Samsung will corner GDDR5 market

SOMETIMES READING about a recovery isn't necessarily a good thing, at least not for consumers. This couldn't be more true of RAM.

The first big DRAMurai casualty, Qimonda, is having a positive effect on lagging memory prices and has raised the spirits on the cash-strapped DRAMurai as the "evil oversupply monster" flinched this week.

The whole situation has been building up over the past couple of years in the DRAM industry and Qimonda is just the tip of the iceberg. But the company's Chapter 11 crusade has spawned a positive side-effect: just after the Chinese New Year, DDR2 (still the bulk of DRAM production) pricing jumped about 25 per cent, according to the DRAM Exchange. This was quickly followed by other memory types that acted like they'd just had a shot of Vodka and Red Bull.

Although this means good news for DRAM makers overall, it still isn't enough to get everyone in the black - not even close. With a year of consolidation and mergers ahead, there is one player in particular that looks stuck in a rut: Hynix.

Apart from its operating and financial woes, Hynix has just had its head handed to it by a district court in the US of A. It's been denied a request for a stay on judgement based on Micron's little victory over Rambus just a few weeks ago. Now Hynix is hanging by a thread and waiting (literally) for a telephone call from Rambus with a list of demands. In a worst case scenario, Hynix will go bust.

While smaller DRAMurai are running around establishing partnerships among themselves - as Sylvie reported earlier - bigger players stand to make a killing on this situation. Enter Samsung. The great chaebol could be the only stable supply of GDDR5 on the market in a couple of quarters. With Qimonda and Hynix out of the picture, Sammy will pwn GDDR5, the base for most - if not all - next-gen graphics cards. Even as we speak, DAAMIT is already chock-full of the stuff in their HD 4870 and X2 models, while Nvidia is mulling introducing next quarter.

We asked ATI and Nvidia their thoughts on the matter:

DAAMIT says it currently feeds from all three GDDR5 suppliers, although we've only seen Qimonda kit soldered to their babies. "We have two other suppliers for GDDR5 memory and they are Hynix and Samsung. Today they do supply us with devices and they are qualified on our SKUs. There is no concern from AMD on supply of GDDR5 going forward and we only expect things to improve as GDDR5 penetrates more markets." Said Cap'n Hook at DAAMIT HQ. No worries there then. Nvidia's spokesbunny was a bit more coy about the technology "Qimonda's announcement has no impact on NVIDIA's business. We work with multiple memory suppliers to ensure that we have sufficient supply for all our GPU needs."

Problem is, if things continue as they are, Samsung will be the only GDDR5 supplier by the second half of 2009.

Ker-ching. µ