Memory glut distorts the market

THE AUGUST ISSUE of Future Horizon's Semiconductor Monthly Update report has some interesting stuff on excess capacity of memory.

Principal analyst Malcolm Penn said that much of the excess capacity in flash and DRAM is because the memory firms have so much 300mm wafer conversion. That, he points out, causes "short to medium term industry distortions", mostly because of the structural impact of the die output per wafer start.

The report includes an interesting table showing the 200mm (eight inch) versus 300mm (12 inch) die cost comparison.

Die Size	59 square mm	59 square mm
Wafer Size	200mm	300mm
Raw Wafer Cost	$60	$180
Gross DPW	437	1,069
Defect Density	0.20	0.25
Probe Yield	88%	86%
Good DPW	385	919
Processed Wafer Cost	$1,290	$2,270
Die Cost	$3.35	$2.47

Penn said: "This extra output has to be sold, putting even more price pressure on an already price sensitive market." While eventually the capacity will get absorbed, this inevitably causes distortions.

The memory market situation is distorted, said Penn, because up to 60 per cent of production ships during the second half of the year, and memory fabs "must always be run flat out at full capacity". But, he continued, memories are "the most price elastic" of all ICs, "so everything produced will always get sold". But the problem is the price it commands. µ

L'INQ
Future Horizons