Rambus Orders Lag For Pentium 4 Systems
MONDAY, NOVEMBER 27, 2000 12:41 PM
- TechWeb
Nov 27, 2000 (Tech Web - CMP via COMTEX) -- Intel's launch of the Pentium 4 microprocessor may be the best hope yet for Direct Rambus DRAM to ramp into the market, but orders so far are less than encouraging.
Despite the fact that the new Intel Corp. (stock: INTC) CPU was designed to exclusively support Direct RDRAM, three of four major suppliers contacted said they are receiving few OEM orders.
One vendor, Samsung Electronics Co. Ltd., said it increased fourth-quarter production of Rambus Inc. (stock: RMBS) chips 20 percent sequentially to meet demand. However, in a series of interviews, executives at Hyundai Electronics Industries Co. Ltd., Infineon Technologies AG (stock: IFX), and Micron Technology Inc. (stock: MU) reported little activity among PC customers at a time when OEM plans to ship Pentium 4-based desktop systems would appear to require increased Rambus production.
Hyundai and Micron each said they have largely stopped Direct RDRAM production and will not make more chips until customer orders materialize. Infineon, which said it manufactured several million Direct RDRAM chips a month this summer, said it is left with inventory and also has stopped making the chips.
Each of the three DRAM makers is involved in lawsuits with RDRAM developer Rambus, Mountain View, Calif., over rights to SDRAM patents Rambus said it owns. Despite the exchange of complaints, the suppliers said pending litigation wouldn't stop them from resuming Direct RDRAM production.
"We will make whatever DRAMs our customers want," said Infineon president and chief executive Ulrich Schumacher, in an interview at the Electronica 2000 trade show last week in Munich, Germany. "We just don't see any OEMs in the market now for Direct Rambus."
Farhad Tabrizi, vice president of strategic marketing and product planning at Hyundai's DRAM business unit in San Jose, Calif., said the company has essentially stopped making Direct RDRAMs until it gets new orders.
By contrast, Hans-Dieter Mackowiak, senior vice president of sales and marketing at Samsung Semiconductor Inc., San Jose, estimated that Samsung has 80 percent of the global market for Rambus memory, which accounts for about 8 percent of Samsung's total DRAM bit production.
Speaking at Electronica, Mackowiak said Samsung is dedicated to making Rambus a major factor in the memory market. To this end, the company two weeks ago announced prototypes of next-generation 256- and 288-Mbit Direct RDRAM made on a 0.17-micron process.
Both Samsung and Toshiba Corp. are producing Direct RDRAM for the Sony PlayStation 2, which uses two chips per game console. NEC Corp. (stock: NIPNY) is believed to be producing limited quantities of the chips, but executives at the company could not confirm output levels by deadline.
Rambus did not return calls seeking comment. However, Rambus president David Mooring two weeks ago predicted that Direct RDRAM would capture 40 percent of the total DRAM market by 2003.
Last week's debut of the Willamette-class Pentium 4, which is equipped only to support Direct RDRAM, was heralded as the memory technology's defining moment in the PC market. Most major OEMs, including Compaq Computer Corp. (stock: CPQ), Dell Computer Corp. (stock: DELL), Gateway Inc. (stock: GTW), Hewlett-Packard Co. (stock: HWP), and IBM Corp. (stock: IBM), introduced workstations or high-end PCs using Pentium 4 and Rambus memory. Most models were priced above $3,000, which has been Intel's initial target market for Pentium 4.
Danny Lam, an analyst at Fisher-Holstein, Wilmington, Del., said the pricey Pentium 4 systems will be a niche market, and existing OEM inventories are enough to support the PC's limited initial production quantities.
Andreas von Zitzewitz, executive vice president at Infineon, said the company's OEM customers "can live off the amount of Direct RDRAM chips we produced for them this summer."
"Infineon had ramped up to several million Rambus chips a month because Intel had promoted its Pentium 4 and Direct Rambus heavily with OEMs," von Zitzewitz said.." Then, this fall, OEMs suddenly stopped ordering, claiming they had enough units on hand to meet their foreseeable requirements."
Earlier this month, Micron chairman, president, and CEO Steve Appleton told EBN that major PC OEMs informed Micron they could get whatever quantities they needed from available sources such as Samsung.
Bert McComas, an analyst at InQuest Research Inc., Gilbert, Ariz., said some OEMs may be holding back on Rambus because Intel has publicly committed to offering its Northwood-class Pentium 4, a mainstream PC version, with SDRAM memory in mid-2001.
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