It was being reported last week that Micron Technology issued a bid of $1.5 billion to take over Elpida Memory, which had fallen on tough times after a prolonged slump in the DRAM market, and it now appears as though Micron is the frontrunner to acquire the bankrupt memory maker. Toshiba and Globalfoundries were two other names that had been thrown around as potential suitors, but either they didn't bid, or they were outbid by Micron.
The dirty little secret about DRAM is that we're all underpaying for computer memory, and most of us know it. When the DRAM bubble burst, prices plummeted faster than Lindsay Lohan's career, which is why OCZ moved away from selling memory and starting hawking solid state drives, a segment that's overpriced just like DRAM used to be. It's starting to look like the DRAM market might never regain it's swagger from a decade ago, but there are still times when you should consider stocking up on memory. This might be one of them.
Even though all the focus is on hard drives and the aftermath of the Thailand floods, DRAM manufacturers have fallen on hard times, too. DRAM has never been cheaper, and while that’s good for me and you, it’s hard to run a business if you’re basically giving away the product. Japanese DRAM maker Elpida Memory may be learning that lesson the hard way right now; rumors say that the Japanese government is pushing hard for Elpida to join forces with Toshiba to try and keep the business afloat.
We've been extensively following the ups and downs (mostly downs) of the DRAM market, and that's one business we're glad we're not a part of. Back in late 2008, A-DATA chairman Simon Chen said the DRAM market was the worst it has been in 15 years, and things haven't gotten a whole lot better since then.
Making the best of a bad situation, Samsung in the third quarter of 2010 became the only Top 5 DRAM supplier to achieve revenue growth, positioning itself as the dominant chip maker, market research firm iSuppli said. Samsung sold $4.4 billion worth of DRAM in the third quarter, up 14.3 percent from $3.8 billion in the second. Here's how it breaks down for everyone else:
Hynix: $2.24 billion Q3/ $2.31 billion Q2
Elpida: 1.73 billion Q3 / $1.91 billion Q2
Micron: $1.12 billion Q3 / $1.14 billion Q2
Nanya: $439 million Q3 / $473 million Q2
"Samsung has been vocal about its desire to expand its DRAM market share to as high as 50 percent," said Mike Howard, senior analyst for iSuppli. "The third-quarter results show Samsung has put its money where its mouth is. By investing heavily in expanding product and advancing its manufacturing technology, the company has been able to cut pricing and to eat into the market share of its competitors."
Samsung increased its market share from 35.4 percent in Q2 to 40.7 percent in Q3 and is on track to reach its goal in 2011.
Elpida, Japan's biggest player in the DRAM market, announced today it has developed a 30nm class 2Gb DDR3 SDRAM for PCs and consumer electronics. According to Elpida, it's the industry's smallest 2Gb DDR3 around.
The smaller chip size allows Elpida to achieve a 45 percent higher chip yield per wafer compared to its 40nm products, the company claims. In addition, Elpida says the shrink will help contain rising chip costs associated with process migration. And as for JEDEC specs, everything is kosher.
"Elpida's new chip meets the JEDEC specs for the high-speed DDR3-1855 and 1.35V low-voltage, high-speed DDR3L-1600 memory chips, both expected to become mainstream industry products in 2011," Elpida said. "Also, the 30nm DDR3 SDRAM is eco-friendly. As a DDR3 SDRAM it achieves one of the industry's lowest levels of electric current usage (approximately 15 percent less operating and approximately 10 percent less standby usage compared with Elpida's 40nm products)."
Elpida said it will begin sample shipments in December 2010, with volume shipments slated for the same month.
There's nothing wrong with thinking small, especially in the technology sector. Take Elpida for instance, Japan's DRAM market leader which just announced the development of a 2Gb (gigabit) DDR2 Mobile RAM. According to Elpida, this is the DRAM industry's smallest ever LPDDR2 chip.
