Samsung: Sitting (DRAM) Pretty
Korean giant hatching profits from SDRAM, RDRAM and DDR memory portfolio
By Ahn mi-Young
Seoul, South Korea?Having eggs in both the direct Rambus DRAM (RDRAM) and the DDR DRAM baskets, Samsung Electronics is content to sit back and watch the Intel/Rambus camp and the other semiconductor makers fighting to dominate the next generation of memory technology.
Samsung is the world's leading producer of RDRAM, cranking out some two million 128Mbit Rambus parts monthly. It is also looking to be the first to develop 1Gbit DDR.
Currently, Samsung produces half of the world's Rambus DRAM but would settle for a 40 percent share this year if DRAM rivals were to ramp up, said Kim Ilung, DRAM marketing director of Samsung Electronics in Seoul. This would happen only if the likes of Hyundai Electronics and Micron Electronics would also start mass-producing Rambus DRAM starting around July, he said.
"For our firm, it is not a matter of choice between Rambus or DDR," Ilung said. "Instead, the DRAM market is going to be more finely segmented so that we would gain more by being better able to vary a mix of DDR, Rambus, or SDRAM in response to the world's shifting demand."
Ilung even predicts a coming tight market for RDRAM as supply grows slower than demand. "During 2000, DDR and Rambus DRAM are expected to take 3 percent and 10 to 15 percent, respectively, of the world DRAM market,' Ilung said.
At the moment, Rambus is moving much faster than DDR. The worldwide monthly demand for DDR seems to be as little as one million, while Rambus demand has already surpassed 10 million as of March, Ilung said.
DDR use is reserved for high-end servers, said Ilung, but these servers' chips account for only 8 percent of the total DRAM market. Meaning, even if DDR devours all of the server market, DDR would still walk away with only 8 percent of the world's DRAM market.
DDR also lags behind Rambus in terms of infrastructure, he added. For instance, the availability of DDR chipsets is limited compared to that of the Camino chipset from Intel Corp.
However, SDRAM will still represent more than 90 percent of the 64Mbit DRAM at both Samsung and Hyundai during 2000, while Rambus will represent 40 percent and 25 percent of the 128Mbit DRAM at Samsung and Hyundai, respectively, in 2000.
"It would make no business sense (for Samsung) to produce 64Mbit Rambus DRAM for the price gap is not big enough between SDRAM and Rambus," said Jeon Woo-Jong, a senior analyst at Dongwon Securities.
Move to 300mm Fab
What may help RDRAM part volumes to ramp up would be a move to 300mm manufacturing facilities, which would drive down costs; however, that may be far in the future.
Although Samsung was one of the earliest companies to move to 200mm (8-inch) fabs, the company may not be as quick in moving to 300mm (12-inch) facilities.
"We do not feel that we have to be the world's first in moving to a 12-inch fab," said Samsung's Ilung. "A first-mover often pays an extra cost, for instance."
Samsung already has a 300mm fab pilot line that was completed in 1998 but has not been used. "We are ready to move into it anytime when the market gives us a cue to go ahead," Ilung said.
Hyundai Electronics, the other major Korean electronics player, echoed these sentiments.
"It would probably be around July 2001 when major DRAM makers start talking about investing in 12-inch fabs,' said Kim Ji-Soo, deputy general manager at Hyundai Electronics. " And then only a few would be able to afford it, as the cost would be at least $3 billion."
Tight Supply to Come?
There will definitely be a memory squeeze in the near future, according to Ilung. "The impact of frozen DRAM capital expenditures in 1998-1999 is going to be felt sometime this year," he said.
If that is indeed the case, RDRAM memory will not get cheaper anytime soon, meaning most consumers will continue to pay a premium if they want the high-bandwidth memory that RDRAM brings. This also means that SDRAM will dominate this year and quite possibly next year as well. |
