MEMORYWATCH OUTFIT DRAM Exchange says that developing DDR3 remains the key factor to winning the next memory war.

In a report, the firm said that 2007 and 2008 will be considered the worst for memory makers on record.

Over-expansion by the DRAM makers resulted in an over-supplied market where DDR2 die price fell sharply.

With the expectation of lower PC sales in Q4, DRAM inventory is expected to continue its climb and the DRAM price is expected to break new lows.

DDR2 1Gb eTT spot price is now at $1.15 USD and DDR2 667 1Gb is down to $1.19 USD.

DDR2 price is already below its variable cost, for DRAM makers, the report said.

Looking to the future DRAM Exchange said that the only DDR3 manufacturers which continue to be the primary DRAM makers are Samsung, Hynix, and Elpida.

Of the Taiwanese DRAM makers, only Nanya has begun manufacturing DDR3 dies. Samsung and Elpida are the most aggressive in increasing DDR3 production. DRAM Exchange estimates Samsung and Elpida will have nearly one per cent of their production capacity focused on DDR3 production.

DDR3 dies will begin to be produced with 70nm, 65nms or even 56nm process beginning the second half of this year and will officially begin mass production in these advance process sometime in 2009.

The report also said that it is possible for DDR3 to reach a large enough production to begin a generation shift from DDR2 to DDR3.

It predicts that DDR3 dies will make up roughly four per cent of total DRAM die produced by the end of this year.

While this is not that much, DRAM makers have been very persuasive in convincing PC OEM makers to adopt DDR3. They will come at lower prices for a start.

Already Dell, Sony, Lenovo, Toshiba, and Acer have had DDR3 offerings and it is expected that more PC OEM makers will launch products containing DDR3 by end of this year becoming 20 to 30 per cent of the PC market. µ