The Downs [and Ups] of the DRAM Market
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The good news is that it's going to get better. The bad news is that it's going to get worse first. That pretty much sums up the price swings in the market for the commodity computer memory chips known as Dynamic Random Access Memory, or DRAM.
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But low-priced imports did hurt US memory makers
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Blog: Bad: AMD lost $600 million this quarter. Good: Chip shipments surged.
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Billions in emotion Analysis Even the most subjective Opteron advocates could not have predicted this. Over the past two years, AMD's flashy server chip has arguably affected the fortunes of five major technology companies in ways that extend far beyond market share and revenue swings. If so inclined, you could make a strong case that Opteron and its marketing inertia have turned losers into winner and vice versa at an unprecedented clip. At least, that's what the wisdom of Wall Street seems to be telling us.â¦
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Still expects profits in Q3 '08 AMD says its chugging ever-closer to profitability. Perhaps it's right. The chip fabbing second-banana's losses shrunk in the fourth quarter of '07 â well, sort of.â¦
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For decades, PC performance has jumped and prices have dropped, owing largely to the ability to squeeze increasing numbers of transistors into the computers&#39; silicon brains - but they can&#39;t shrink forever.
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German DRAM (dynamic RAM) maker Qimonda put the construction of an advanced semiconductor factory in Singapore on hold and slashed its planned capital spending for 2008 after reporting a steep first-quarter loss.The company blamed a 40 percent&#160;drop in DRAM prices&#160;for a &#8364;598 million ($866.3 million) net loss in its fiscal first quarter, which ended Dec. 31. Qimonda&#39;s sales reached just &#8364;513 million during the period, down 56 percent from the &#8364;1.17 billion in sales it reported one year earlier.A massive 73 percent drop in DRAM prices over the course of last year has memory chip makers scurrying to realign their business strategies. On Tuesday, Qimonda&#39;s joint venture partner, Nanya Technology, and their joint venture,&#160;Inotera Memories, both posted losses and announced&#160;lower spending&#160;on new production lines for 2008.Qimonda had much the same to say. The company cut its proposed capital spending for fiscal 2008 by &#8364;250 million down to a range of &#8364;400 million to &#8364;500 million. Due to the reduction, the construction of a new 300-millimeter (12-inch) memory chip plant in Singapore has been put on hold, Qimonda said in a statement.The DRAM market took a turn south last year as companies built too many new factories and demand for new PCs armed with Windows Vista failed to meet expectations. The resulting glut sent DRAM chip prices tumbling.The contract price of 1Gb DDR2 (double data rate, second generation) DRAM chips that run at 667MHz fell to $1.81 each as of Jan. 21, according to DRAMeXchange Technology, which operates a clearinghouse for the chips. The chips were $3 each at the start of October, when the current price slump hit.Qimonda noted the 40 percent decline in the October to December period was one of the strongest declines ever, and that even previously announced measures to cope with the price slide could not compensate for the difficult market environment.The company also said it is already reassessing its outsourcing strategy. Qimonda has worked with several partners in Asia to contract manufacture its chips and in technology transfer schemes aimed at sharing the cost of research and development. These partners include Semiconductor Manufacturing International (SMIC) of China, as well as Nanya Technology and Winbond Electronics of Taiwan.&#160;
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(InfoWorld) - After a much longer than expected delay, DDR2 (double data rate, second generation) has finally taken over as the most popular memory chip used in PCs. The crossover to DDR2 from the previous mainstream chip, DDR-400 (double data rate, 400 megahertz) took place this week on both the spot DRAM market and the contract market, industry researcher DRAMeXchange Technology said Wednesday. It's been a long time coming. The chipsÂ entered the market far later than expected, mainly due to heat problems. In fact, DDR-400 , which has reigned as industry leader for the past few years, was supposed to be a stop-gap chip with such a short life span that some companies hadn't even planned to support it with a chip set. But when DDR-400 showed up on Intel's product road map in late 2002, component makers began to move forward on DDR-400, and put off developing compatible parts for DDR2. Intel microprocessors power around 80 percent of all PCs, making an Intel stamp of approval vital to computer industry parts makers. Advanced Micro DevicesÂ (AMD) helped further put off demand for DDR2 this year. The company waited until the middle of the year toÂ launch its first desktop and laptop processors that support DDR2Â because it didn't think initial versions of the chip added substantial performance benefits to AMD processor-based systems, yet commanded a higher price. The first DDR2 chips ran at 400MHz and then 533MHz, but AMD waited until DDR2 chips running at 667MHz reached mass production levels, which lowered price and ensured a plentiful supply. Currently, a wide range of Intel and AMD systems support DDR2. DRAMeXchange noted Wednesday that prices may become an issue again for DDR2. Prices for the chips rose 8.8 percent last week, compared to the previous week, the company said, due to strong demand for PCs. The market researcher expects prices to remain strong throughout September, the traditional time when back-to-school PC buying increases buying activity in the DRAM market. Â
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Keeping spotty head above US$1 water The DRAM industry has seen DDR2 spot prices spike by 15-20 per cent in the past month, with eTT chips outpacing branded equivalents.â¦
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Lower sell-throughs lead to unhappily high inventories.
