It's been a wild downward ride in the memory market these past twelve or so months, one in which DRAM makers are more than eager reverse course. And that's exactly what's happening. According to data gathered by DRAMeXchange, DRAM contract prices have climbed in the second half of April. The data shows that prices of 1GB DDR2-667 DIMMs has gone up $9 and 2GB DDR2 $18, representing a 6 to 11 percent gain.
And this is just the beginning, says DRAMeXchange. Citing un-named market sources, the firm says Elpida Memory will most likely discontinue shipments to the spot market, while both Powerchip Semiconductor Corporation (PSC) and Kingston also plan to limit their shipments, at least until June. This could prove to be significant, as Elpida and PSC account for almost 60 percent of the sport market. Elpida's goal is to raise quotes by as much as 50 percent.
But before you panic and stock up on all the RAM you can afford, DRAMeXchange predicts DRAM spot prices will only increase to a range of $1.20 to $1.50, up from $1 to $1.20. This means DDR2 modules will probably go up, but not by as much as Elpida (and other DRAM makers) are hoping.
The memory market is in desperate need of some good news, and it just might be getting it. Citing un-named industry sources, DigiTimes says Taiwan's DRAM chip suppliers are eyeing an early recovery as the spot price of DDR2 1Gb eTT chips continues to rise significantly.
DDR2 chips climbed 6 percent to close at $1.2 yesterday, and is up again slightly to $1.21 today. According to DRAMeXchange, estimated DDR2 contract prices will very likely rise anywhere from 15 to 20 percent sequentially in the second quarter of 2009, after having remained flat since February.
That means if you're looking to score one final DDR2 upgrade this year, now might be the best time to do so.
Slumping demand continues to take its toll on the memory chip industry. Micron, the largest U.S. maker of memory chips, said earlier this week that it has been particularly affected by decreased demand for specialty DRAM products, and as a result it plans to phase out 200mm wafer manufacturing operations in its Boise, Idaho facility.
"This action will reduce employment at Micron's Idaho sites by approximately 500 employees in the near term and as many as 2,000 positions by the end of the company's fiscal year," Micron said in a statement. "The company has sufficient manufacturing capacity remaining and does not expect any disruption in product supply required for customer needs."
Micron went on to say that these latest job cuts were not anticipated and not part of the 15 percent global workforce reduction it announced last October.
The chip maker said it will continue to operate its 300mm research and development fabrication facility at the Boise site. Financially, Micron expects cash restructuring charges to be in the vicinity of $50 million, which Micron says will generate a gross annualized operating cash benefit of $150 million.
Don't worry, that 6GB triple-channel DDR3 kit you just picked up for your new Core i7 build isn't going to go out of style any time soon, but Samsung did take us one step closer to DDR4 this week. The memory chip maker said it has developed and validated its first 40nm DRAM chip, and if all goes to plan, it will consume nearly a third less power than current 50nm chips.
Samsung's shrunken chip technology will first be used in a 1GB DDR2-800 SO-DIMM module and has been validated for Intel's GM45 platform. The company also said it plans to apply its 40nm technology to develop a 2Gbit DDR3 device for mas production by the end of the year.
"This definitely moves Samsung ahead very aggressively in terms of its manufacturing facilities," said Bob Merritt, a founding partner of market research firm Convergent Semiconductors LLC
But the biggest news is Samsung's claim that the move to 40nm is "a significant step" toward developing "ultra-high performance DRAM technologies" like DDR4, though the company didn't offer any other details.
One of the concerns in the transition to Core i7-based platforms was how Intel's new chips would fare with DDR3 memory exceeding 1.65V. Early reports warned that the higher voltage kits might potentially pose a risk to the processor, prompting memory makers to focus on triple-channel kits with lower voltage than their dual-channel counterparts. But voltage restrictions could become even less of a concern now that Elpida has completed its development of a 50nm process DDR3 SDRAM.
Elpida claims its new DRAM features the lowest power consumption in the industry, requiring as little as 1.2V, making them good candidates for eco-conscious server environments and data centers. The 2.5Gbps-capable chips can also operate at 1.5V and Elpida says initial applications will include high-end desktops.
Mass production of the 50nm chips is scheduled to being in Q1 2009.
The DRAM industry is facing its toughest time in the past 15 years with not much of a light at the end of the tunnel. Most memory companies have already reduced production and scaled back the workforce, but it has done little to change the fact that DRAM prices have already dropped close to cost. Could a government bailout be the answer?
That's exactly what ProMOS chairman ML Chen wants to see happen. Chen, whose company has already suffered losses adding up to US$675 million in the first three quarters of 2008, is calling for the Taiwan government to keep the industry afloat. Total losses for the entire industry currently sit at US$2.73 billion, a number which is expected to grow in the fourth quarter.
