Hynix is still trying to recover from a fire at one of its fabs
The DRAM market pretty much bottomed out a few years ago and has never fully recovered, though we've seen prices slowly rise from time to time. In most cases we're only talking about a few dollars difference for a memory kit, which isn't so bad except that it adds up over time. That trend is likely to continue throughout 2014 as SK Hynix struggles to fully resume wafer production at a fab that suffered fire damage in China.
Prices likely won't return to normal until next year
DRAM prices are on the rise after a Hynix fabrication plant fire in Wuxi, China. After a September 4th blaze that raged on for nearly two hours, the plant was left ravaged, filled with damaged equipment and problems that have caused DRAM prices to inflate up to 35 percent.
Maybe PC component and mobile device prices won't rise, after all
News of a fire at SK Hynix's plant in China blazed across the Internet earlier this week, leading to speculation that prices for for devices like solid state drive (SSDs), tablets, and smartphones would all see a spike. Pictures showed black smoke billowing from the facility, and based on similar incidents to other memory makers in the 1990s, TrendForce surmised it might be six months or more before Hynix is fully operational.
Samsung and Hynix, two of the world's largest NAND flash memory producers, are reportedly planning to scale back production in order to deal with an oversupply situation that is forcing prices down. Toshiba is said to have already slowed down its operations at one of its Japan plants for the very same reason, and now that the first domino has fallen, others are expected to follow suit.
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.
The eggheads over at HP Labs announced that they're putting their brains together with the geeks at Hynix Semiconductor to turn memristor technology into a shipping product, one that will take the place of all kinds of storage mediums.
"We believe that the memristor is a universal memory that over time could replace flash, DRAM, and even hard drives," says Dr. Stanley Williams, HP Senior Fellow and IQSL (Information and Quantum Systems Laboratory) founding Director.
The two companies will jointly develop the once theoretical technology in the form of Resistive Random Access Memory (ReRAM), a non-volatile memory constructed from materials that change resistance when applying voltage.
Where this technology ultimately leads is wide open. HP Labs says ReRAM will see use first as a replacement for flash memory with chips that run no less than ten times faster while using ten times less power than their flash memory counterparts. But looking longer term, memristors can also perform logic functions and could eventually perform computational tasks where data is stored, leading to much faster PCs.
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."
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.
The FTC was investigating the world’s four largest manufacturers of NAND flash memory: two in South Korea, one in Japan, and one in the United States. The four companies investigated are unnamed in the report, leaving us to wonder who they are. The report, however, does tell us the world’s four largest NAND flash memory manufacturers are Samsung and Hynix (in South Korea), Toshiba (in Japan), and SanDisk (in the United States). Perhaps it’s not such a mystery after all.
NAND flash memory, which is cheap to produce, is used in digital music players, digital campers, USB memory sticks, and the like. An over-production in the latter part of the decade lead to a downward spiral in prices, which some manufacturers are alleged to have perpetrated to gain market share. Manufacturers claim that pricing was more a factor of oversupply and technological advances, which the FTC seems to agree with, finding no evidence of price-fixing on the international level, and limited evidence of price-fixing on the domestic level.
Hynix today announced what it claims are the industry's first 2Gb (gigabit) GDDR5 chips using the 40nm manufacturing process. Boasting 7Gb/s of bandwidth and processing power of up to 28GB/s with a 32-bit I/O, these rank as the highest density graphics memory available.
But it's not all about sheer speed. Hynix says its new 2Gb chips also impress on the power consumption front. With an operation voltage of 1.35V, energy consumption drops down by 20 percent over previous parts built on 50nm technology, the company claims.
Hynix will begin mass producing the new chips in the second half of next year to coincide with increased demand for high-performance graphics memory.