Bilow; Update on NOBODY'S BUYING DDR!
eetimes.com
DDR memories face slower than
expected acceptance
By Mike Clendenin
EE Times
(05/03/01, 1:29 p.m. EST)
TAIPEI, Taiwan — Sluggish demand in the PC
market is causing a crimp in demand for
double-data-rate SDRAM, despite aggressive
pricing moves by Micron Technology Inc. and
Nanya Technology Corp. to hasten price parity with
synchronous DRAM.
Nanya, a large supplier of DDR memories, has
pushed out its time frame for price parity between
DDR modules and SDRAM modules, and said the
release of a DDR-compatible Pentium 4 by Intel
Corp. would serve as a needed catalyst for DDR
module demand. "Price parity in June will probably
not happen," said Charles Kau, executive vice
president at Nanya. "It will probably be in
September when the real conversion happens. Until
then you will still see a premium for DDR of about
20 percent."
Over the last few weeks, prices for Rambus DRAM
PC800 modules have been plunging, as their production increases to
meet demand for use with Intel's Pentium 4 processor. Asia's largest
memory maker, Samsung Electronics Co. Ltd., has put the brakes on
DDR production as it pays increased attention to Rambus DRAM. "The
DDR ramp has been slowed down somewhat due to the slowness of
the development of the desktop market and some delays in the server
market," said Jon Kang, senior vice president of Samsung's memory
division. "But we hope our DDR products will start to ramp again
sometime late in the fourth quarter."
Intel's aggressive promotion of the Pentium 4, which only supports
RDRAM at present, and the modest performance gains that come from
pairing a Pentium III with DDR SDRAM are also helping to chill demand.
That may have a significant impact on Nanya, which is betting heavily
on the rise of DDR memory. By June, it will produce six million units a
month of 128-Mbyte DDR SDRAM modules. In the fourth quarter, it
projects output of 16 million units per month, or more than three times
the amount Samsung will produce.
The fact that DDR's market penetration to date is lagging Nanya's
original projections is weighing on the company's bottom line. Nanya
lost more than $50 million in the first quarter and saw April sales
increase a modest 6 percent, well below the company's 40 percent
projection.
To cut costs, Nanya is moving more production to its 0.175-micron
process. To spur sales, both Nanya and Micron have lowered prices,
and now offer 128-Mbyte modules of PC2100 for $62. Nevertheless,
demand is "lower than what we thought it would be," Kau said. "This
month [April] we sold about 75 percent of what we thought we would,
but SDRAM is also off by about the same amount." This week, a
128-Mbyte PC133 SDRAM module sells for roughly $45.
Nanya and chip set maker Via Technologies Inc. are also considering
another promotion of DDR to further stimulate demand, but both
companies stressed that no firm plans have been laid. Via is hoping to
see DDR memories achieve a 15 percent market share by June and a
30 percent share by the end of the year, up from an estimated 7
percent share at present. "Right now there isn't any major drive yet.
This is why we are considering possibly stimulating the market again
with some other solution by either bundling the product or offering a
rebate," a Via spokesman said.
In February, Via and Nanya bundled their products to make them more
attractive to motherboard makers, such as Asustek Computer Inc.,
which sells its recently released CUV266 board with the Via Pro 266
chip set and one of Nanya's 128-Mbyte PC2100 DDR modules. But the
collaboration has yet to bear much fruit. "I must admit the sales are
not quite healthy at the moment," said Hsieh Min-chieh, product
manager for Asustek. "The Pentium III users are not willing to change
the machine orientation and switch to the DDR. Users that choose
AMD are willing to chase the performance gain and are willing to pay
the premium on the memory, but for those that buy the Pentium, it's
not really a performance issue so they stay with PC133."
Although PC motherboards with DDR still represent less than 10
percent of Asustek's shipments, the company will release two more
"combo boards" this month that will support both double-data-rate
and single-data-rate SDRAM. Some of Taiwan's other motherboard
makers have also released models that can support both memory
architectures, but for end-users the boards have at least a $40
premium to basic PC133 versions.
To remove one of the DDR pricing bottlenecks, Asustek will bring the
next round of motherboards much closer in price to PC133
equivalents. That will probably mean switching to lower-priced DDR
chip sets from Acer Laboratories Inc. or Silicon Integrated Systems
Corp., Hsieh said. "The combo boards will be pretty aggressively
priced because the market is so slow, and from the component point
of view the cost of the materials that support DDR won't be that
much more."
Hsieh cited still unresolved compatibility issues among DDR modules as
another worrisome sticking point. Even though there are relatively few
memory makers in the DDR market, there are numerous module
makers, he said. "So it's not that easy to just phase in the products
and have them run on every memory module. Each [module] design
has its own behavior, and even though we test every one in our lab
we still cannot guarantee that the board will be OK on the street. It's
a problem."
But memory pricing still remains the toughest hurdle, said Samuel Liu,
a senior executive at Microstar International, another leading
motherboard manufacturer that had meager first-quarter sales of
DDR-based boards. For OEM sales, Liu said the premium of DDR boards
will be less than $6 in this quarter. "If the memory price drops
significantly, maybe DDR can account for a bigger part of sales," he
said. "But currently I don't see this trend. Maybe in the fourth
quarter." |
