Hyundai Stakes Rambus Claim
By Andrew MacLellan
Electronic Buyers' News
(02/19/99, 10:23:14 PM EDT)
Silicon Valley
Amid the din surrounding its impending merger with LG Semicon Co. Ltd., HyundaiElectronics Industries Co. Ltd. is proceding calmly with plans to roll out next-generation Direct Rambus DRAM.
While high back-end test and packaging costs could dampen early demand for Rambus chips, Hyundai believes it can capture 20% of a projected 150-million-unit global Direct RDRAM market in 1999.
Rambus technology is expected to make modest inroads into the PC landscape this year, and should account for between 9% and 15% of all DRAM sales, according to various projections. Those companies at the vanguard of the new high-speed memory launch could control the lion's share of next year's volume DRAM market. Looking to secure an early lead, Hyundai and its competitors are battling cost issues that collectively represent a wild card in the Direct RDRAM adoption scheme. Though it's working to bring prices down, Hyundai now estimates that at year-end, a 128-Mbit Direct RDRAM will cost 40% more than a 100-MHz SDRAM of equivalent density.
OEMs have indicated that they won't entertain a shift to Direct RDRAM unless the fourth-quarter 128-Mbit price premium dips to 30% or less, according to Mark Ellsberry, vice president of marketing for the semiconductor division of Hyundai Electronics America, San Jose.
"We need to improve yields as we ramp the parts," Ellsberry said. Chief among chip makers' complaints is the expense entailed by new chip-scale packaging and test equipment. According to Ellsberry, new micro-BGA packages can cost upwards of $2 and represent a sizable investment when compared with the 40-cent TSOP packages they're designed to replace. And micro-BGAs must be retooled with every other die shrink, creating a new set of design issues for chip and module makers.
What's more, high-speed testers now cost more than $5 million in many cases and are consuming a larger portion of back-end capital budgets. Direct RDRAM's creators, Rambus Inc. and Intel Corp., have been assuring chip vendors that existing low-speed equipment is sufficient for testing the DRAM core, with the more costly equipment needed only to test the external Rambus interface. However, Hyundai, Fujitsu Ltd., and other DRAM makers claim that during the early stages of the Direct RDRAM ramp, they will require high-speed test capability for the entire device.
"Our product engineers are saying that they need the high-speed testers, because with a high-speed periphery you get noise generation that can change bits," Ellsberry said. "There may be pattern sensitivity in the core, and we need the higher-speed testers to learn the failure modes.
"Once they're able to get a history on the part, then they won't need the [more costly test equipment]."
The upshot is that for the next several months, higher test and packaging costs will be amortized over relatively small batches of Direct RDRAM, keeping prices high until chip makers work out their manufacturing kinks. Hyundai, which will enter volume production with its 64-Mbit Direct RDRAM in June, is sampling the chips now for $26, or $29 for the 72-Mbit version with error-correction coding.
The manufacturing challenges Hyundai faces are common across the industry, but the company also is grappling with a unique set of obstacles as it brings Rambus technology to market.
The Korean government's forced merger of Hyundai and LG, while designed to stabilize the country?s struggling chip industry, placed the bitter rivals on a collision course that slammed home last month when LG fab workers walked off the production line in protest. The 15-day strike, resolved only after Hyundai gave in to a demand for bonuses for LG employees, underscored the challenges inherent in melding two distinct, and highly competitive, corporate cultures. Observers say that despite the obvious hurdles, a combined Hyundai/LG venture stands to play a key role in the evolving Direct RDRAM market.
Pentium III systems subject to export control Jack Robertson Washington, D.C. Intel Corp.'s new Pentium III Xeon processors will put high-end servers into the "supercomputer" category, triggering export restraints and creating problems for U.S. server makers looking to sell the systems overseas. And next year, Intel's 800-MHz Pentium III will throw desktop PCs into the supercomputer control category as well.
Executives representing major U.S. OEMs gathered in Washington last week, warning that unilateral U.S. export controls put domestic PC makers at a competitive disadvantage against foreign rivals able to sell leading-edge Intel-based PCs without constraint. U.S. companies must seek export licenses to sell supercomputer-rated PCs abroad, causing costly paperwork and delays that foreign competitors don't face.
The blitz speed of PC technology has now exceeded the control limit of 2,000 MTOPS (million theoretical operations per second) for requiring export licenses to certain countries, including China, India, Pakistan, Russia, and many states of the former Soviet Union. MTOPS is a unique government criteria to define control limits. All multiprocessor Pentium III Xeon servers will exceed this threshold, according to Dan Hoydysh, director of government affairs for Unisys Corp., Blue Bell, Pa. The Washington-based Information Technology Industry Council (ITI), which represents U.S. PC makers, is lobbying Congress and the Clinton administration to raise the control threshold to above 12,000 MTOPS. The sheer volume of PC export applications "will swamp the government [export-control office], causing the system to collapse," Hoydysh said. He estimated that U.S. export-control authorities last year processed about 300 supercomputer license applications, but added that Pentium III requests could number in the tens of thousands.
The 500-MHz Pentium III processor is rated at less than 2,000 MTOP, but Hoydysh said the 800-MHz version slated for release early next year will exceed the control threshold. "That means every desktop PC with this processor is subject to export controls," he said. Moreover, multiprocessor versions of the 800-MHz Pentium III chip would reach 12,000 MTOPS, extending export curbs on servers to the rest of the world except for Western and allied nations, Hoydysh said.
Congress set the 2,000-MTOPS limit years ago, when only mainframe supercomputers were at this level.
"But the PC industry has advanced so rapidly that we've crashed right through the limit and will continue to move higher every year," said Marshall Phelps, vice president of licensing and intellectual property at IBM Corp., Armonk, N.Y. "Congress simply doesn't realize how fast technology changes." "Today's laptop is yesterday's supercomputer," Hoydysh added, noting that a 250-MHz Pentium II notebook has the same MTOPS rating as the Cray Corp. XMP2 supercomputer of only a few years ago.
Peter Pitsch, communications policy director at Intel, Santa Clara, Calif., warned that as high-speed processors move into new, non-PC applications, a bevy of consumer-electronics products may suddenly be thrown under supercomputer export-control limits.
Rhett Dawson, president of ITI, said that OEMs have been slapped in the last month with an added burden of supplying end-user certification for many computers shipped to China. Export-control authorities added the requirement to assure that Chinese buyers were civilian customers and not military operations. Again, foreign competitors generally have no such restraint, making their sales to China less onerous.
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