December 8, 2003 5:45 AM PST

Micron puts new memory into action

Micron Technology revealed Monday that it has begun producing large numbers of DDR2 chips, a new generation of memory for computers.

The semiconductor manufacturer is now assembling DDR2 chips into memory modules, Micron executives said on Friday. It has been shipping those modules in sizes up to 4GB to chipmaker Intel and several PC makers, they added.

The DDR2 memory standard is a higher-performance, less-power-hungry successor to double data rate, synchronous dynamic RAM (DDR SDRAM), created by the JEDEC consortium. It can transfer more data per second than DDR, according to Micron, which promises better overall performance for computers with high-speed processors.

Micron's move, which follows Samsung's announcement that it began making DDR2 in March, is part of a PC industry shift toward using the new memory technology in desktops, notebooks and servers. The improved performance it offers is expected to appeal to both computer makers and consumers.

PC makers, which currently incorporate DDR memory in their products, are expected to begin the transition to DDR2 in the first half of 2004. Intel is expected to speed that switch by adding DDR2 technology to several new chipsets (bundles of chips that support its processors) over the course of the year.

By offering DDR2 modules now, Micron feels it's getting a jump on the market, said Mike Sadler, vice present of worldwide sales for the chipmaker, which is based in Nampa, Idaho.

"What we're doing is helping to enable higher performance and lower power consumption in all the computer platforms next year," he said.

The higher prices Micron and other memory makers will be able to charge for DDR2 products should give a boost to those companies' revenue and profits. During the recent PC market downturn, manufacturers had to cut prices steeply to remain competitive, though they were able to raise prices this summer, as inventories shrank and the market recovered.

"Our expectations are that on a per-megabit basis, the selling prices for DDR2 will be substantially higher--at least at the outset--than (the first version of) DDR," Sadler said.

Right now, a 512MB DDR module costs a PC maker between $70 and $75, Sadler said. If manufacturers charge 15 percent more for a DDR2 module with 512MB of memory--a typical premium--it would cost PC makers $10.50 to $11.25 more.

Because Intel is backing DDR2, the memory technology is expected to be rapidly adopted and widely offered by PC makers--even if it's only in their high-end computers at first. More backing is likely to come from chipmaker Advanced Micro Devices, which is expected to pick up on DDR2 next year, as are a number of brand-name memory manufacturers and chipset makers.

Intel's support for DDR dates back to 2001, when it moved to DDR memory for its desktops away from Rambus' RDRAM, after RDRAM adoption proved slow among consumers and businesses.

Rambus has designed a potential competitor for DDR2, dubbed XDR DRAM, which will appear next year, according to the company. However, XDR modules, which are expected from manufacturers Toshiba and Elpida in 2004, are more likely to be used in consumer electronics than in PCs.

 

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