=DJ Asia DRAM Report: DDR-400 Usurps DDR-II As Next Standard
By Dan Nystedt Of DOW JONES NEWSWIRES
TAIPEI (Dow Jones)--Intel Corp. (INTC) is playing kingmaker in the contest to determine which memory chip will dominate the market throughout next year, and the chip giant's backing of an incrementally faster version of existing memory is likely to delay the coronation of next-generation DDR-II chips.
Previously thought to be a mere stopgap until DDR-II enters the market in 2004, DDR-400 is itself now seen as a contender for the title of "industry standard."
Industry sources say DDR-400, double data rate memory chips that run at 400 megahertz, appeared on Intel's product development roadmap early last month. That means Intel will begin designing hardware to allow its popular Pentium 4 microprocessors to work with DDR-400 - something the chip giant hadn't intended to do.
Intel, however, wouldn't confirm nor deny whether DDR-400 is in its product strategy.
According to motherboard and chipset makers in Taiwan, Intel's decision was due to its desire to pair its Pentium 4 with faster memory and concern about the heat problems that afflict faster memory chips, including DDR-II.
Since Intel processors power around 80% of all personal computers on the market, an Intel stamp of approval means instant recognition from the rest of the computer industry.
Companies already adept at producing DDR chips running at 266 MHz and 333 MHz, like Samsung Electronics Co. (Q.SSE) and Taiwanese producers Nanya Technology Corp. (Q.NYT) and Winbond Electronics Corp. (Q.WBE), should be the first to gain from Intel's decision.
By ramping up production of the faster DDR chips ahead of their competitors, these companies will be able to catch the top prices for the chips while supply remains tight.
That's exactly what Samsung, the world's largest memory maker, is already doing. The South Korean chipmaker said it will ramp production of DDR-400 early next year, reaching heavy volumes by the second quarter.
"We expect DDR-400 to account for 30% of production by the end of 2003," said Jon Kang, senior vice president of product planning and application engineering at Samsung. "We've been actively working on it for the high-end desktop space." Codename: Springdale
According to companies in Asia, Intel plans to launch a chipset, code-named "Springdale," by the second quarter next year to connect its Pentium 4 processors with DDR-400 memory.
Computer gamers and others that use graphics intensive or memory-hungry programs - around 5% to 10% of the PC market - will likely be the first to buy PCs with DDR-400 memory. DDR chips are typically used in PC video memory - the circuitry that stores the complex images displayed on the computer screen.
Originally, companies believed DDR-400 would be a short-lived phenomenon, a bridge between slower DDR-333 chips, which are quickly becoming the main PC memory, and DDR-II, which uses a different, and more complex, architecture that is far from market-ready.
Computer parts makers have also reinvigorated efforts to develop motherboards, chipsets and other products necessary to connect DDR-400 to Pentium 4 chips.
"With Intel acknowledging DDR-400, that means the company needs them, or sees something ahead in memory chips that the rest of us don't," said one module maker.
Analysts say Intel needs DDR-400 to keep up with the ever increasing speeds of its Pentium 4 central processors.
Unfortunately, producing the fast new chips is technically challenging.
"There are heat problems with (faster forms) of DDR," said Crystal Lee, head of strategic marketing at DRAMeXchange, an online clearinghouse for memory chips.
Computer parts engineers in Taiwan say even DDR-333 chips have some problems with heat, and that speeds over 400 MHz could be too hot for use in current desktops.
Chipmakers have only recently found a way to beat the heat in DDR-400.
Samsung's Kang said his company has been able to reduce the heat generated by DDR-400 by producing the chips with 0.13 micron process technology. With circuits of just 0.13 micron in width - narrower than the current industry standard of 0.15 micron - electrical resistance is reduced, thus reducing the amount of heat generated.
Overheating memory chips can cause computers to crash. PC makers thoroughly test such parts before using them inside their products.
The fact companies like Samsung have found solutions to the heat troubles of DDR-400 may be the main reason the chip won Intel's backing.
Chris Hsieh, senior technology analyst at ING Financial Markets in Taipei, said the heat issues with DDR-II are severe enough to possibly delay the chip's market entry. Nobody is guessing by how long, but engineers at computer parts makers in Taiwan are shifting efforts to DDR-400 to ensure their parts work with the chips as soon as possible, and for as long as possible.
Right now, the industry group charged with developing DDR, the JEDEC Solid State Technology Association, is preoccupied with setting a new standard for DDR-400 so the chip can gain industry acceptance more quickly.
Currently, computer parts makers have to test each brand of DDR-400 chip individually to ensure it works with other computer parts - a time-consuming process. An industry standard will put everyone on the same page, and production of all the parts necessary to make a computer work with DDR-400 will move ahead.
