Kingston co-founder: DRAM makers have no way out
Josephine Lien, Taipei; Esther Lam, DIGITIMES [Tuesday 3 June 2008]
 David Sun of Kingston Technology
Photo: Josephine Lien, Digitimes, June 2008
David Sun, co-founder of the number-one DRAM module company Kingston Technology, believes that no DRAM maker will voluntarily quit the market as they have no backdoor to exit. Even if more consolidation is seen in the industry, overall capacity will not reduce.
Sun commented that the recent trough in the DRAM industry is very different than the one seen in 2000. Companies such as Fujitsu, IBM, Mitsubishi Electric, OKI, Texas Instruments (TI) and Toshiba quit the DRAM market due to severe competition and shifted their focus to other products. Toshiba, for example, shifted its focus from DRAM to NAND flash and the company has a proven achievement in the NAND flash industry now, stated Sun.
The situation is different now. No DRAM maker will quit the market on their own as they are have no "backdoor" to exit, Sun stated. These players are forced to stay in the DRAM business. Taking Micron Technology as an example, Sun said the company is still having its core operation based on DRAM, despite its extended presence in CMOS image sensor and NAND flash production.
Reviewing major DRAM makers such as Elpida Memory, Nanya Technology, ProMOS Technologies, Powerchip Semiconductor Corporation (PSC) and Winbond Electronics, Sun said all of these players have no other product line to shift to if they quit DRAM production.
Even if a price plummet spurs consolidation, Sun said global DRAM capacity is not going to decline. The only solution to return the industry to discipline is a rational expansion that will eventually reduce fresh capacity, he added.
Speaking on behalf of a memory module company, Sun said Kingston thinks visibility in the DRAM industry is relatively clearer than that for NAND flash. Since the price of DDR2 is unlikely to drop below US$0.80 again, procuring in this price range and selling it when the price appreciates will still guarantee profit for the company.
Source: DigiTimesLabels: CMOS, DRAM, Fujitsu, IBM, Kingston, Mitsubishi Electric, NAND, OKI, Texas Instruments, TI |
David Sun of Kingston Technology
