Rambus sidelined as DDR deluge begins

Time has run out for Rambus.

Motherboards based on Intel's long-awaited 845-D chip set, which provides DDR SDRAM (double data rate synchronous dynamic RAM) support for the Pentium 4 processor, finally started hitting the retail market on Friday. The initial trickle of 845-D motherboards to appear in the coming days will soon become a flood, turning memory technology developer Rambus into a marginal player in the PC component market.

DDR memory has long been expected to replace RDRAM (Rambus dynamic RAM) as the memory type most commonly found in Pentium 4-based PCs. Both memory types are comparable in performance, but RDRAM is nearly 40 percent more expensive than DDR memory. A 128M-byte stick of DDR RAM, for example, costs about US$24.50 while a 128M-byte stick of RDRAM costs around $34, according to spot memory prices tracked by market watcher ICIS-LOR.

Signalling that the switch from RDRAM to DDR RAM has finally arrived, shipments of Pentium 4 motherboards based on the 845-D will this month for the first time outnumber shipments of motherboards which use RDRAM, according to the world's largest producer of PC motherboards.

Taipei-based Asustek Computer Inc. expects its December shipments of Pentium 4 motherboards based on Intel's 845-D chip set, which supports DDR memory, to outnumber shipments of motherboards based on Intel's 850 chip set, which supports RDRAM, according to Jonathan Tsang, the company's vice president of sales and marketing.

Until now, Intel has only offered one alternative to the 850 chip set for Pentium 4-based PCs, the 845 chip set, which supports cheaper and slower SDRAM. With the arrival of 845-D-based motherboards, Tsang said he expects to see a steep drop in shipments of 845-based motherboards supporting SDRAM.

In Tokyo's Akihabara district, an area packed with little shops selling individual processors, memory chips and other computer parts, the first motherboards based on Intel's 845-D chip set went on sale on Friday afternoon.

PC parts vendor Kosoku Denki received a shipment of 845Ultra-AR motherboards from Micro Star International Co. Ltd. on Friday and promptly put them on sale at 20,800 yen ($167). Another leading vendor, Tsukamo Co. Ltd., said it expects to receive its first shipment of 845-D-equipped VC15 motherboards from First International Computer Inc. as early as Friday. The company said the board will cost around 19,499 yen.

The prices are around 5,000 yen more expensive than comparable 845 SDRAM motherboards from the same makers, although prices are expected to fall quickly as supply increases and more shops receive boards.

Despite the flood of 845-D-based motherboards working their way into the market, the 850 chip set and RDRAM remains in use with motherboards designed for high-end Pentium 4 systems, Tsang said. But even that could change, as Intel predicts use of DDR memory in Pentium 4-based PCs will surge next year.

"Rambus, I think, is going to get niched into the very performance-intensive applications, largely workstations. And over time, unless the economies of scale change at Rambus, I think DDR will be the winner even in that arena," Anand Chandrasekher, vice president of the Intel Architecture Group, said last month.

That trend bodes ill for the San Jose, California-based memory technology developer behind RDRAM. "Rambus is dead. It's gone," said Dan Heyler, head of Asia-Pacific semiconductor research at Merrill Lynch Asia-Pacific Ltd.

Shipments of the 845-D will also have an impact on Intel rival Advanced Micro Devices Inc. and chip-set maker Via Technologies Inc.

AMD could see Pentium 4 sales eat into the market share of its Athlon processor due to the cost savings associated with using DDR memory instead of RDRAM. "In the near-term that's the case. We'll see if AMD can respond," Heyler said.

For its part, Via -- which makes around 40 percent of all PC chip sets -- faces the prospect of becoming a smaller player in some parts of the PC market as shipments of motherboards based on the 845-D head to market. The company's P4X266 chip set was the first product to offer DDR memory support for the Pentium 4 but a legal battle with Intel over patents has scared away most of the largest motherboard makers, including Asustek.

"Because of the patent issue, of course we will not (sell motherboards based on the P4X266)," Asustek's Tsang said, referring to Intel's allegations that the P4X266 chip set infringes on several of its microprocessor-related patents, a charge that Via has denied.

But there is one bright spot for Via. Even as the largest motherboard makers shy away from the P4X266, the company's DDR chip sets have been gaining share in the market for white box, or non-branded, PCs, Heyler said.

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