October 12, 1998, Issue: 1130
Section: News
--------------------------------------------------------------------------------
Direct RDRAM: Paying the price -- Cost, availability could slow adoption across midrange platforms
Andrew MacLellan
Silicon Valley- With chip makers releasing their first Direct Rambus DRAM engineering samples, early industry cost estimates indicate that the emerging architecture is ... expensive.
Not prohibitively expensive, but costly enough to slightly retard the Direct RDRAM adoption track proposed by the technology's chief backers-Intel Corp. and Rambus Inc. Further blurring the market picture is the chip industry's ability to manufacture enough Direct RDRAM to meet the PC market's needs in 1999, according to one market research firm.
Six vendors are currently shipping 64-Mbit Direct RDRAM engineering samples, with prices from the likes of Mitsubishi Electronics America Inc. and LG Semicon Co. Ltd. set at $45 each. While sample prices are typically several times those of volume tags, an initial cost projection from leading DRAM vendors reveals that 64-Mbit chips will carry a 15% to 30% premium in OEM quantities.
With the great majority of next year's Direct RDRAM chips shipping in a 64-Mbit density, the premium will keep OEMs from including the high-speed device in all but the most performance-driven PCs, according to observers.
While this corresponds to Intel's own projections, adoption across the midrange PC segment may not proceed as quickly as the company had planned. Rather, given the architecture's cost structure, Direct RDRAM could be camped out in what Intel has categorized as the professional-class PC market well into 2000, according to analysts.
Only after computer makers begin adopting 128-Mbit DRAM late in 1999, and the Rambus chip premium drops to about 12%, will the midrange segment begin to respond, they said.
The adoption rate should accelerate further when Direct RDRAM premiums dip to about 8% with the advent of 256-Mbit chips, according to estimates from one memory supplier.
Rambus claims that half of its Direct RDRAM licensees in the memory industry will introduce the technology at the 128-Mbit level in 1999, but research firm Dataquest Inc., San Jose, said that out of next year's 3.3 billion-unit DRAM market, only 24 million 128-Mbit chips will ship.
"Right now, we don't have a very optimistic forecast for 128-Mbit," said George Iwanyc, an analyst at Dataquest. "We don't think there's a mainstream application driving the larger density."
Within the high-performance PC segment-to be served by Intel's Katmai processor and the K7 chip from new Rambus licensee Advanced Micro Devices Inc.-there is disagreement over the industry's ability to make enough Direct RDRAM.
Semico Research Corp., Phoenix., has cast a dim light on volume projections, estimating that vendors are equipped to produce a mere 33 million Direct RDRAM ICs in 1999. High-end processors shipping from Intel alone will require between 170 million and 200 million DRAM units, according to Semico analyst Sherry Garber. "You can't get there from here," she said.
An Intel spokesman said the company does not disclose CPU production estimates or related DRAM use.
Rambus countered with its own industry survey, which revealed a supplier base capable of making between 100 million and 200 million units. Falling roughly in the middle, Dataquest projects that Direct RDRAM will account for 2% to 5% of next year's DRAM market, which translates into 66 million to 165 million chips.
"We've talked to the DRAM companies, and we've added up the volumes they plan to make, and it appears to us to be north of 100 million units," said Subodh Toprani, vice president and general manager of Rambus' logic division, Mountain View, Calif. "And remember, these are plans being made in 1998 for products shipping in 1999."
Whether the issue is one of availability or demand or both, executives at several chip makers agreed that Direct RDRAM volume growth will ultimately depend on a tightening of DRAM capacity and a return of control to the hands of memory suppliers.
"Really high volume for Rambus doesn't kick in until we have higher-density parts and a situation of better balance in the market," said Cecil Conkle, assistant vice president of DRAM marketing for Mitsubishi's Electronic Device Group, Sunnyvale, Calif.
Hoping to alleviate some of the early pricing concern, Conkle noted that OEM component buyers should take the long view when comparing Direct RDRAM to its main-memory predecessors. "Fundamentally, I think it's fascinating to talk about the pricing differences," he said. "But Rambus isn't really a DRAM cell anymore; it's a system cell, and [OEMs] need to look at their performance improvement from a system level."
Because Rambus chip samples are just starting to roll out, PC performance data is not yet available.
With Hyundai, LG Semicon, Mitsubishi, NEC, Samsung, and Toshiba all shipping Direct RDRAM samples, pressure is building on every front for a smooth transition to the new architecture. But some companies are now saying they will stand fast until OEM demand becomes more apparent.
Though it isn't expecting samples until next year, Fujitsu Microelectronics Inc. last week said it's taking a wait-and-see approach to the Rambus architecture. The company is not a major DRAM supplier to the PC market and may be better able to resist what it described as pressure from Intel for a swift transition to Direct RDRAM.
"Whether or not we're going to roll out products is still unclear because we want to make sure we get a good return on our investment," said John J. McElroy, vice president of marketing at FMI, San Jose.
Copyright ® 1998 CMP Media Inc.
|
