Test your DRAM IQ
By Jack Robertson
Electronic Buyers' News
(11/25/98, 11:47:29 AM EDT)
Get out your pencils and get ready for the 1999 market-forecast quiz on whether the global DRAM glut will continue:
On the supply side, will the South Koreans abandon their self-professed DRAM production cuts and ramp back up on idle capacity? If yes, add 1 point. Everyone can add 1 more point for the new fab capacity Samsung Electronics is building in Austin, Texas.
Everyone can also add 1 point for Micron Technology accelerating die-shrink transitioning at Boise fabs midyear, from 0.21 micron to 0.18 micron. Add another point for Micron starting to bring on upgraded (0.21-micron) die shrinks at former Texas Instrument fab complexes later in 1999.
Will the chip merger of South Korea's LG Semicon and Hyundai Electronics Industries be consummated? If no, subtract 1 point to reflect the two companies' unresolved financial straits. If yes, still subtract 1 point because of post-merger turmoil.
Add 1 point for each major 64-Mbit fab with wafer-start capacity of at least 15,000 per month that's shifting 100% to sub-0.25-micron die shrinks.
Do nothing on 5- and 6-in.-wafer fab closings. These trailing-edge fabs are now inconsequential in global supply. OEM buyers of 64-Mbit DRAMs also don't figure on any closing of 16-Meg fabs. However, 16-Meg DRAM buyers should subtract 2 points to reflect rapidly disappearing supply.
Add 1 point if you believe Taiwanese DRAM makers will continue to ramp up. What will Japanese memory companies do? No points allowed, since it isn't clear at this point that the Japanese really know what they want to do.
If the new semiconductor spinoff from Siemens AG finds a partner of equal size for a more powerful alliance, score your own answer. It depends on whether you think the combine will pour on production to compete for world market share, or the alliance will join an exclusive club of DRAM giants, each with about 20% market share, acting to bring more order to the market.
On the DRAM demand side, estimate PC sales in the first half of 1999. Subtract 1 point if you think demand will increase from the current holiday-season fourth quarter, add 1 point if you say demand will decline. Estimate the 1999 sales trend for sub-$1,000 to $500 PCs, which use half as much memory as conventional PCs; add 1 point if you think sales of cut-rate PCs will continue to account for a larger portion of total PC shipments.
Will non-PC memory demand jump significantly? The answer is straight- forward: Non-PC memory demand will rise as long as glut and low prices continue. If supply balances demand (and prices consequently go up), the pace of non-PC memory buying will slacken.
Before you total your score, tack the quiz to the wall. Throw darts at the range of options in each question. Then add up the score for the darts. That's probably as good an outlook as any for the wacky DRAM market.
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