Asia DRAM Report: Rambus DRAM Losing Battle With DDR
By DERMOT DOHERTY
OF DOW JONES NEWSWIRES
TAIPEI -- When semiconductor giant Intel Corp. (INTC) threw its weight behind Rambus Inc. (RMBS) in late 1996, the chip designer's technology appeared destined to become the future of the memory chip industry.
Five years down the road, however, high-performance Rambus dynamic random access memory (RDRAM) has all but been eclipsed by another emerging standard, Double Data Rate (DDR).
"There's very little chance of Rambus becoming mainstream after the significant momentum that has been generated by the DDR camp," said Dan Heyler, head of regional semiconductor research at Merrill Lynch in Taipei. "The DDR industry roadmap and standards are firmly in place and will carry the DRAM (sector) into the next industry upturn."
From the start, Rambus DRAM was bedeviled by a host of problems, including a steep price premium over competing memory solutions, a narrow base of support and at times negligible performance advantages over DDR.
But it has been a gradual wavering of support from Intel, which had even designed its Pentium 4 microprocessor around Rambus technology, that some industry experts say sealed the fate of the new standard.
That was all too evident at a recent Intel Developer's Forum in the U.S., where Rambus' once ardent backer seemed to clearly shift its emphasis to support for the DDR and synchronous DRAM memory standards, said Andrew Norwood, senior analyst at Gartner Dataquest in London.
"Intel is really keen to push the Pentium 4 down through the market, but the cost issue and user resistance to Rambus was beginning to hold them back," Norwood said. "So they have thrown Rambus overboard."
Earlier this year, Gartner forecast that DDR's share of the overall DRAM market would exceed that of Rambus for the first time during the fourth quarter of this year, when DDR's percentage of total DRAM shipments will likely rise to 12.4% versus Rambus' 10.9%.
Plagued With Teething Problems
Despite Intel's strong backing early on, the going has never been easy for Rambus DRAM.
Soon after its launch, it encountered a slew of setbacks, including early technical glitches and Intel's failure to come up with an effective chipset for the new memory chip. That slip-up hurt motherboard customers who had invested resources into designing new boards on Intel's guidance and badly tarnished its image.
Most damaging to its cause, perhaps, was the high cost of Rambus chips, which was at odds with the trend towards low-cost machines in the PC industry and was not justified by its performance. Many electronics companies also bristled at the royalties Rambus demanded for the technology.
"The performance differential between RDRAM and DDR for the broad sweep of applications is very narrow, but the cost differential is very large," said Jonathan Ross, head of regional technology at Goldman Sachs in Hong Kong.
A 128-megabyte Rambus module costs an average US$44.30, according to online trading site DRAMExchange, while analysts say the price of a 128MB DDR module is only around US$18.00. Even the motherboards and testing needed for Rambus chips are much pricier than for standard DRAM.
Then there were the legal tussles. Rambus ended up in court with some of the biggest names in the DRAM industry, ironically, over its claim to patents for the DDR and SDRAM standards.
"What Rambus needed to do was get the 'pile-it-high and sell-it-cheap' guys (such as Hynix Semiconductor Inc., Infineon Technologies AG and Micron Technology Inc.) onboard," said Norwood at Gartner Dataquest. "But what they did was get embroiled in legal action with them just when they needed their help to bring down the price of RDRAM memory."
As a result, relatively few DRAM makers have really embraced the high-speed memory chip, preventing it from becoming a mainstream memory solution.
Only Korean chip giant Samsung Electronics Co. (Q.SSE), Japan's Toshiba Corp. (J.TOS) and Elpida Memory Inc. have manufactured Rambus chips in any great quantity. The three chipmakers will account for around 60%, 22% and 14% of total Rambus output in 2001, respectively, according to Gartner.
Other major DRAM makers, including Micron, the No. 2 DRAM maker, and Germany's Infineon, are firmly ensconced in the DDR camp, which offers a smoother transition from SDRAM.
As a further sign that the industry has been rallying around the cheaper and - from an engineering perspective - less complicated DDR standard, Taiwan chipmakers VIA Technologies Inc. (Q.VIA), Silicon Integrated Systems Corp. (Q.SLN) and Acer Laboratories Inc. (Q.ACL) recently rolled out chipsets that allow Pentium 4 microprocessors to function with DDR memory.
Around the same time, Intel started shipping its 845 chipset, which allows the Pentium 4 range to operate with synchronous DRAM, the current industry mainstream.
Most ominously for Rambus, the U.S. chip giant is slated to launch its own DDR-compatable chipset early next year, a move many in the industry say could deal Rambus DRAM a knockout blow.
"It seems as though DDR has gained the upper hand...and the feeling is that once Intel's 845 DDR chipset comes out, the pendulum will swing very heavily in DDR's favor," said Ross at Goldman Sachs.
Rambus backers say the chip standard may be down, but not out, arguing RDRAM chips will come into their own a couple of years from now when faster microprocessors allow their full potential to be realized.
But by that stage, it could well be too late for a comeback. DDR2 is already in the pipeline, and the industry is even looking beyond that to another memory solution. By the time Rambus chips are really able to pack a punch with more powerful microprocessors, the DRAM industry will likely have moved on to other things, leaving RDRAM out on the periphery. |