Chen, who said it would be a pity of the government gave up on DRAM makers who have given so much to the nation's semiconductor industry, would like to see some fundamental changes occur, like the development of home-grown technologies. Chen also said that the government should offer aid programs and restricted bank loans, which could only be used for technological research and development and not for capacity expansion.
Should the Taiwan government step in? Hit the jump and post your thoughts.
PC builders continue to jump for joy at the rock bottom prices of memory, leading to an easy decision to go with a 4GB kit in lieu of a 2GB kit of RAM. Never has memory been so cheap, and some say the market for memory makers is the worst it has been in 15 years.
And therein lies the problem. While end users are celebrating low prices, DRAM makers have been cutting back production, reducing workers' hours, and laying off employees all in an attempt drive prices back up and cope with decreased revenue. But it isn't enough, and now it appears that memory makers have reached a crossroads.
"We believe that the DRAM industry has entered the key adjusting stage of 'reduce or retire,'" DRAMeXchange stated. "The big scale reduction is now in progress and even some DRAM vendors will be out of the DRAM market in 2009. This adjusting wave will continue until the demand and supply come to balance."
According to DRAMeXchange, the cash cost of the market's 70nm technology is between $1.3 and $1.5 and is expected to drop to $1.0 to $1.2 as DRAM makers migrate to the 6x nm process. Total 12-inch wafer output continues to fall, with the reduction for November expected to be 125,000 less wafers, which is equivalent to 10 percent of the total 12-inch wafer output. The situation looks to get even worse in December, with another 17,000-wafer reduction expected, with more reductions possible in January.
"We expect the oversupply situation will be eased starting from the end of Q1 2009," DRAMeXchange said. "Therefore, the DRAM price may have a chance to rebound at the end of Q2 09 and Q3 09 with the rising demand of PC OEMS."
The question is, which memory makers will be left standing by then?
Memory module makers continue to suffer through what some analysts suggest is the worst the DRAM market has been in 15 years with chip manufacturers posting record high losses. To stop the bleeding, most module makers have already cut production in an attempt to drive prices back up, and while that has been met with some success in niche markets (DDR prices are up 30 percent), slumping demand paints a grim outlook for memory makers in the immediate future.
The solution? Send home your workforce without laying them off. That's essentially the strategy some Tawain DRAM and memory module makers are trying to take in an attempt to reduce operating costs, according to DigiTimes. Rather than hand out pink slips, the tech news outlet reports that chip makers are asking employees to take time off without pay.
This isn't an isolated scenario, either. DigiTimes claims that Nanya Technology, Powerchip Semiconducter Corporation (PSC), and ProMOS Technologies have all taken "measures to encourage employees to voluntarily take one work-day off per week without pay in order to help the companies reduce operating costs."
Building a capable PC has turned into a stupid-cheap affair as components continue to fall in price. This is helped in large part by slumping DRAM pricing, which has yet to recover no matter how much DRAM makers would like it to. And it doesn't look like it will happen anytime soon.
According to Frank Huang, chairman of Powerchip Semiconductor Corporation (PSC), memory chip prices will continue to sag so long as the economy struggles, and isn't expected to start an upward swing until at least the second half 2009. Huang pointed out that DRAM prices have already dropped close to cost, forcing manufacturers to cut production. But despite a 20 percent production decrease by the end of the year, the effects on the market won't be seen until December, which will fall well shy of a rebound in DRAM pricing.
Take advantage of the low prices while you can, but if Huang's assessment proves correct, you needn't feel rushed.
Anyone who has recently put together a DDR2-based system would have found themselves jumping for joy when pricing out system memory. Kits that commanded a premium less than two years ago can now be had for under $100, and that's before any applicable mail-in-rebates. Even name-brand 4GB kits are insanely affordable, and the days of having to spend several hundred dollars on newer DDR3 modules are gone, at least now.
The low pricing structure has been that way for some time now, and while system builders couldn't be happier about it, the mood is decidely different among DRAM manufacturers. Both Elpida Memory and Powerchip Semiconductor Corporation (PSC) have said they plan to cut production, just as other manufacturers have done, but so far it has done little to correct the oversupply problem the DRAM industry faces. And according to A-DATA chairman Simon Chen, improvement is only likely to come if a memory chip maker decides to leave the market. Chen went on to say that 2008 has been the worst year for DRAM in the past 15 years.
Eventually the market will bounce back. If you're in the market for RAM, consider buying sooner than later and enjoy the rock bottom pricing while it still exists. And hey, if you know of a good deal on memory, hit the jump and let us know!