Intel has spotty record luring DRAM makers to build Rambus chips
By Jack Robertson, EBN
Mar 2, 2001 (4:43 PM)
URL: ebnews.com
Desperate to get enough Direct Rambus DRAMs into the market to support its new Pentium 4 processor, Intel Corp. this week announced it has put money into Samsung Electronics Co. Ltd. for the second time to boost RDRAM output and ensure a steady supply of parts. Samsung appears to be the only taker of Intel's Rambus-related investment offers. Both Hyundai Electronics Industries Co. Ltd. and Elpida Memory Inc. said they have turned down Intel investment offers.
Based on past experience, however, Intel's desire to swap cash for a promise of chips may not pay off. To date, the company has been unsuccessful in its attempts to motivate other chip companies to start making RDRAMs or boost production sharply.
A total of $750 million that Intel has invested in Micron Technology and Infineon Technologies, which the chip maker said was intended to spur RDRAM efforts at these companies, has failed to bring them on line.
Samsung makes 70% to 80% of the industry's RDRAM supply, according to its own estimates. A year ago, Intel invested $100 million in Samsung, which it said was to spark RDRAM production.
Samsung will use this round of Intel money to install additional advanced testers so it can ensure higher RDRAM output. The Korean company had been producing more Direct Rambus die than could be tested, creating a back-end logjam, according to Dieter Mackowiak, senior vice president of sales and marketing at Samsung Semiconductor Inc. in San Jose.
"We can install the new testers quickly with the Intel investment, especially since we can get equipment from orders canceled by other chip makers," Mackowiak said.
But Intel needs to secure additional sources among the other large Rambus producers if it expects to meet its current Pentium 4 needs, according to analysts.
The first-generation Pentium 4 Willamette chip is locked into using Direct Rambus memory only, a legacy of Intel's prior policy to move to RDRAM exclusively for its advanced desktop processors. "That leaves Intel in dire straits to get memory suppliers to build enough RDRAMs to support the aggressive Pentium 4 ramp-up," said Nathan Brookwood, an analyst at InSight 64, Saratoga, Calif.
"Without enough Rambus DRAMs in the market, the Pentium 4 ramp is constrained," Brookwood said.
Besides Samsung, Intel appears to have struck out with other chip makers on this round of funding.
Sang Park, president of Hyundai Electronics' Semiconductor/LCD group, told EBN last month that Intel made the RDRAM money offer to his company first, but the two sides could never come to an agreement.
Similarly, Hidemori Inukai, Elpida Memory's vice president and general manager of the technical marketing division, said the NEC-Hitachi joint DRAM venture failed to agree on an Intel money proposal.
Even without the Intel funding carrot, Elpida is boosting its Direct RDRAM output from roughly 3 million 128 Mbit equivalent chips in the first quarter of 2001 to 18 million to 20 million in the fourth quarter, Inukai said.
Intel failed to bring on Micron Technology as a major RDRAM supplier as it had intended by investing $500 million in the DRAM maker in 1998. Micron president Steve Appleton said the company was free to use the Intel investment as it wished. Micron has developed and validated its own RDRAM chip, but still claims it is waiting on market demand before going into production.
The Micron investment, however, turned out well for Intel in another way: the MPU company reportedly made nearly $1 billion from reselling the Micron shares it had acquired.
Intel's $250 million investment in Infineon last year has also failed to bring the German chip maker into the RDRAM production ranks, despite Intel's spin at the time that this was an intended purpose.
Infineon executives said the Intel money was used to spur the construction and equipping of its new 300mm memory wafer production fab in Dresden, Germany, which would increase output of all types of memory chips, including RDRAMs, to support all Intel microprocessors.
In other RDRAM developments, Samsung executives told the Intel Developer Forum this week in San Jose that a new four-memory-bank version now in development could reduce Direct Rambus chip costs by more than 20%.
When the four-bank chip enters full production in 2002, it could be close to parity with SDRAM prices, said Jon Kang, Samsung's senior vice president for memory product planning and applications engineering. The four-bank RDRAM depends on a new Intel chipset slated to be introduced next year, according to Kang.
Pete MacWilliams, Intel Fellow and a specialist on the company's memory road map, confirmed the new Intel four-bank chipset will debut early in 2002. It will support both a single-memory channel for mainstream PCs and a dual-memory channel used by the current Willamette Pentium 4, he said.
Intel has not yet selected a name for the new four-bank RDRAM chipset, according to MacWilliams.
Samsung's Mackowiak said the existing 32-bank Direct Rambus DRAMs were originally designed to meet the needs of server memories. When server OEMs opted to use SDRAM and DDR instead, the opportunity opened up to design a four-bank RDRAM for desktop PCs, he said.
Even before unveiling the new four-bank RDRAM, Samsung is steadily increasing its RDRAM production from 8 million 128Mbit-equivalent units a month this quarter to 11 million units a month in the second quarter, 13 million monthly in the third quarter, and up to 14 million per month in the fourth quarter. |
