Over lunch today I had a conversation with an alum of McKinsey Consulting who remarked that the DRAM business behaved in a way that was similar to the McKinsey Steel Model. For those unfamiliar with this model I found a slideshow HERE that refers to it a good deal. (So far I have not found a tutorial on the model itself, but if anyone knows were to find it The Memory Guy would highly appreciate hearing about it.)
One interesting thing is that this particular McKinsey alum was not the first to point this out to me. About 15 years ago a family friend/McKinsey alum told me exactly the same thing. It seems that the economics of the DRAM business have changed little over the past 15 years, and the McKinsey steel model applies to DRAMs just as well now as it did then.
In a nutshell, the model posits that the market price for Continue reading “Why DRAMs are Like Steel”
Today I saw an announcement from another market research firm about a new report with flash memory market shares for 2011. I found it remarkable that the way these chips are counted varies enough that the company decided to openly discuss this issue right in the press release for the report!
Memory market statistics are compiled by numerous firms: The World Semiconductor Trade Statistics (WSTS) sold in the US and Europe by the Semiconductor Industry Association (SIA), Gartner Dataquest, IHS iSuppli, Web Feet, Semico, Forward Insights, and even DRAMexchange. Lots of entities use conflicting definitions of what is and what is not a chip. This causes each company’s numbers to differ from the others’.
In the case of WSTS, a chip that is packaged with another chip into a board becomes Continue reading “Figuring Out Who Shipped What”
The annual International Solid State Circuits Conference (ISSCC) is a gathering in which the brightest minds in semiconductors come to meet and share the results of their recent research and development efforts. This year the four keynotes at the opening plenary centered on a “Green” outlook, through Storage, Control, Computing, and Energy.
Naturally, as “The Memory Guy,” I focused all of my attention upon the storage keynote, given by SanDisk’s recently-retired CEO Eli Harari. Some of the more interesting points I came away with were: Continue reading “Harari Delivers Inspiring Keynote at ISSCC”
2012 is likely to be a year in which the DRAM market consolidates a little bit more.
- At its peak in the late 1980s the DRAM market sported 23 suppliers.
- Today there are 6 suppliers of any note: Samsung, Hynix, Micron, Elpida, Nanya, and Powerchip
- The already-depressed market is only going to worsen in 2012. Capital spending in 2010 is seeing to that. Although many believe that prices cannot get any lower, that is exactly what they will do in 2012. Continue reading “DRAM Consolidation in 2012?”