Global Sources
EE Times-India
Stay in touch with EE Times India
EE Times-India > Memory/Storage

DDR3 delay spells trouble for DRAM makers

Posted: 31 Mar 2009     Print Version  Bookmark and Share

Keywords:DRAM makers  DDR3  DRAM technology 

Is the transition to DDR3 delayed—again? If so, this could be a blow for DRAM makers, who are looking for relief in the midst of a memory downturn.

DRAM makers continue to push out the target date for DDR3, the follow-on technology to today's DDR2 SDRAM parts. South Korea's Samsung Electronics Co. Ltd and others believe that DDR3 will become the mainstream DRAM technology by year's end.

In a report, however, Needham & Co. LLC provided a mixed outlook for memory-module maker Smart Modular Technologies Inc. and warned about delays for DDR3.

"We maintain our 'Hold' on SMOD (Smart Modular) after the company posted better than expected profits, but provided conservative outlook," said Edwin Mok, an analyst at Needham. "We believe ongoing weakness in enterprise spending and slow adoption of new DDR3 platforms will continue to limit core DRAM business."

DDR3 could be late to the party. "Given softness in the server sector, we expect weak demand for high-end server memory over the next 1-2 quarters, and major transition to DDR3 to delay to CY 2010," he said.

"I never really believe DDR3 will grow to anything meaningful this year," he said in an e-mail. "None of the DRAM chipmakers want to push it, especially with no premium but higher costs. The only driver is Intel Nehalem, but looks like that will be a slow ramp, especially with slower demand."

He was referring to Intel Corp.'s next-generation processor, dubbed Nehalem, a 45nm device based on high-k and metal gates. The device boasts an integrated memory controller that enables three channels of DDR3 1,066MHz memory, resulting in up to 25.6GBps memory bandwidth.

In any case, a DDR3 delay could be trouble for Elpida, Hynix, Micron, Samsung and others, many of which were banking on DDR3 in 2009. So far, DDR3 has shown up mostly in high-end PCs and gaming systems, where its ability to access information faster than its predecessor has a noticeable impact on advanced graphics, video processing and other computing intensive applications.

DRAM—which even for the volatile IC industry is especially prone to huge boom- and bust-cycles—is hurting. DRAM and the broader memory IC markets were already in the midst of a tough year when the world financial crisis hit and the market collapsed.

All DRAM makers are losing money now, including Samsung. And the handwriting is on the wall for Q1 and beyond: More losses and pain.

Better results
Smart Modular, for example, said sales for the second quarter of fiscal 2009 were Rs.542.44 crore ($109.1 million), compared to Rs.700.05 crore ($140.8 million) for the first quarter of fiscal 2009, and Rs.817.88 crore ($164.5 million) for the second quarter of fiscal 2008.

GAAP loss for the second quarter of fiscal 2009 was Rs.9.45 crore ($1.9 million), or minus Rs.1.49 ($0.03) per share, compared to a loss of Rs.343.06 ($6.9 million), or minus Rs.5.47 ($0.11) per share, for the first quarter of fiscal 2009, and Rs.56.68 crore ($11.4 million), or Rs.8.95 ($0.18) per diluted share for the second quarter of fiscal 2008.

"While revenue of $109 million (Rs.541.94 crore) was below guidance, gross profit of $24.1 million (Rs.119.82 crore) and non-GAAP EPS (ex stock comp) of $0.06 (Rs.2.98) both beat guidance," Mok said, adding the company saw a surge in its solid-state drive (SSD) lines. "Stronger profit came from year-end strength of Adtron SSDs and higher mix of networking products, offsetting by weakness in server/desktop units and low ASPs."

For the third quarter of fiscal 2009, Smart estimates net sales will be in the range of Rs.4,723.32 to Rs.5,220.51 ($95 million to $105 million), gross profit in the range of Rs.845.23 to Rs.944.66 ($17 million to $19 million), and net loss per share will be in the range of minus Rs.2.49 ($0.05) to minus Rs.1.99 ($0.04) on a GAAP basis.

- Mark LaPedus
EE Times

Comment on "DDR3 delay spells trouble for DRAM m..."
*  You can enter [0] more charecters.
*Verify code:


Visit Asia Webinars to learn about the latest in technology and get practical design tips.


Go to top             Connect on Facebook      Follow us on Twitter      Follow us on Orkut

Back to Top