Samsung: DDR2 production to surpass DDR1 in Q3

Chicago (IL) - Samsung, the world's largest DRAM manufacturer, will shift its DRAM production process dramatically towards DDR2 memory this year, setting the path for accelerated adoption and lower prices for the successor of DDR1.

If you aren't using DDR2 memory despite its broad availability, you haven't missed anything. Despite support of the technology through Intel's PCI Express chipsets, manufacturers so far have been in a wait-and-see position, choosing the cheaper DDR1 memory for most of their systems. This is about to change, says Samsung.

Samsung builds about 29 percent of all DRAM modules sold worldwide, determining the direction of the industry with a comfortable margin. According to market research firm iSuppli, Hynix follow Samsung with a 16.4 percent share, Micron is third with 16.1 percent.

Jim Elliot, associate director of Samsung's DRAM business said that DDR1 memory still outpaces DDR2 in bit production units at this time. "During first quarter about 43 percent of our manufacturing will be DDR1, 30 percent will be DDR2." By the third quarter, DDR2 however will surpass DDR1 with a 39 to 35 percent share. For the complete year 2005, Elliott expects DRAM output at about 40 percent each for DDR1 and DDR2. SDRAM will still hit 10 percent with the remaining 10 percent of capacity dedicated to Rambus DRAM and graphics memory.

While Elliott wouldn't comment on a specific time when DDR2 may hit the price point of DDR1, he said that "DDR2 will set the benchmark price" for DRAM memory by mid of this year.

Other industry sources expect DDR2 533 memory to be available for today's prices of DDR 400, once DDR2 667 will become widely available later this year. According to pricewatch.com, DDR2 currently commands roughly a 200 percent price premium over DDR1. 512 MByte DDR PC-2700 modules sell for about $50 while DDR2 PC2-5400 units run for $134. A similar price difference is shown for 1 GByte modules ($83 and $279).

Elliott believes that notebooks currently offer the "best value proposition" for DDR2, memory, since Intel's Alviso chipset would not only provide PCI Express functionality, but also more performance (DDR2-533) and less power usage. As a result, "more than 90 percent of notebook manufacturers use the faster memory" instead of DDR1 in their products, Elliott said.

Recent tests in Tom's Hardware Guide labs however revealed that the power advantage of DDR2 compared to DDR1 by scaling supply voltage from 2.5 volts to 1.8 volts can be eaten up by the PCI Express interface. The speed advantage offered by dual-channel DDR2-533 memory is a maximum of five percent compared to single-channel mode, according to our benchmark results.

Elliott believes that DDR2 will also offer a "compelling" solution for the desktop this year with Intel's 1066 MHz FSB becoming more present in the mainstream segment. The technology offers significant headroom and therefore offers "future-proofing" for the corporate market, he said. The next memory generation however has appeared on the horizon: DDR2 is likely to top out at 800 MHz, which is expected to be commercially available late 2005 or early 2006. "DDR1-400 provided a bridge to DDR2-400. DDR2-800 could provide a similar bridge to DDR3-800," Elliott said.

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