14 DAY TRIAL // Memory industry is undergoing a process of change, triggered by the advent of the third generation of double-data rate memory modules (DDR3). As this type of memory is becoming cheaper and cheaper, it gets widely adopted in substantially more PCs worldwide. Many companies are focusing on developing 1GB cards using DDR3 DRAM chips, as they may be the next Messiah in the industry.
Inotera Memories is a memory joint venture initiated by Qimonda AG and Nanya Technology. The company has announced that it has begun pilot production of such memory modules early this year, with plans to ramp production for mass availability until the third quarter. "There is already demand for DDR3, and it will increase as the year goes on," said Charles Kau, president of Inotera, during a news conference in Kuei Shan, Taiwan.
According to Pai Pei-lin, a vice president at Nanya Technology, more than 30 percent of DRAM market demand will be for the new DDR3, as the current mainstream technologies support such memory modules. The rise in the DDR3 demand will implicitly lead to the market stop asking for the older DDR2 memory. The DDR3 standard is much improved and offers faster speeds, lower power consumption and higher bandwidth.
DRAMExchange has regulated a $1.81 price for 1GB DDR2 chips that run at 667 MHz. They experience an abrupt fall from a previous price of $3 in early October. Most of the DRAM producers can't even cover their manufacturing costs if they sell DDR2 at $1.81 per Gigabyte. For instance, Inotera Memories reported an operational loss of $114.3 million for the fourth quarter of 2007, while Nanya reported much higher losses for the same period.
Although the companies are greatly disadvantaged by playing in a commodities market, the technology consumer is extremely advantaged. DRAM manufacturers are trying to rush new technology to the market in order to sell as much as possible before the market gets saturated. DDR3 memory is likely to arrive sooner and, at the same time, at an extremely affordable price.