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Technology Stocks : RAMBUS (Nasdaq: RMBS) - THE EAGLE -- Ignore unavailable to you. Want to Upgrade?

To: richard surckla who wrote (184)	12/6/1999 2:02:00 PM
From: richard surckla	Respond to of 2039

Only giants can tame DRAM monster Date: 12/05 23:54 EST Only giants can tame DRAM monster Dec. 05, 1999 (Electronic Buyers News - CMP via COMTEX) -- The DRAM is a savage chip. A device that has been dominant for decades, DRAM has largely turned on its creators, nearly destroying many chip companies. NEC Corp., the world's fourth-largest DRAM maker, is the latest to throw in the towel as an independent supplier. The company is combining forces with Hitachi Ltd., an equally stressed Japanese memory-chip supplier. They join the legions of semiconductor giants, including Intel Corp. and Texas Instruments Inc., that have given up on or changed their approach toward DRAMs. The global market is quickly shaping up just as many expected. There are still several viable suppliers in the business, but the number is shrinking. At the upper ranks of the industry, there are just three huge players: Samsung Electronics Co. Ltd., Micron Technology Inc., and Hyundai MicroElectronics Co. Ltd. (which includes LG Semicon Co. Ltd.). And now, we're seeing two additional groups of players emerging: those being spun off from conglomerates, such as Infineon Technologies AG, the former Siemens unit, and those merging their resources to compete on a larger scale, including newly formed NEC Hitachi Memory Inc. OEMs must now be concerned that, like the children's tale, the DRAM tigers won't continue to eat each other up, leaving just a few suppliers able to dictate prices. Already, the market is shaping up more as an oligopoly of a few giants. Once these DRAM survivors sense their market power, the free-wheeling chaos that benefited OEMs the last four years could be replaced by far more structured competition. But is there a defective gene in DRAMs that turns this pervasive semiconductor into a supplier's monster? Except for a few brief periods of shortages, DRAMs have shown time and again that the silicon real estate they take up can be far more profitably used for nearly any other type of device. And the constant improvements in DRAM manufacturing techniques have enabled suppliers to keep driving down prices in a competitive environment. But now, with fewer competitors in the market, OEMs may not be able to count on this. Still, the DRAM kingpins have been ramping up new fabs, and have shells in place to add more capacity if needed. And it won't be long before we see 300-mm-wafer fabs capable of producing two-and-a-half times as many die on a wafer as today's 8-in.-wafer fabs. So OEMs have one thing going for them: Despite the devastating history of DRAMs for their producers, there remains a Seven-Cities-of-Gold lure that keeps memory conquistadors on the quest. -0- By: Jack Robertson Copyright 1999 CMP Media Inc.