Quote from: FrankB on April 17, 2010, 12:53:42 PMHi Piggy, I truly believe that you truly believe what you are saying. No doubt about that.
There was this one story that crossed the wires a few years back, about a factory that was destroyed by a fire,
Ah !
I know which one.
That factory in Japan which made the ceramic that is used to seal the chips.
Indeed those experts were alarmed and told the world how disastrous it was for the chip industry world wide. But then those so-called "experts" are not "experts", they are "columnists", meaning, they earn money not by being in-the-field but by WRITING STUFFS about the industry.
Those so-called "experts" didn't know, back then, that there were more than enough inventory in the channels to last 2 years.
But this time, my dear friend, it's different.
Quote from: FrankB on April 17, 2010, 12:53:42 PMAs an outsider, I would think, like with that fire a few years back: if there's ever increasing demand, sombody will arise to meet this demand,
I am not disputing what you said as it's true.
However, in this case, we need to deal with the timeline problem.
Building a fab takes years.
And the last price fall cycle for DRAM had bankrupted 40% of the DRAM manufacturers.
2 manufacturers in Europe completely closed shop, with their fabs and their equipments sold to buyers in China, Taiwan and elsewhere. And those equipments are being used to produce SOLAR PANELS, not DRAM.
2 more DRAM manufacturers in Taiwan also faced bankrupcy. One has opted out of commodity DRAM market and is concentrating on specialized memory products, and the other one has sold 80% of its equipments to other manufacturers.
Which means, there are only 60% of the original capacity remaining to make DRAM.
But this gets worse.
As 3 DRAM manufacturers in Taiwan, the ones that survive intact, have opted to shift some of their manufacturing lines to make NOR Flash chips instead.
NOR Flash chips price is skyrocketting, much more than DRAM. The spot price for NOR Flash chips have soared over 400% since last December, and is still going up and up and up, thanks to the demand from the Mobile Phone market, the IPad market, the SSD market, and so on.
Taking into account what is happening, only 48% of previous capacity is actually devoted into making DRAM today.
Why no expansion?
Well ... two fold.
1. No new DRAM fabs are being build.
2. The Immersion Technology equipments are in very very short supply.
As the lithography of chips goes down beyond 50nm, they need to use very very deep ultraviolet light to do the lithography.
And to make that work, they need to do it all immersed under water.
And to do that, you need new equipments, the immersion technology equipments and those are in very very short supply.
Which means, even if in existing fabs they have the space for the new equipments, they still can't do anything right now because there is not enough new immersion technology equipment for them to make the new chips.
All that mean one thing - all the 2nd tier DRAM manufacturers have to make do with old 63nm technology to produce DRAM and it's costing them a lot.
Unless of course someone got BILLIONS and BILLIONS to spend that they can buy up GlobalFoundries from the Middle Eastern fellas and turn all the capacity into producing DRAM instead.
But sadly that's not happening.
The earliest increase production for DRAM that I can foresee is in 2nd quarter, 2011.