d-ram

Powerchip, Taiwan’s biggest D-Ram company, said on Monday it was exiting the commodity PC D-Ram market in favour of making more specialised chips used in mobile computing devices such as tablets and smartphones.

Frank Huang, chairman, said his company would wind down its business of selling PC D-Ram chips under the Powerchip brand. Instead, Powership would become a contract manufacturer of PC D-Ram chips for long-time partner Elpida of Japan, the world’s third biggest D-Ram company. 

By Jane Rickards in Taipei

Samsung Electronics foresees an oversupply of dynamic random access memory (D-Ram) chips in the fourth quarter of this year or the first quarter of next year if the PC market continues to slow, marking the latest twist in a tortuous saga of gluts and shortages. 

How quickly the cycle turns. Barely a year ago D-Ram chipmakers couldn’t move fast enough to cut capacity as they struggled with oversupply during the industry’s most severe downturn. On Wednesday, the head of investor relations at Micron, the US memory chip company, confirmed what many analysts had been predicting: There is a shortage of Nand flash memory and D-Ram in the market.

This good news is tempered by the consideration that, over the history of the D-Ram industry’s existence, any shareholder gains made during the upturn have inevitably been destroyed in the next downturn. Many D-Ram makers, when presented with that fact, had last year vowed to be more disciplined should they make it out of the downturn, but can the tiger really change its stripes? 

This is probably as good as it gets for D-ram industry consolidation in Taiwan. ProMOS, which stood on the brink of bankruptcy for much of the past year, was assured of new business on Friday when it signed an agreement to provide manufacturing services to Japan’s Elpida. Elpida will also licence the technology needed to produce future generations of D-ram chips to ProMOS. 

Is there finally light at the end of the tunnel for embattled D-Ram memory chipmakers?  Research consultancy iSuppli seems to think so, and this week changed its near-term outlook rating for D-Ram suppliers to “positive” for the first time since last September.

In fact, D-Ram’s troubles had begun long before last September, with the market “stuck in a state of oversupply for nearly three years,” according to iSuppli chief analyst Nam Hyung Kim. 

  • US chipmaker Micron ruled out participating in the Taiwanese government’s restructuring plan for the beleaguered D-Ram memory chip industry. The move all but rules out further consolidation in an industry suffering from heavy overcapacity.
  • Search advertising in the US is predicted to fall this year, according to Screen Digest, the first time the industry has faced a serious contraction since it reached maturity. Google, which dominates the search advertising market and holds about 60 per cent market share in the US, has seen its growth slow from 31 per cent in the first quarter of 2008 to 13 percent in the fourth quarter.