Intel Approaches Japanese Firms About Making High-Speed Rambus Chips
Dow Jones Online News, Wednesday, February 03, 1999 at 09:54
TOKYO -(Dow Jones)- Several major Japanese semiconductor makers are
gearing up for the production of a more advanced dynamic random access
memory chip, and two of them say they have been approached by Intel
Corp. about funding for the activity.
Toshiba Corp. said Wednesday it had received a proposal from Intel
(INTC) concerning funding for the production of the Direct Rambus DRAM
chip, a high speed memory device developed by Rambus Inc. (RMBS) of the
U.S., but has yet to make a decision on the proposal. "We have just
started to study the proposal," Toshiba spokesman Keisuke Ohmori said.
Mitsubishi Electric Corp. also said it received a proposal from Intel
on the new chip, but declined it, at least for the time being. "Although
Mitsubishi Electric was approached by Intel Corporation with regard to
possible financing measures for production-related investments, we
declined due to the fact that we are able to achieve our current
production plan with our present capital investment levels," Koichi
Nagasawa, a general manager for Mitsubishi, said. "However, no decisions
have been made regarding the possibility of entering into such
arrangements in the future."
Intel officials in Japan wouldn't comment on discussions with any
specific companies. However, Masatoshi Mizuno, a spokesman for Intel,
acknowledged that the Santa Clara, Calif.-based industry giant is having
discussions with many companies on the Rambus chips.
"In general, the goal is to insure an adequate Direct RDRAM supply
for the personal-computer market segment," Mizuno said.
NEC Corp. (NIPNY) wouldn't say if it had been approached by Intel,
but noted it was "looking toward" more advanced memory products and was
"thinking about third-party investment in next generation facilities."
Hitachi Ltd. (HIT) and Fujitsu Ltd. (FJTSY), the remaining two of
Japan's five biggest chip makers, said they hadn't been approached by
Intel.
Fujitsu said that although it has developed the chip by licensing the
technology from Rambus, it hasn't decided to begin mass production, nor
has it begun sample shipments. Hitachi said it plans to start sample
shipments of the Direct RDRAM products - either 128-megabit or
144-megabit chips - sometime in the first half of this year. It is now
starting mass production of another advanced DRAM product known as
double data rate DRAMs.
Intel has singled out only a few companies for funding because it has
tried to identify those which it believes will be the strongest Direct
RDRAM producers in the future, analysts said.
"Intel has picked out three or four companies world-wide likely to
produce Rambus chips ... and likely to survive in the DRAM business over
the next century," said Richard Kaye, an assistant vice president at
Merrill Lynch Japan, who sees Toshiba and NEC as the strongest Japanese
producers in the DRAM business in the years ahead.
Intel, the leader in microprocessors, is looking for partners in
areas where it is weak or deficient, another reason for approaching
Japanese companies, Kaye said. "Intel is presumably fishing around for
partners that can provide it with memory, and partners it can develop
system-on-a-chip with," where logic and memory are combined on a single
chip, he said.
Intel has struck deals with two non-Japanese memory chip makers to
help promote production of the Rambus chips, including Micron Technology
Inc. (MU) of the U.S. and Samsung Electronics Co. of South Korea. With
Micron Technology, the investment amount is $500 million, and with
Samsung $100 million.
Intel's interest in Rambus technology, which it endorsed early, is to
help with the development of faster memory chips complementary to its
faster microprocessors, analysts said.
"Intel is planning to introduce faster microprocessors, while the gap
between microprocessors and memory is becoming larger in terms of
speed," said Intel's Mizuno. "Intel is thinking that RDRAM is one of the
solutions to reduce that gap," he said.
The market for the Rambus chips is expected to grow sharply in the
future. Half of the DRAM market in 2001 or 2002 could be of chips with
Rambus architecture, Toshiba's Ohmori said.
The lackluster response in Japan to Intel's recent funding proposals
may be related to uncertainty about what obligations would be attached,
Kaye said. If Japanese companies were to become simply "foundry
suppliers," supplying products to Intel on an
original-equipment-manufacturing basis, that would be unattractive. On
the other hand, if they were able to sell products directly to PC
makers, accepting funding would be more attractive, he said.
NEC said that by the end of the first half of this year, it plans to
produce up to one million units per month of 72-megabit Direct RDRAM
chips. By the end of the year it plans to produce between 3 million and
five million chips per month - a combination of 72-megabit, 128-megabit
and 144-megabit chips.
Toshiba said it is now producing first generation 72-megabit Direct
RDRAM chips, and later this year will begin producing 128-megabit and
144-megabit chips.
"The ramp-up curve is yet to be decided; it's subject to customers'
qualifications or the evaluation process," said Ohmori of Toshiba.
Mitsubishi Electric said it plans to increase production of
72-megabit Rambus-design chips to 500,000 units per month in the third
quarter of this year from the 200,000 units per month expected in the
second quarter, and the 100,000 units per month seen in the first
quarter. |