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In a rough year for semi stocks, Advanced Micro Devices has thrived. Is there more room to run? NEW YORK (CNN/Money) - Tech stocks have had a nice year-end rally but that hasn&#39;t been enough to pull the chip sector out of the red.
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Figuring out which way the winds are blowing in the chip sector just got harder. Recent news suggests the all-encompassing rally off the September lows has ended and the sector&#39;s investors will have to be much more selective going forward.
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Is the chip giant bargain-shopping or just wasting money?
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By Bob Mims, The Salt Lake Tribune  Feb. 13--Fallout from Micron Technology Inc.'s dire price forecast for  the flash-style memory that powers everything from iPods to laptops sent its  stock and that of other semiconductor makers tumbling Monday.
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A weaker-than-expected premarket auction, followed by two brisk days of trading, tell a tale of tech IPO market. By Daniel B. Wood | Staff writer of The Christian Science Monitor.
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(InfoWorld) - Falling prices for DRAM chips and microprocessors badly hurt the global semiconductor market, which will likely limp to a sales increase of just 2.5 percent in 2007, according to an analyst report released Thursday. Semiconductor sales were originally expected to rise by 6.4 percent over 2006 levels, according to the study from Gartner. But chip sales in the first quarter of 2007 were more than 5 percent lower than in the fourth quarter of 2006, leading the research company to cut its 2007 market revenue forecast to $269.2 billion. The numbers reflect a continuingÂ price war between Intel and Advanced Micro DevicesÂ (AMD), as the processor vendors struggle for market share. That war has already taken a toll on AMD, which blamed slow chip sales for itsÂ $611 million lossÂ in the first quarter of 2007. Intel, a much larger company, has continued to post profitable quarters, but on May 2 addedÂ another 1,000 layoffsÂ to a corporate reorganization it began in 2006. Conditions areÂ worst of all in the DRAM sectorÂ of the industry, which will see its revenue drop 11.1 percent in 2007 to $30.5 billion, then limp to a smaller decline in 2008, according to Richard Gordon, research vice president at Gartner. The forecast could spell trouble for Samsung Electronics, the world's largest producer of DRAM and NAND flash. However,Â Samsung's pain may be dulledÂ if tumbling chip prices attract consumers into stores, as prices for end-user products using NAND flash memory like PCs, iPods and digital cameras are also expected to drop. In the long run, chip prices will continue to fall throughout 2007 as semiconductor manufacturers try to clear excess chips out of their warehouses, Gordon said. Chip manufacturers do have some cause for optimism, however, as they have already begun to control that inventory by cutting production. If that effort succeeds, the industry could return to modest growth of 8.7 percent in 2008 and 7.2 percent in 2009, he added. Â
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It was by any measure a stellar year for the world's leading microprocessor manufacturer, but what's disappointing investors this quarter is the disheartening news that 2007 is over.