manufacturing also appears to be working in Micron's favor. The Nampa, Idaho, company has been shifting to more advanced 0.25 and 0.21-micron manufacturing processes, which allows it to produce more chips per silicon wafer without increasing cost. "We have not increased wafer starts, but we have boosted bit growth by 80 percent," he said.
But while the increase in prices is viewed favorably, analysts are wary of calling this a general recovery.
"Prices may be up for Micron, but not for the rest of the industry," added Mark Giudici, director of the semiconductor supply and pricing service at Dataq |
