Memory makers reportedly tying NAND, DDR2 orders
DigiTimes has an interesting report on how DRAM manufacturers have allegedly found a new way to boost DDR2 shipments: they're requiring PC makers to buy it in order to purchase NAND flash. The two markets are in decidedly different conditions, with NAND production barely keeping up with demand and DDR2 adoption rates far below expectations. The gap between expected and actual DDR2 adoption rates has created its own set of problems. Gartner Dataquest anticipates DRAM revenue to drop from $26.3 billion in 2004 to $25.7 billion in 2005, and then to only $24.4 billion in 2006 (as reported by The Inquirer).
Samsung, Hynix, and Micron are the three companies reportedly bundling NAND and DDR2 shipments this way. While it may help cut their own DDR2 inventory levels (and boost profits) in the short term, it does nothing to resolve longer-term problems of overcapacity. PC manufacturers and traders have their own limited capacity to absorb additional memory inventory (particularly if that memory isn't selling very well), and no company likes having its purchases dictated to it by another. At the heart of the problem, of course, is a question I'm sure memory manufacturers have now been asking themselves for months: what's it going to take to boost DDR2 sales and acceptance?