X-bit labs

April 2004 Hardware News Overview (page 5)

Category: Editorial

by Andy Yaschenko

[ 04/21/2004 | 09:34 AM ]

The spot market was feeding on rumors and everything was thrown into the heap: promises that the arrival of i915/i925-based mainboards will make an average PC use 512MB of memory. Add the commotion about the presidential elections in Taiwan and the arguable forecast of Samsung about memory deficit in the second half of the year.

The forecast was really arguable. Today, there are causes for a deficit as the sine curves of demand and supply coincided. But by the end of the year, there should be an opposite situation: average demand and high supply. Contrary to the Koreans’ prognosis, supply will grow: the Taiwanese manufacturers are putting 300mm facilities into operation before the schedule and the supply of DDR chips will be definitely higher in Q3-Q4. If no extraordinary events happen, there’ll be no significant price growth (like 10% or higher) in the fall. Moreover, the manufacturers will be transitioning to 512Mb chips as the “raw material” for mass memory modules. This fact can only reduce the prices, too.

The artificial nature of this monstrous price growth is confirmed by another fact – just compare it to the near-zero growth of mainboard and notebook shipments in March against February. I can believe that the average amount of memory in PCs grew in that time, but not so much! Thus, “waking up” in April-May to notice no i915/i925-based mainboards in retail, the finished transition to the 0.10-micron tech process by all major companies and feeling the smell of the approaching dead season, the memory prices will most likely start to plummet down at the same rate.

Closer to the end of the year, it’s going to be very fascinating to watch the companies change their positions in this race. Someone will ride the wave, but others will drown. Samsung will probably find itself among those lucky companies who end this year with profit. This is the more important for the Koreans as they lost some share of the market in the last year. According to the refined data from iSupply, by 3.6%. At the same time, Samsung is still on top, having 28.6% against the second company, Micron’s 19.1%.

By the way, this share reduction doesn’t mean anything – Samsung simply transferred some of its facilities from DRAM to flash. In this year, however, they put new lines into operation and finish the transition to the 0.10-micron tech process (and start moving towards 70nm), which is going to regain the percent back to the company.

Micron, notwithstanding the last-year growth of 1.1%, will probably reduce its share this year by the same reason: the company has recently announced its intention to take up flash seriously. Well, they should have done that before as the company rolled back to a loss of $28 million in the last quarter with sales declining (although the memory prices were very good!).