DDR3 and the Rambus Tipping Point

An Amicus Brief was filed by three major OEMs this week in the ongoing legal activities between Rambus and the memory manufacturers.  What would concern these OEM about events that occurred almost 10 years ago?

Semico has neither the legal expertise nor the desire to comment on these ongoing cases.  However some aspects of the settlements could come to a conclusion by the end of this year.  We can comment on the potential impact on the memory supply and demand equilibrium.

Legal issues related to this long-running conflict have occasionally burst into flame and then died down in the intervening years.  Most importantly, no clear path to resolution has yet been suggested that would not place a considerable burden on some of the participating parties. One possible outcome is some level of restriction against unlicensed memory manufacturers shipping JEDEC-standard DDR memory products within the US.  Another is penalties against unlicensed memory manufacturers who had shipped JEDEC -standard SDRAM and DDR memory into the US in the past.

Semico believes that there is adequate DRAM material to support manufacturers throughout the balance of 2008.  However, it doesn’t really help the DRAM manufacturer or the OEM if that supply is waiting offshore but cannot be shipped to the US manufacturing location.  Nor is it useful to focus on the first memory manufacture to become the test case, since the conditions would eventually apply to all the manufacturers in turn.  With a supply chain so finely tuned to the supply and demand of the computing equipment manufacturers, any uncertainty in the supply side is unsettling to the OEM relying on just-in-time deliveries from inventory in close proximity.

“Regardless of the severity of the outcome, we believe that the majority of the disruption will fall on the price and availability of DDR3,” stated Bob Merritt, VP of Memory at Semico.  Any DRAM manufacturer, microprocessor manufacturer, or OEM who may be impacted by the crossover between DDR2 and DDR3 should order this report.

This study examines DRAM price elasticity, DDR3 schedules and the amazing ability of the DRAM market to turn around virtually instantaneously.

To purchase this study, or to receive a copy of the Table of Contents, including a list of exhibits, please contact Susan Cadel at 607-368-7600 or susanc@semico.com and reference VM104-08 or DDR3 and the Rambus Tipping Point.