SAN JOSE -- It could be another long and miserable year in the poor DRAM industry, based on the consensus and general mood at the Platform Conference here this week.
While executives from the DRAM industry reported that product demand is finally picking up after a long slump in 2001 and the last part of 2000, they were also crying the blues over what could be a slow and painful transition to the new, high-margin memory architectures in 2002.
The slower-than-expected transition to new DRAM technologies could force shell-shocked memory makers to sell lower-priced commodity products much longer than they would prefer, thereby possibly prolonging their financial woes and losses, warned analysts.
Going into 2002, memory vendors hope to line their pockets by pushing several high-margin technologies, such as next-generation RDRAMs, DDR333 and DDR400 SDRAMs, DDR-II, Fast Cycle RAM (FCRAM), Reduced Latency DRAM (RLDRAM), and others.
Most these technologies are lined up on the runway and ready to take off. But much to the chagrin of the memory, chip set and even processor makers, major system houses are just rolling out new products based on the current DRAM technologies, and they don't seem to be in any hurry to adopt the new memory architectures, according to sources.
This is especially true in the troubled PC market. At present, many PC makers are finally making a transition from plain-vanilla synchronous DRAMs to 200- (DDR200) and 266-MHz (DDR266) versions of double-data rate SDRAMs. At the high-end, PC makers are now ramping up systems with Rambus Inc.'s RDRAM technology, it was noted.
It appears that the DDR SDRAM market is finally taking off, thanks in part to Intel Corp.'s recent move to launch a chip set based on this technology.
Now, DRAM makers want system houses to adopt the faster and more-profitable DDR333 SDRAM technology, but the major PC makers are reportedly balking. "We would love to sell the PC makers DDR333 right now, but the OEMs are not dying to adopt the technology," said Mueez-Ud Deen, director of marketing for DRAM and graphics memory at Samsung Semiconductor Inc. of San Jose.
"There is a hesitancy among the system houses to adopt new technology, because the market has been so soft," Deen said. "They are just barely getting their act together with DDR266," he told SBN at the Platform Conference.
But still, vendors are racing each other to develop DDR333 products in order to beat their competitors to the punch. For example, Taiwan's Nanya Technology Corp. is reportedly the first DRAM maker to bring up
its DDR333 chips into production. Another Taiwanese vendor, Silicon Integrated Systems Corp. (SiS), rolled out the first chip set that supports DDR333.
This week, South Korea's Samsung announced its first DRAMs that support DDR333, and the possible follow-on, DDR400 (see today's story). And next month, Taiwan's Via Technologies Inc. will launch a DDR333-enabled chip set, said Richard Brown, director of marketing for the Taipei-based company.
Samsung is sampling its DDR333/400 SDRAMs right now. System manufacturers are expected to ramp up their DDR333/400-enabled products "in August or September," Deen said.
Others believe that DDR333 will ramp up in 2002 as well. "We're sampling DDR333," said Mike Seibert, strategic marketing manager for Micron Technology Inc. in Boise, Idaho. "We plan to get DDR333 up and running this year," Seibert told SBN at the Platform Conference.
"There is also a lot of interest in DDR400, because of Intel," he said, noting that Intel's Pentium 4 processor utilizes a 400-MHz front-side bus.
Others had different opinions. DDR333 will not take off until 2003, while DDR400 has no chance for success in the market, declared Jim Sogas, vice president of sales for Elpida Memory (USA) Inc. in Santa Clara, Calif. Elpida is a joint DRAM venture between Japan's Hitachi Ltd. and NEC Corp.
Instead of DDR400, the market will directly shift from DDR333 to a next-generation DDR SDRAM technology called DDR-II, Sogas said. "We won't see DDR333 in any volumes until next year," he said. "We won't see DDR-II in volumes until 2005," he told SBN.
Still others believe the transition from DDR333 to DDR-II will occur much faster. DDR333 "is a speed bump," said Chee Ho, director of product marketing at Infineon Technologies Inc. in San Jose. "DDR-II, in my mind, will be out in '03. Volumes should hit in '04," he said during a panel discussion at the San Jose conference.
In any event, the DRAM market is still a lose-lose proposition. On one hand, DRAM makers can't seem to convince system houses to adopt new memory technologies fast enough. And then on the other hand, DRAM makers can't seem to recoup their massive R&D investments.
"The life cycle for a DRAM architecture is so short," Ho lamented. "We may never be able to get back our R&D investments," Ho said during the panel discussion.