June 5, 2001

Mosel-Vitelic Inc. and Nanya Technology Corp., two major Taiwan semiconductor companies specializing in memory chips, both feature 256 Mb double data rate (DDR) dynamic random access memory (DRAM) chips at the show.

Both companies already seperately presented 128 Mb DDR DRAMs earlier this year. and jointly marketed DDR chips, with Nanya supplying DDR DRAMs matched with VIA's DDR core logic chipsets.

At Computex, expert visitors said that DDR DRAMs outshine the Intel-backed Rambus DRAM due to strong support from VIA Technologies Inc. and TwinMos Tech Inc., two of Taiwan's leading chipset suppliers and DDR advocates.

An executive of Nanya said that his company was the first in Taiwan to turn out DDR meomories on a trial basis and is now mass manufacturing the chips. Nanya also won test approval from DDR core logic chipset suplliers including Advanced Micro Devices (ADM) of the US and Via Technologies and Acer Laboraties Inc. of Taiwan. The executive also reported that his company confirmed orders from several major international manufacturers of memory modules and chips in March. He estimated his production be 10 million a month. In April this year, Nanya sold 2.3 million DDR DRAM chipsets and landed further large orders form them at CeBIT, Hannover.

Nonetheless, the market still needs to fight the intertia caused by huge global chip inventoriesm estimated to be in the tens of millions of units. The stockpile has worsened since Intel recently cut the price of its Pentium 4 microprocessors, stimulating demand for motherboards equipped with RDRAM chips. The prices of 128 Mb DDR DRAMs have dropped below US$ 5 f.o.b.

With strong support from Intel, world deliveries ofRDRAM motherboards have begu ramping up since the start of the current quarter, exceeding deliveries of DDR motherboards by 4%. Industry insiders predict DDR demand to soar considerably in the second half of this year.

Consequently, a major focus of the ongoing Computext is the ongoing competition between DDR and RDRAM memories, as RDRAM prices remain high, while weak demand of both DDR abd SDR (single date rate ) DRAM has caused prices to slide dramatically.

Although many of Taiwan's memory makers have licensed RDRAM technology from Rambus, some say their hearts are really not in it, asRambus not only makes its own memory mdoules but also poses a threat to the Taiwan companies in other areas of IC manufacturing.