Toshiba juggles new memory chips
By Brooke Crothers
Staff Writer, CNET News.com
April 1, 1999, 1:00 p.m. PT
update Toshiba, one of the world's largest memory chip manufacturers, will accelerate its move to next generation DRAM as it grapples with a dizzying array of memory standards options.
Toshiba said today that it would slash production of the 64-megabit DRAM chips by about 90 percent by the end of the year and shift to more advanced 128 megabit chips.
The move comes as memory chipmakers shift strategies in order to make more money in a business that has been clobbered over the last few years by plunging prices.
Makers also face a staggering number of memory technology standards, forcing many to pursue several different standards at the same time since it is not clear which standard, if any, will dominate in the future. Currently, popular standards include SDRAM, Rambus DRAM (RDRAM), and double data rate (DDR) SDRAM.
While DRAM chips are used in the main memory of all PCs today, 64-megabit capacity SDRAM chips are the most widely used chips today. Generally, the higher the capacity of the chip, the more data can be crammed into the same amount of silicon real estate, leading to computers with greater amounts of memory, which enhances performance.
Toshiba said it will shift the majority of its DRAM production to 128-megabit SDRAM "and other high-performance memory."
The plan calls for cutting back 64-megabit DRAM production to 1 million units per month by December 1999, the company said. Toshiba also said it was moving to a more advanced manufacturing process called "0.20 micron." Today, processor makers such as Intel, by comparison, use a 0.25-micron process. This specifies the width of the transistor. Generally, the smaller the process, the more advanced the chip.
The electronics giant will try to cover all its bases as it moves to a higher capacity memory. "In response to customer demand, Toshiba will accelerate the output of 128-megabit SDRAM, DDR SDRAM, and RDRAM. This enables efficient volume production of 133-MHz SDRAM, 800-MHz RDRAM, and other high-density memory solutions," the company said in a statement.
Rambus's RDRAM is considered by some to be the performance leader and possibly the dominant standard of the future but nobody's sure at this point, causing memory makers to hedge their bets. The Rambus memory system helps to ameliorate the growing speed disparity between computer microprocessors and memory. As processors have gotten faster and more powerful, it has been harder and harder for a computer's memory to keep it supplied with the data it needs, so the microprocessor ends up doing the electronic equivalent of twiddling its thumbs.
But makers aren't flocking to Rambus memory as much as analysts and industry observers expected.
"This just about says that they have ruled out widespread adoption of Rambus for 1999, and probably for the first half of 2000," said Danny Lam, a principal at Fisher-Holstein, a consulting firm.
"The initial emphasis is on SDRAM...[which] chips away at the performance lead that Rambus has over SDRAM," he said.
"Toshiba is focusing on high profit-margin markets including servers, workstations, high-end PCs, and notebook PCs," Jamie Stitt, DRAM business development manager at Toshiba's U.S. operation, said in a statement.
"Whether the industry demand is for SDRAM...RDRAM or...DDR SDRAM, Toshiba will be able to respond within the normal production cycle-time," he said, implying that Toshiba is indeed hedging its bets.
"DRAM manufacturers are saddled today with difficult choices, mainly requiring them to enhance processes and change [standards] at an accelerating rate, at a time when investment capital is difficult to obtain," Jim Handy, principal analyst, at Dataquest, said in a statement.
The one bright spot is that prices for memory have been increasing over the last few quarters. Last week, Micron reported profits of $34 million, its first since its first fiscal quarter of 1998, partly due to the strength of memory prices. This is a positive sign, as memory manufacturers have been facing losses or low earnings since 1996.
The industrywide cutback in plant investments and production stoppages helped cut down on the oversupply condition that has plagued the industry. according to Sherry Garber, senior vice president of Semico Research.
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