Analysis: The DRAM ride continues
By Jack Robertson
As if the erratic DRAM market didn't have enough surprises, are you ready for a few more?
Micron Technology Inc. could surpass Samsung Electronics Co. Ltd. next year in production of 64-Mbit chips, building 200 million units for the year vs. 180 million for the South Korean firm, according to International Data Corp.'s latest forecast. But both could be topped by the possible chip merger of Hyundai Electronics Industries Co. Ltd. and LG Semicon Co. Ltd.; the combined companies are capable of making 280 million 64-Mbit parts, according to IDC.
Actually, some analysts believe Micron could top Samsung's 64-Mbit output of 8 million devices a month by the end of this year. The U.S. memory maker is already yielding an additional 25% in 64-Mbit chips out of wafers manufactured on its 0.21-micron process. And late this year, Micron could be starting 0.18-micron production with an equivalent boost in chips.
Here's another surprise: Worldwide DRAM revenue in 1999 is expected to jump 60% over this year, to $25.5 billion. High-double-digit growth will be fueled mainly by a spike in sales of 256-Mbit chips, which are expected to reach $6.2 billion, according to Dataquest Inc. Everyone is looking at 64-Mbit devices to buoy growth-sales are expected to double next year to $14 billion, Dataquest said. But 256-Mbit demand is slated to rise nearly 1,400% from roughly $450 million this year.
That doesn't necessarily mean the memory gravy days are over for OEMs.
Unit output of 64-Mbit DRAMs will double or triple, depending on the individual producer. So, the smaller 60% hike in 64-Mbit DRAM revenue next year still hints that average selling prices will decrease.
That figures. The relentless shrink race is seeing to it that an ever increasing volume of 64-Mbit chips pours out of existing fabs. And prices and profit margins should be healthy for 256-Mbit chips, bringing a welcome relief to chip makers after the two-year DRAM bloodbath.
OEMs should be able to take premium-priced 256-Mbit DRAMs in stride. The next-generation chip will debut in their high-performance, high-margin markets as well.
The worry for OEMs, though, is how fast 256-Mbit demand takes off. They want 256-Mbit DRAMs to be small enough to fit in the same SIMMs and DIMMs as the current 64-Mbit chips. So, only DRAM vendors with 0.2-to-0.18-micron feature size shrinks will be able to meet this challenge. Many of today's DRAM suppliers won't be ready.
And 16-Mbit devices? Sales are expected to be down 60% this year from the $13.9 billion peak in 1997. Next year, sales are expected to drop another 40% to an estimated $2.9 billion.
And all this happened without the long-anticipated 64-Mbit price-per-bit crossover vs. 16-Mbit ever becoming firmly established. The price of both generations got so low that a crossover really no longer mattered.
Can you believe that?
edtn.com
reh |
