The worldwide memory chip market won't take off again until the third quarter of next year, an official from the world's largest memory chip maker, South Korea's Samsung, forecast yesterday.
In addition, Kim Ilung, vice president of memory marketing at Samsung, said he doesn't expect to see strong demand for double date rate (DDR) memory chips, a new technology that is angling to become the industry's preferred high-speed memory.
But Kim has reasons to doubt the success of DDR.
Samsung has bet its future on Rambus memory, which is competing with DDR to become the industry's high-speed memory standard.
Currently, just Samsung and Japan's Elpida offer Rambus memory chips, and both firms hope to cut prices as production ramps up.
Meanwhile, Taiwanese chipmakers Mosel Vitelic Inc (
Kim said he believes the market for DDR chips could be as high as 7 percent of the overall memory chip market. But for Rambus, he expects the memory chip to command as much as 12 percent of the overall market.
Kim predicted the total supply of DRAM chips would grow by 50 percent this year, while demand will trail at a slower rate of only 40 percent. This, he said, is the main factor behind falling memory chip prices.
The price of DRAM memory chips has been falling since the fourth quarter last year. Earlier this week, market prices on the DRAMexchange.com Web site slid as low as US$2.40 per chip for 128Mbit DRAM, and industry standard 64Mbit chips fell as low as US$1.25 per chip.
Most DRAM chips are bought and sold on a spot market like commodities. DRAM chips ordered by contract usually sell for about US$1 over spot market prices.
Kim, however, pointed out that the lowest manufacturing cost possible for 128Mbit DRAM is US$4 per chip, highlighting the hardship companies are facing in the current market.
Falling chip prices have already hit the bottom lines of every DRAM maker in Taiwan. During August last year, the height of good times for the DRAM industry, Taiwanese DRAM makers such as Winbond Electronics Corp (華邦電子) reported rising monthly sales and recorded fat profits. This month, all of Taiwan's DRAM manufacturers expect to run losses.
DDR sales could get a boost when VIA Technologies Inc (威盛電子) begins shipping a chipset designed to work with Intel Pentium 4 microprocessors and DDR memory.
Currently, the Pentium 4 processor is available with just Rambus memory.
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