WSJ article. Lengthy but very good read. Check out the production numbers at the end.
REPEAT:Japan Cos Gear Up For Rambus
Chip Output;Intel Lurks
By James Paradise
TOKYO (Dow Jones)--Several major Japanese semiconductor makers are
gearing up for the production of a more advanced dynamic random access
memory chip, and two of them say they have been approached by Intel Corp.
(INTC) about funding for the activity.
Toshiba Corp. (J.TOS or 6502) said Wednesday it had received a proposal
from Intel concerning funding for the production of the Direct Rambus
DRAM chip, a high speed memory device developed by Rambus Inc.
(RMBS) of the U.S., but has yet to make a decision on the proposal.
"We have just started to study the proposal," said Keisuke Ohmori. a
spokesman for Toshiba.
Mitsubishi Electric Corp. (J.MBE or 6503) said it had also received a
proposal from Intel on the new chip, but declined it, at least for the time
being.
"Although Mitsubishi Electric was approached by Intel Corporation with
regard to possible financing measures for production-related investments,
we declined due to the fact that we are able to achieve our current
production plan with our present capital investment levels," said Koichi
Nagasawa, a general manager for Mitsubishi in a statement issued
Wednesday. "However, no decisions have been made regarding the
possibility of entering into such arrangements in the future."
In Japan, Intel wouldn't comment on discussions with any specific
companies. However, Masatoshi Mizuno, a spokesman for Intel,
acknowledged Intel is having discussions with many companies on the
Rambus chips, and said, "In general, the goal is to insure an adequate Direct
RDRAM supply for the personal computer market segment."
NEC Corp. (NIPNY or 6701) declined to say whether it had been
approached by Intel, but noted it was "looking toward" more advanced
memory products and was "thinking about third-party investment in next
generation facilities."
Hitachi Ltd. (HIT or 6501) and Fujitsu Ltd. (FJTSY or 6702), the remaining
two of Japan's five biggest chip makers, said they had not been approached
by Intel on the matter.
Fujitsu said that although it has developed the chip by licensing the
technology from Rambus, it hasn't decided on whether to begin mass
production, nor has it begun sample shipments.
Hitachi said it plans to start sample shipments of the Direct RDRAM
products - either 128-megabit or 144-megabit chips - sometime in the first
half of this year. It is now starting mass production of another advanced
DRAM product known as double data rate DRAMs.
Intel has singled out only a few companies for funding because it has tried to
identify those which it believes will be the strongest Direct RDRAM
producers in the future, analysts said.
"Intel has picked out three or four companies worldwide likely to produce
Rambus chips...and likely to survive in the DRAM business over the next
century," said Richard Kaye, an assistant vice president at Merrill Lynch
Japan, who sees Toshiba and NEC as the strongest Japanese producers in the
DRAM business in the years ahead.
Intel, the leader in microprocessors, is looking for partners in areas where it
is weak or deficient - another reason for approaching Japanese companies,
Kaye said.
"Intel is presumably fishing around for partners that can provide it with
memory, and partners it can develop system-on-a-chip with," where logic
and memory are combined on a single chip, he said.
Already Intel has struck deals with two non-Japanese memory chip makers to
help promote production of the Rambus chips, with Micron Technology Inc.
(MU) of the U.S. and Samsung Electronics Co. of South Korea. With Micron
Technology, the investment amount is $500 million, and with Samsung $100
million.
Intel's interest in Rambus technology, which it endorsed early, is to help with
the development of faster memory chips complementary to its faster
microprocessors, analysts said.
"Intel is planning to introduce faster microprocessors, while the gap between
microprocessors and memory is becoming larger in terms of speed," said
Intel's Mizuno. "Intel is thinking that RDRAM is one of the solutions to
reduce that gap," he said.
"They are carefully targeting investment to facilitate commercialization of
the technology critical to Intel's future," said Steve Myers, a senior analyst at
Jardine Fleming Securities.
The market for the Rambus chips is expected to grow sharply in the future.
Half of the DRAM market in 2001 or 2002 could be of chips with Rambus
architecture, said Ohmori of Toshiba.
The lackluster response in Japan to Intel's recent funding proposals may be
related to uncertainty about what obligations would be attached, Kaye of
Merrill Lynch said. If Japanese companies were to become simply "foundry
suppliers," supplying products to Intel on an original equipment
manufacturing basis, that would be unattractive. On the other hand, if they
were able to sell products directly to personal computer makers, accepting
funding would be more attractive, he said.
NEC said that by the end of the first half of this year, it plans to produce up
to 1 million units per month of 72-megabit Direct RDRAM chips and by the
end of the year it plans to produce between 3 million and five million chips
per month - a combination of 72-megabit, 128-megabit and 144-megabit
chips.
Toshiba said it is now producing first generation 72-megabit Direct
RDRAM chips, and later this year will begin producing 128-megabit and
144-megabit chips.
"The ramp-up curve is yet to be decided; it's subject to customers'
qualifications or the evaluation process," said Ohmori of Toshiba.
Mitsubishi Electric said it plans to increase production of 72-megabit
Rambus-design chips to 500,000 units per month in the third quarter of this
year from the 200,000 units per month expected in the second quarter, and
the 100,000 units per month seen in the first quarter. |
