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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: Teri Skogerboe who wrote (18344)	4/1/1998 11:32:00 AM
From: Rob-Chemist	Respond to of 70976

Teri - I think you are absolutely correct with respect to the DRAM situation: the manufacturers realize that there is unlikely to be an improvement in price in the near future (1-2 years). I think a lot of them have realized that you do not need a new Fab with the latest, greatest equipment to be able to dramatically increase your chip production and lower costs. Rather, many of them have probably realized that you can accomplish the same goal by clever engineering - i.e., shrink the die, as Micron has been so successful doing. The second issue, of whether the switching of Fabs from DRAM to ASICs, foundry service, etc. will result in oversupply in this area is more interesting. I think only a few of the companies that currently make DRAMs will be able to transition in this direction. To switch to ASICs, the company presumably would have to already sell a large number of ASICs and have appropriate design engineers to develop new products. To become a foundry service, they would have to have the technological expertise to make ASICs instead of DRAM. In one regard ASICs are simpler since the geometries are generally much larger than those found on DRAMS (typically 0.35-0.5 um on ASICs, although some companies are moving to 0.25 um). However, the device structures are more complex on ASICs and additional metalization is required. Thus, it is unclear to me how many DRAM manufacturers will actually move to ASICs.