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To: NightOwl who wrote (73219)	5/18/2001 1:40:07 PM
From: Don Green	Read Replies (2) \| Respond to of 93625

Micron lowers DDR prices to parity with SDRAM By Margaret Quan, EE Times May 17, 2001 (1:06 PM) URL: eetimes.com MANHASSET, N.Y. — Micron Technology Inc. slashed prices on its PC2100 double-data-rate SDRAM memory modules by 10 to 15 percent on Wednesday (May 16) to bring them into parity with PC133 SDRAM modules, in an attempt to boost demand for DDR memory in PCs just as the company is ramping DDR production. The move signals the migration of DDR, once considered an emerging technology, to the mainstream, largely due to the efforts of memory makers anxious to stimulate sales through whatever means possible. However, one competitor questioned whether Micron is ready to deliver DDR in volume. The Boise, Idaho, memory supplier released the price changes on its Crucial.com Web site for factory-direct memory upgrade supply. Prices for PC2100 DDR SDRAM modules start at $41.39 for 128 Mbytes and $79.19 for 256 Mbytes. Competitors are expected to make similar DDR SDRAM price cuts in response. Fred Waddel, director of sales for the computing and consumer group at Micron, said prices will probably fall below the reduced levels. He said he expects DDR and standard prices will remain at price parity before the memory market tightens up again. Memory prices have been heading downward since the beginning of the year due to excess supply. Major memory chip producers have made aggressive price cuts to head off sluggish demand for DDR caused by a PC sales slowdown. Thus far DDR SDRAM price cuts have not yielded increased sales, but they have slimmed profit margins for DRAM producers in an already depressed market. Many producers struggle with inventory backlogs of older products and seem to cut prices just to drive volume sales. No matter what measures DRAM makers take, analysts expect the worldwide memory market to experience a drop in revenue this year. Market research firm IC Insights Inc. (Scottsdale, Ariz.) said DRAM sales were off 27 percent in the first quarter and projects the market will total $20.7 billion in 2001, down 28 percent from the $28.9 billion attained last year. Micron Technology's Waddel called the company's DDR price cut a "no-brainer," explaining that Micron "doesn't see a lot of reasons why DDR should cost more" than SDRAM. He said the size and scale of Micron's manufacturing operation, its ramp-up of DDR production and its move to 0.15-micron process technology provide cost savings that make the price cuts possible. Waddel admitted that the strategy is to make DDR prices more attractive and to ramp production just before DDR-based PC platforms for Intel Corp.'s Pentium 4 bow. "We believe DDR will be the primary memory technology and we want to ramp up first," Waddel said. Lower prices are expected to give DDR-based solutions an edge over Rambus-based solutions for the Pentium 4, since the RDRAM-based solutions are expected to cost two to three times more. Micron has long been a backer of DDR and is currently engaged in a legal suit with Rambus over patent royalties. Though the price cuts may drive acceptance of DDR, major DRAM manufacturers could hurt their own pockets in the long run, said IC Insights senior analyst Brian Matas. "Micron could shoot themselves in the foot," said Matas. "They'll sell more units, but at lower prices and this will hurt their profits, at a time when profits are already tight."