The ever-volatile DRAM market continues to battle its share of supply and demand issues, the latest of which could affect smartphones and other gadgets with embedded RAM. Citing un-named industry sources, DigiTimes says prices for 512Mbit DDR, which are used for multi-chip package (MCP) memory products found mainly in mobile handsets, have shot up over 40 percent the past month due to tight supply.
The average spot price for 512Mb (64Mbitx8) SDRAM has gone from $1.53 a month ago to over $2.20 currently, the sources said. But mobile handsets aren't the only sector being affected.
Demand for 64Mb and 32Mb DDR memory in DVD players, hard drives, consumer electronics, and even home appliances have started to exceed supply.
Part of the reason for the widespread supply and demand issues can be traced to Semiconductor Manufacturing International Corporation (SMIC)'s withdrawal from the SDRAM foundry business. Prior to discontinuing the line earlier this year, SMIC used to allocate capacity of around 20,000 wafers for production of SDRAM chips.
Micron, a major player in the memory chip market who also sells its own line of computer memory kits under its Crucial branding, appears unfazed about the looming memory shortage industry analysts have been squawking about. Shortage or not, Micron isn't going to increase production, and instead is focusing on process geometry shrinks.
Micron isn't the only unwilling to ramp up production. Samsung's main chip guy, Oh-Hyun Kwon, warned DRAM makers against knee-jerk reactions into capacity expansion projects, and said more investments should be made towards advancing memory technology.
Powerchip Semiconductor Corporation (PSC) chairman Fran Huang sang a similar tune, telling DRAM makers they should take a cautious approach to expansion, lest the memory industry repeat the same mistakes all over again and saturate the market.
Don't even bother trying to follow the memory market until you've taken a dose of Dramamine. The DRAM industry has more ups and downs than a Six Flags amusement park, only without all the thrills. According to A-Data, that doesn't look to change in 2010, and you should brace yourself for a memory shortage in the latter part of the year.
Speaking at a recent company event, A-Data chairman Simon Chen said strong PC replacement demand in both the consumer and business sectors will put the squeeze on memory makers to keep up. Chen expects demand to outpace supply by 1-2 percent in the second quarter, and then remain throughout the second half of the year.
Chen attributes the demand to Windows 7, which he says will spark a ton of replacement PC purchases. As a result, expect DRAM prices to go up, a trend we've already been seeing, especially in the notebook memory market.
Samsung on Monday announced what it claims is the industry's first 30nm class DRAM to successfully complete customer evaluations in 2Gb (gigabit) densities.
"Our accelerated development of next generation 30nm-class DRAM should keep us in the most competitive position in the memory market," said Soo-In Cho, president, Memory Division, Samsung Electronics. "Our 30nm-class process technology will provide the most advanced low-power DDR3 available today and therein the most efficient DRAM solutions anywhere for the introduction of consumer electronics and server systems."
According to Samsung, shrinking down to a 30nm manufacturing process allows the company to raise production by 60 percent over 40nm-class DDR3. And as far as consumers are concerned, the company's Green DRAM lowers power consumption by up to 30 percent over 50nm-class DRAM. To give a real world example, Samsung says a 4GB, 30nm module will consume only 3W per hour in a new generation notebook.
Both AMD and Intel have fully embraced DDR3, and as a result, no one wants DDR2 anymore. Demand for DDR2 has fallen by the wayside, while DDR3 is selling through the roof. For Korea-based DRAM makers, the situation has left them with a surplus of DDR2 modules, and they don't want them any more than consumers do.
The solution? Bundle DDR3 modules with DDR2 chips. Doing so will help clear out DDR2 inventories that have been piling up, and will also help keep the price gap between the two standards from widening. According to DigiTimes' industry sources, the strategy is to minimize the impact that a DDR2 oversupply and DDR3 shortage would have on the market.
As it stands, sport market prices for 1.3GHz 1Gb DDR3 chips are averaging about $3.08, compared to $2.50 for 800MHz 1Gb DDR2 chips, according to the latest data from DRAMeXchange.
The new year is supposed to bring about change, but it might just be more of the same, at least in the memory industry. According to Simon Chen, chairman of memory maker A-Data, DRAM chip supply will remain tight throughout most of 2010.
On the plus side, Chen doesn't anticipate any major price hikes. But he did warn that with major producers playing it conservative the past couple of years rather than putting a bigger focus on capacity expansion, supply will have a tough time keeping up with demand.
Chen's comments fall in line with a recent DRAMeXchange report suggesting the market will see a shortage, which seems to be the general sentiment in the memory industry. Elpida Memory CEO Yukio Sakamoto recently voiced the same concern.
As for A-Data, Chen said his company plans to add 3 or 4 new overseas offices, bringing the total to 16 or 17. The new offices will most likely be opened in China, India, or both.
Timing the purchase of RAM can be as maddening as trying to predict the stock market. It's entirely possible to plunk down a wad of cash on a memory kit, only to watch as prices plummet a week later. That said, if you're in need of a memory upgrade, now might be a good time to buy.
Or at least that's the message we take away from market research firm DRAMeXchange, who warns that a DRAM shortage looms. The firm notes a lack of capital investment as the reason why, adding that there's already a shortage of some memory densities because of a recovery in the PC market. DRAMeXchange says some OEMs paid as much as $55 for 2GB DDR2 modules in the sport market.
The firm says that year-on-year PC shipment growth could climb to 13 percent in 2010, putting pressure on memory makers to keep up with demand.
There's not much time left to get on Santa's 'Nice' list, and if your'e hoping to score some RAM this holiday shopping season, that's a place you'll want to be. Why? Because memory makers are forecasting a DRAM price drop in December.
In addition to the usual seasonal demand, DRAM vendors say it's likely chip makers who have already turned a profit will decide to flex their cost competitiveness muscle and slash prices to drive up shipments.
The latest rumblings run counter to previously reports which suggested that major DRAM producers would try to push chip prices upward, but that no longer appears likely. The opposite has already begun, with the average spot price for branded 1Gb DDR2 chips trending down 0.76 percent to close at $2.60 on Tuesday, according to data from DRAMeXchange.
Talk about déjà vu. it's been a rough year-plus for DRAM manufacturers, who have had to contend with an oversupply of chips, falling prices, and a global recession on top of it all. At least one vendor said the DRAM market was the worst he'd seen it in 15 years. So it's a little bit curious that after finally showing signs of a rebound, memory makers appear stoked about an expected reduction in production costs in 2010.
It would make sense, provided the savings aren't passed on to the consumer, but that's usually not the way it works. Nevertheless, as memory makers compete with each other in a race to shrink dies, production costs are set to go down pretty significantly, DigiTimes reports.
Samsung has already adopted a 56nm process for over half of its DRAM output and has been churning out DDR3 chips using 40nm technology in small volume since the fourth quarter. By the second half of 2010, Samsung is expected to be heavily focused on 40nm.
Eplida and Nanya are also flirting with shrunken dies. And according to a recent iSuppli report, the worldwide DRAM industry has the manufacturing capacity to last through 2012.
It all sounds positive, until you consider the current condition of the memory market. But hey, from a consumer side, this is gravy. Bring on the faster, less expensive DDR3 modules.
The DRAM market slumped to a 15-year nadir last year. But it is now moving briskly on the road to recovery. According to DRAMeXchange, contract prices for 1Gb DDR2 and 1Gb DDR3 chips shot up by 15.7% and 10.9%, respectively, in the late part of October. Nanya Technology's vice president and spokesperson Pai Pei-Lin expects an encore from the DRAM market in November. He believes November will bring yet another double-digit rise in contract quotes for DRAM memory.