It’s not a civil war, exactly, but a standards battle over the next generation of computer memory has Orange County hardware makers taking sides, and the outcome could affect millions of dollars in recent technology investments.
At center is a proprietary memory technology developed by Mountain View-based Rambus Inc. that promises far higher performance than SDRAM (synchronous dynamic random access memory), which is standard now. Rambus has licensed the technology to several memory makers, though IBM and Fountain Valley-based Kingston Technology Co. Inc. appear to be the only major firms manufacturing it.
Intel Corp. stunned the PC industry last year when it unilaterally threw its weight behind Rambus, announcing that its newest chips and related components would use the technology exclusively. That clout, manufacturers assumed, would ensure Rambus dominance on the next generation of PC products.
Kingston has spent $30 million to $40 million upgrading its equipment to manufacture the Rambus chips, and most Orange County companies in the memory arena say they’re also working on chips that use the technology.
But many area memory makers,even those that publicly support Rambus,aren’t ready to embrace it wholeheartedly, which would require significant purchases of new manufacturing and testing equipment. For those that have begun Rambus production, the difference is showing up in price: a 64 megabyte module of Rambus memory costs anywhere from $410 to $544, while the same-sized module of SDRAM costs about $150.
To make matters worse, the JEDEC Solid State Technology Association,a de facto standards-setting body for the industry,is endorsing a competing technology called DDR (double data rate SDRAM), which promises a performance similar to first-generation Rambus chips without Rambus’ licensing fees and manufacturing investment.
“The only real (Rambus) adopter has been Intel,” says Todd Rovazzini, marketing director for Irvine memory packager Silicon Tech, which makes Rambus-based memory along with DDR and traditional SDRAM. “We’re not anti-Rambus, and if we got an order today, we’d be happy to fill it. But from what we’re hearing, they’d just sit on the shelf.”
Few argue that computer memory will need to become faster to keep up with speedier microprocessors and other components, or that Rambus technology offers a substantial performance gain.
But a growing contingent of memory makers contends Rambus requires too much investment from manufacturers, especially when compared with the similarly fast DDR. Detractors also say Rambus-based chips consume too much power and suffer a bigger production yield loss because their complexity results in more rejects in the manufacturing process.
“Traditionally, the industry has worked on the concept of evolution, where you never lose sight of your sunk costs,” says Desi Rhoden president and chief executive of Advanced Memory International Inc., a consortium of 20 memory and related technology manufacturers. “We’ve always gotten where we need to go using tiny baby steps.”
He cited two recent developments as evidence for Rambus’ imminent failure: Intel recently announced it would not be using Rambus technology for its laptop chips, and Rambus officials say they want to expand beyond the memory market. The nail in the coffin? Rambus will not participate in the Intel-led effort to develop memory standards for the PC market in 2003 and later.
Not everyone, however, is writing Rambus’ eulogy just yet.
John Shu, product development manager for Irvine memory maker Kingmax Technology Inc., said his company is hedging its bets by supporting both Rambus and DDR. But he added that many companies investing heavily in a Rambus-centered future might find little return.
“We’re ready on the Rambus side just in case they work out all the problems and Intel is serious about backing it,” he says. “But we’re also working on DDR and, like many memory makers, we’re stepping back to wait and see.”
He added that many of the Rambus equipment upgrades will pay off in the long run, even if the technology failed to take the market by storm, but some of the most enthusiastic adopters will take a short-term hit.
“If your machine is sitting there doing nothing, there’s a depreciation right there,” he said.
Kingston, one of Orange County’s best-known memory makers, is buffering its investments by also working on DDR technology, even as it becomes one of Rambus’ most visible supporters.
Vice president for business development Wai Szeto acknowledges Rambus’ immediate shortcomings, but says he’s confident it will become a PC standard.
“Any time you push a new technology or establish a new standard, it takes a lot of effort,” he says, comparing the Rambus changeover to the transition from old EDO memory to SDRAM. “Rambus isn’t actually that difficult,it’s just that no one wants to pay the licensing, and many of them don’t have much money to invest (in new equipment).”
With most of the top-tier computer makers beginning to ship computers with the Rambus-compatible chips and motherboards, it’s only a matter of time before Rambus becomes standard, he says. And Rambus’ high costs will dissipate as manufacturers begin shipping in volume.
If DDR takes hold this year, Szeto added, it would be primarily among specialized component makers such as graphics-card companies, which haven’t yet coalesced around a single memory standard.
Several memory makers acknowledged that Kingston would be among the first to benefit if Rambus becomes the standard. But if Rambus fails, Kingston could be one of the biggest losers.
Szeto isn’t worried.
“We always tend to jump in much quicker, because that gives us a significant technical advantage,” he says. “But with DDR and Rambus, we’ll make money either way.” n
