Toshiba May Get DRAM Money From Intel
(02/03/99, 11:06 a.m. ET)
By Andrew MacLellan, Electronic Buyers' News
Subsidizing a growing number of its struggling DRAM partners, Intel has made overtures to Toshiba in an effort to assist the Japanese chip maker with its transition to Direct Rambus DRAM.
The offer follows similar deals already struck with Micron Technology and Samsung Electronics Co. to ensure ample supplies of the emerging Direct RDRAM chips come on the market this year.
Toshiba already is producing limited quantities of 72-megabit Direct RDRAM and will begin making 128- and 144-megabit devices later this year. But in a trend that's been followed by virtually every Japanese chip maker, the company has slashed DRAM capital spending for the current fiscal year, shaving more than $100 million off its original $1 billion investment plan.
Faced with rising test equipment costs and other Rambus-related capital demands, Japan's memory suppliers are now in need of a helping hand, according to observers.
“We did receive a proposal to fund production of Rambus DRAM, but we cannot comment further than that,” said a spokesman for Toshiba in Japan, who confirmed that Santa Clara, Calif.-based Intel tendered the offer. We just are starting to look at it.”
While Toshiba would not comment on the proposal's cash value, Intel extended a $100 million offer to Samsung last month in exchange for convertible bonds representing approximately 1 percent of the Korean company's outstanding common stock. And last October, Intel made a $500 million investment in Micron, which swapped the rights to 6 percent of its shares in exchange for a promise to aggressively ramp Direct RDRAM this year.
Intel threw its support to the Rambus camp more than two years ago in an effort to guide the DRAM industry through a sea of competing standards. Direct RDRAM, which delivers memory bandwidth of up to 1.6 gigabytes per second, is also linked architecturally to Intel's Pentium III processor and Camino chip set, which are slated for introduction in the coming weeks.
Although it has spent months pitching Direct RDRAM as the preferred memory technology for PC platforms in 1999, Intel has had a hard time getting the DRAM industry to guarantee supply, according to industry analysts.
Part of the problem stems from technical challenges associated with Rambus, which requires new packaging, lower operating voltage, and new module configurations. But a prolonged slump within the DRAM industry has also left suppliers short of the capital needed to buy new test equipment and make the other investments needed to ramp Rambus in line with Intel's road map. |
