New Math: DDR Chips Gain Market Share

DDR memory has been constrained because demand has been higher than expected, outpacing orders for SDRAM and Rambus, said Matt Wood, product manager at D&H Distributing.

The shortage has led several manufacturers to repurpose SDRAM production lines to make DDR memory instead, Wood said.

"SDRAM has been dominant for the past few years, but DDR [RAM has become mainstream now. As a result, the retooling of the manufacturing facilities is a little behind the times," he said.

DDR memory will soon pass SDRAM in sales at Kingston Technology, said Steve Rodriguez, director of strategic marketing at the Fountain Valley, Calif.-based manufacturer.

Rodriguez said SDRAM accounts for 60 percent of Kingston's sales now, DDR 30 percent and Rambus about 10 percent, but he anticipates that sales figures for SDRAM and DDR will be reversed by the end of next year, he said.

"I'm seeing DDR [memory move quite a bit in the past month," said John Samborski, CEO of Ace Computers, an Arlington Heights, Ill.-based white-box solution provider. "DDR and SDRAM were tracking similarly, then all of a sudden DDR started moving up. Parts almost doubled in price. It's eased in the past couple of weeks, but it's still up there."

Overall, shipments of memory are still soft, but they should rebound once older SDRAM inventories are exhausted and IT budgets loosen, Rodriguez said.

"The corporate market has not retooled or reinvested in two years. That's the majority of demand,new systems, not the upgrade market," he said. "Now, let's say by 2003 the corporate buyer has to retool to be competitive. We expect huge demand, and we will have enough supply."

The expected introduction of DDR II memory next year also will impact sales, he said.

Rambus production lines are also retooling for DDR memory because Rambus, now a player for high-end graphics-intensive systems, is growing at a slower pace than the other formats, Wood said.

"As far as new technologies, it seems like it's anybody's guess," he said. "Rambus is hanging in there. For Pentium 4 to perform to its maximum, it needs Rambus 1066. The problem is, you can't get it in the channel. It's new technology, and it takes a while to spool up to meet demand."

Ace Computers stopped focusing on Rambus because its customers were more interested in DDR technology, Samborski said.

"Rambus is dead as far as we're concerned for future development. Customers have not demanded Rambus for high-end products. They look to DDR memory. I only see it for some government contracts, where they're using cluster servers. Everyone else wants DDR RAM," Samborski said.

The price difference between the two technologies is a big factor, he said. For example, a 512-Mbyte DDR RAM chip costs about $110 today, compared with $280 for Rambus, he said.

"We pushed Pentium 4 as much as possible, but most RFPs [requests for proposal were for SDRAM because [customers didn't want to [make the transition," Samborski said. "In today's economy, customers are looking for evolution, not revolution. Rambus is revolution."

D&H is seeing much more interest in DDR 333 than in Rambus, and the company expects similar demand for the soon-to-be-released DDR 400 and the forthcoming DDR II, Wood said.

"An end user who's buying Rambus wants leading-edge, top-of-the-line fast speed. It's the only way to wake up the Pentium 4 processor," Wood said. "DDR is more popular because the price is in the mainstream. The performance is close to Rambus, and DDR can be used within AMD- and Intel-[based platforms."

"Every quarter you have to figure out your mix for the upcoming quarter. Transition has been flipped from synchronous [SDRAM to DDR, and that flip means DDR has been constrained," Rodriguez said. "The new boards and all the new systems from Dell [Computer and [Hewlett-Packard will be DDR. The market will drive that transition because [the vendors are consuming the bulk of the supply."