30-nm DRAM race starts as market tanks

GOYANG, South Korea – The race to ship 30-nm-class DRAMs has begun and Samsung Electronics Co. Ltd. has taken the early lead.

The 30-nm DRAM race is starting at a time when the market is slowing-if not collapsing, according to a new report from VLSI Research Inc. The first half of 2010 was a banner period for the DRAM industry, but now vendors are wondering if the sky is falling amid a technology race in the arena.

''The memory market, in particular, is cooling off rapidly due to slow demand and increasing supply.  Things have turned ugly for DRAM in the spot market, which does not bode well for the contract market,’’ according to VLSI.

In the process technology race, meanwhile, Samsung was the world’s first DRAM maker to ship a 30-nm-class device, but the memory giant has not specified the exact node for the previously-announced chip. At an electronics show here, Hyun-joong Kim, an engineer for Samsung’s Memory Division, described the DRAM as a 2-Gbit DDR3 chip, base on 35-nm technology.  

Elpida, Hynix and Micron are racing each other to take second place in the 30-nm-class DRAM sweepstakes.  Last month, Japan’s Elpida Memory Inc. claimed it had completed the development of a 30-nm-class 2-Gbit, DDR3 SDRAM.

Elpida's new chip is a DDR3-1,866 and 1.35-volt device. Elpida plans to begin sample shipments in December of 2010. Volume production is expected to commence in the same month. Elpida will apply the new 30-nm process technology to its mobile RAM products.

Another vendor,  South Korea’s Hynix, has been shipping 40-nm-class DDR3 SDRAMs.  In various press reports in Korea, Hynix has bolstered its capital spending to accelerate its efforts in the 30-nm DRAM arena.

At the electronics show, Hynix was showing a 30-nm-class DDR3 device. Shipments are due in the first half of 2011, said Jung Hwa, marketing manager for Hynix.

But following a recent and sudden lull in the PC business, she acknowledged that there has been a slowdown in the DRAM industry. The biggest market for DRAMs is the PC and a slowdown in the computer business means trouble for memory makers. Supply will exceed demand and prices usually tumble.    

On the bright side, DRAM makers are seeing an uptick for a new range of applications beyond the PC, such as mobile, tablet PCs and smartbooks, she added.
 
Still, the benefits of 30-nm-class DRAMs are apparent for PCs, datacenter  servers and other systems. These devices reduce power consumption by 14 percent or more over 40-nm-class products, said Samsung’s Kim.  Samsung’s DDR3 SDRAMs operate at 1.35-volts and supports data rates of 1,066-, 1,330-, 1,866- and 2,133-megabits-per-second.

For its part, Micron Technology Inc. has made the transitioned from 50-nm to 42-nm DRAM. In its recent results, however, ''Micron reported weaker-than-expected sales for the quarter ending on August as demand for DRAM and NAND decelerated considerably,’’ according to VLSI Research.
 
''DRAM revenue declined 14 percent on a quarterly basis, due to a 12 percent drop in units, resulting in a disappointing bit growth. Healthy ASPs offset much of the weakness in bit growth,’’ according to the report. ''Samsung appears to be facing similar issues, as the company issued preliminary results for Q3 that were below Street expectations.’’

Don't look now, but the overall market could be falling off a cliff. ''DRAM spot prices continued to unwind at an alarming rate as traders cleared up inventory.  There was some panic early in the week, which saw some non-branded DRAM parts tumbling by more than 7 percent in a single day.  The DRAM market was more stable later in the week thanks to some activity form Chinese buyers, but it remains under tremendous pressure,’’ according to the firm.

''The decline of DRAM continued to accelerate as spot prices plunged across the board.  The overall spot price-per-bit for DRAM dropped a whopping 10 percent following a 2.4 percent decline in the previous week,’’ according to the firm.  ''DDR3 was hit hard again with spot prices for non-branded parts falling by as much as 10 percent.  The decline for branded parts was not as severe, but was still unhealthy with parts declining by more than 2 percent.  Even though spot prices for DDR3 remain at very profitable levels, they’re falling too fast.’’