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To: DJBEINO who wrote (46092)	6/2/1999 3:13:00 PM
From: phbolton	Respond to of 53903

-Jeff Mailloux is DRAM marketing manager for Micron Technology Inc., Boise, Idaho. writes: News article received, Saturday, May 29, 1999 3:07:07 PM EST DRAM changes challenge suppliers May. 28, 1999 (Electronic Buyers News - CMP via COMTEX) -- The DRAM landscape is changing in two key ways. First, the extended downturn and recent consolidation in the industry appears to be reducing the number and increasing the size of viable DRAM players. Second, market fragmentation for next-generation DRAM technology is forcing suppliers and PC makers to examine the price/performance issues of competing DRAM technologies. Despite healthy demand, continued increases in supply have made the market unpredictable and difficult. The rapid price declines of the last three years have been unprecedented. In 1995, one megabit of DRAM was selling for around $3.75; today that same megabit sells for less than 20 cents. The consolidation that has resulted from this prolonged financial challenge could limit the bulk of the DRAM market to three or four players, as smaller producers struggle to maintain their capital investments. A new landscape is also emerging with regard to interfaces and operational options. Beyond PC100 SDRAM, the industry is facing a fragmented market. The next step in PC performance will include an increase in the processor's frontside bus clock speed from 100 to 133 MHz. In addition, AGP clock speeds will increase from 2x to 4x. Both of these buses will hit the 1-Gbyte/s transfer-rate level. Since PC100 SDRAM is limited to an 800-Mbyte/s transfer rate, a performance bump on the DRAM bus is needed to keep pace with system buses. To this end, three technologies are being developed-133-MHz SDRAM, double-data-rate (DDR) SDRAM, and Direct Rambus DRAM (Direct RDRAM). The 133-MHz SDRAM leverages existing SDRAM technology and is gaining broad support in platforms targeted for the second half of the year due to its cost and time-to-market advantages. There are two segments driving the adoption of PC133 SDRAM-NT servers/workstations and low-end to midrange desktop PCs. To further speed things along, DRAM suppliers have developed DDR SDRAM, which increases bandwidth by clocking data on both edges of the DRAM clock. This technology also preserves the latency of standard SDRAM technology. Chipset development is beginning for servers, workstations, and desktops, and DDR will be widely adopted by networking-equipment suppliers. The third option is a new memory interface known as Direct RDRAM. Later this year, Intel plans to introduce a high-performance processor and chipset optimized for the high bandwidth offered by the Rambus interface. Whereas past DRAM technology transitions have been evolutionary, the move from SDRAM to Rambus is revolutionary, particularly with respect to chip and module assembly and electrical test operations. As a result, there is industrywide speculation that the push to Direct RDRAM will cause the market to fragment into multiple high-volume main-memory solutions. By the end of the year, we are likely to see concurrent high-volume implementations of PC100 SDRAM, PC133 SDRAM, DDR SDRAM, and Direct RDRAM. With the proliferation of divergent DRAM technologies, it is paramount that component suppliers match device capabilities with the needs of the customer. Industry experts believe that initial price premiums for Direct RDRAM will range from 30% to 100% of the price of an equivalent SDRAM. Value delivered for this premium must be valid and well communicated. For DRAM suppliers, segmentation will affect cost, price, revenue, and profitability. As a result, traditional core competencies of manufacturing and process development must be matched by agile design and marketing departments. financialweb.com