"The new 2Gb DDR2 Mobile RAM was developed to target the smartphone and tablet PC markets," Elpida explains. "In addition to featuring low operating voltage of 1.2V, it achieves a 1066Mpbs high-seed data transfer rate and can reach 8.5GB/s for a 64-bit system configuration. Because it uses roughly 30 percent less operating current compared with Elpida's existing 50nm products, the new Mobile RAM is an eco-friendly DRAM that contributes to extending the operating time of mobile devices."
Elpida says its new DDR2 chip is the company's bread and butter product from its 40nm process line at its Hiroshima plant. Samples of the chip will begin shipping in August, with mass production slated for September.
Elpida Memory is well known among the home consumer crowd, but that might change in the coming months. The Japanese DRAM maker this week expanded an alliance with Spansion, the former flash venture between Fujitsu and AMD, and plans to start selling its own branded NAND flash memory products.
"The alliance with Spansion and the licensing of Spansion NAND IP enable Elpida to develop advanced NAND products which, when combined with our leading DRAM products, allows us to better service markets including cellular handsets and digital consumer," said Yukio Sakamoto, president and CEO of Elpida, in a statement.
Venturing into NAND flash memory is somewhat of a new venture for Elpida, which up to this point has focused primarily on DRAM-related products, such as memory for PCs and servers, and memory chips for graphics boards and mobile products.
Thirty-three states, including California, Florida, Massachusetts, New York, Pennsylvania, and others, will receive $173 million from six DRAM makers to settle a suit accusing them of fixing prices for products between 1998 and 2002. Companies named in the suit include Micron, NEC, Infineon, Hynix, Elpida, and Mosel Vitelic.
"These companies conspired in an illegal global scheme to fix prices on chips used in computer equipment sold to consumers, schools, and government offices," California Attorney General Edmund 'Jerry' Brown Jr. said in a statement. "The large price tag of this settlement should serve as a warning that we will crack down on any manufacturers around the world that choose to gouge consumers through illegal price-fixing schemes."
It is yet to be determined how much each company will pay towards the $173 million collective settlement, which is to be doled out over the course of two years plus interest to the affected consumers, schools, and government offices.
"The settlement money is welcome, but the illegal overcharging never should have happened in the first place," Brown added. "Especially when times are tight, schools and government agencies can't afford to be ripped off by companies that violate our anti-trust laws to keep profits high."
Elpida, a global supplier of dynamic random access memory (DRAM), today announced that it had completed development of a high-density, high-speed 2Gb (that's gigabit, not gigabyte) GDDR5 chip built on a 50nm manufacturing process.
This is Elpida's first foray into the graphics DRAM market, and not a bad way to make a splash. Developed at the company's Munich Design Center in Germany, the 50nm chip uses copper interconnects and boasts low power consumption. By jumping straight to 2Gb, Elpida's chips can be used in everything from game consoles to PC graphics cards, as well as other equipment that can benefit from high-performance memory in areas such as physical simulation, digital image processing, and video conversion, Elpida says.
Elpida's chip, which is rated at up to 7Gbps, will begin sampling to hardware vendors in July 2010. Mass production is expected to kick off in the third quarter of 2010.
Following an extensive investigation into alleged price fixing violations, the European Commission found nine memory makers guilty of wrongdoing and fined them a collective $404 million.
The companies involved include Samsung, Infineon, Hynix, Elpida, NEC, Hitachi, Toshiba, Mitsubishi, and Nanya, all of which submitted settlements admitting their liability for infringement, according to reports. Micron would also have been included, but ultimately was not fined since it told the Commission about the cartel as far back as 2002.
"You may think that to use the word 'settlement' next to the word 'cartel' sounds quite strange," Almunia said. "So let me explain right away that we are not compromising on cartels, with or without a settlement. A cartel is the worst violation of competition rules since its object is to collude against the interests of other companies and of consumers."
Samsung received the biggest fine at $145.7 million, with Infineon receiving the second largest fine at $56.7 million. The cartel is said to have operated from July 1, 1998 and June 15, 2002.