Hitachi spin-off, Elpida, eyes SDRAMs
Sep. 29, 2000 (Electronic Engineering Times - CMP via COMTEX) -- TOKYO -
Nearly a year after shaking hands on the deal, Hitachi Ltd. and NEC Corp. last
week announced the name and product strategy of their jointly owned DRAM
company. The 50-50 owned spin-off, Elpida Memory Inc., will open its doors for
business at the start of next year, and has high hopes of capturing a 20 percent
market share in the next few years. Yet executives left unanswered a number of
questions about product and capacity plans.
At a press conference, Elpida president Kenji Tokuyama and executive vice
president Tokumasa Yasui, who hail from NEC and Hitachi, respectively,
emphasized Elpida's intention to quickly move to 0.13-micron line widths. That
process technology will provide the underpinning for jointly developed 256-Mbit
DRAMs that will be introduced by the second quarter of next year.
SDRAM vs. Rambus
In his presentation, Yasui highlighted Elpida's planned move to 256 Mbits in the
first half of 2001, starting with 133- and 166-MHz synchronous DRAMs and
double-data-rate (DDR) SDRAMs. A NEC-developed technology, 256-Mbit
virtual-channel DRAM, is also scheduled to be introduced in the second quarter.
And by around mid-2002, Elpida expects to introduce a faster version of DDR
known as DDR-2.
Less clear is Elpida's Rambus plans. The company's 256-Mbit Rambus DRAM, based
on 0.13-micron design rules, is slated to come out in the fourth quarter of
2001, according to the road map Yasui presented. However, this differed from a
road map later provided to the press, which showed the 0.13-micron 256-Mbit
RDRAM being introduced at the same time as the DDR and SDRAM products.
The discrepancy stems from unresolved licensing and royalty issues between
Rambus and the new company, an Elpida spokesman said. Both Hitachi and NEC have
signed royalty payment agreements with Rambus Inc. covering RDRAM, SDRAM and DDR
technologies, but those are due to expire by year's end when Elpida takes over
the product line. "We don't have a strict schedule for Rambus [DRAM] because we
need to get an agreement with Rambus," an Elpida spokesman said. "We are trying
to start negotiations that will influence the start of the development."
Yasui said he'd like to come to terms with Rambus before the end of the year, a
schedule that would avoid the legal battle that has erupted between Rambus and
memory makers Micron, Infineon and Hyundai.
Hitachi, which ended a bitter legal dispute with Rambus earlier this year by
agreeing to pay the SDRAM and DDR royalties, is not producing RDRAM. NEC,
however, this year became one of the first to introduce an 0.18-micron 288-Mbit
RDRAM, and has championed the part for high-end workstations.
Elpida's emphasis on a faster SDRAM and on DDR may complicate negotiations with
Rambus. As a way to encourage greater RDRAM production, Rambus' strategy is to
charge the highest royalties for DDR, less for RDRAM and still less for SDRAM.
Rambus considers standard SDRAM a moribund technology and no threat to RDRAM.
Not so with DDR, however. "The reason we're asking for higher royalty on DDR is
because we feel it was introduced to compete with RDRAM using innovations
created for RDRAM," said Avo Kanadjian, vice president of marketing for Rambus,
in a recent interview.
As Elpida works to resolve its Rambus question, it is considering ways to build
up enough manufacturing muscle to compete against bigger rivals Samsung, Hyundai
and Micron. Last year, NEC and Hitachi together accounted for 13.6 percent of
the DRAM market, and Elpida's goal is to reach 20 percent by 2003. Yet even with
the upswing in DRAM prices this year, Elpida's sales forecast of $3.25
billion-made last November for fiscal 2001-has not changed.
Elpida officials acknowledge they are behind the big-three DRAM makers in terms
of capacity, and are urging their parent companies to increase volume. One way
is to use 300-mm wafers, a move now being planned for at NEC's high-volume DRAM
plant in Hiroshima starting in the second half of 2002. Another way is by being
early to make process technology shrinks. Indeed, Elpida claims it will be the
first to market 0.13-micron-based 256-Mbit DRAMs, which should have half the die
size of today's leading-edge 0.18-micron devices. The shift to 0.11 micron at
NEC's Hiroshima plant is scheduled to begin by the second half of 2001.
Right now, the two main DRAM plants owned by Hitachi and NEC together are
producing 50,000 wafers per month. NEC's Hiroshima plant is expected to reach
60,000 wafers a month by the end of this year, and will more or less stay at
that level for two years, until the 300-mm wafer line is introduced in the
second half of 2002. No data was provided for Hitachi's main DRAM fab in
Singapore.
While sales, product development and R&D have shifted to Elpida, the fabs remain
under control of the parent companies. And even though NEC and Hitachi have
pumped up their semiconductor capital spending this year, Japan's chip companies
tend to spend more on logic and system-on-chip technologies than on DRAM.
Accordingly, Elpida executives are talking more about turning a profit than
turning up production volumes. Yasui said the question is "how to get a good
profit with certain capacity. Basically we need to concentrate on the server
market."
One way to crank up capacity would be for Elpida to build its own fab, an option
that is being considered. "In the future, in order for us to be good in the DRAM
business we need to think about having our own capacity," Yasui said. Given that
new fabs cost well over $1 billion, such a move would require a huge capital
investment and, possibly, an initial public offering. "In order to get the money
to invest and to encourage people we need to think about an IPO," Yasui said.
Another option would be for Elpida to buy the DRAM fabs from NEC and Hitachi
outright, but the Japanese tax code discourages the transfer of large assets to
other companies, said Masahiko Ogirima, senior vice president of Hitachi.
Meanwhile, Elpida is moving forward with plans to consolidate its sales and
administration operations. Taking into account both parents' worldwide sales
divisions, the new company will reduce its sales force head count by 30 percent
globally. A Hitachi spokesman was unsure how many employees affected by the cut
would be transferred to other positions or laid off.
Elpida plans to employ a total of 750 people, 500 of them in product design and
development, and based in Japan.
eetimes.com |
