SDRAM vs. RDRAM, Facts and Fantasy

As an aside, it has been rumored that RDRAMs are first tested when they are placed on RIMMs, and that low device yields mean that the entire RIMM must be thrown away if one bad device is found. This is not the case. RDRAMs are tested in much the same manner as SDRAMs, with functionality being verified before devices are assembled onto RIMMs. The high operating speed of RDRAMs, which exceeds the operating speeds of previous DRAMs, means that new high-speed testers are needed to test some functionality. While there is an investment for this new capital equipment (which must be recovered), it has the advantage of being able to test RDRAMs at full speed, meaning that test time per RDRAM is reduced and test throughput is increased.

Another misconception is that high RDRAM prices are due to the royalty charged by Rambus. Analysts estimate the royalty Rambus receives to be about 2% for each RDRAM sold. This is very small compared to price premiums seen in the retail channels today, and is thus not a major contributor to these premiums.

Even with all these considerations, the pricing information in the PC World article indicates that the price premium in the retail channels is not at all representative of the inherent manufacturing costs of RDRAM versus SDRAM. Furthermore, if RDRAMs were very expensive to produce, then platforms like the PlayStation2 would be at a severe disadvantage, as a large fraction of the cost of the PlayStation2 would be devoted to the two RDRAMs. This is unreasonable given all the other features packed into the PlayStation2.

So if manufacturing costs and royalties are not the culprit, why are RIMM price premiums high compared to DIMMs in the retail market? Certainly there are some development costs to recoup, but the belief that RDRAM technology is inherently much more expensive than SDRAM technology is overblown. The real explanation is simply that demand is exceeding supply. When prices are negotiated, the major OEMs get the best prices because they sell the most RIMMs. In the retail channel, only small quantities of already scarce RIMMs are allocated to retailers, resulting in prices that are higher than OEM prices. A good example of the sensitivity of the DRAM market to supply and demand is the sudden jump in SDRAM prices in the Fall of 1999. Shortly after a set of earthquakes in Taiwan, SDRAM prices began to jump sharply due to demand exceeding supply. Over a short period of time, SDRAM prices rose dramatically to levels more than double their earlier price. There was nothing inherent in the manufacturing process that suddenly caused manufacturing costs to increase sharply. Rather, the price increase was brought about simply by a reduction in supply.

So what is the supply situation with RIMMs? At the beginning of this year, Samsung and Toshiba were the only volume manufacturers of RDRAMs. Toshiba's were dedicated to the PlayStation2, and hence didn't impact the PC market. Since the beginning of the year, RDRAMs and RIMMs from NEC, Hyundai, and Infineon have become validated, and all three are beginning high-volume production. The entire process of producing a DRAM takes several months, so it is expected that by the third quarter of 2000 RDRAM supply will increase sharply. In addition, Toshiba has announced that they will increase production and begin selling into the PC market. Finally, Samsung has announced that they are increasing production to meet increased demand. It is expected that the increased supply will feed a growing demand from OEMs, and that some will find its way into the retail channels as well, which should help to drop prices in both channels.

Skip To Page 1 Introduction 2 Rambus Direct RDRAM 3 Conventional Memory Systems 4 RDRAM Benefits 5 Reducing System Cost 6 RDRAM Pricing • 7 RDRAM Pricing Continued 8 RDRAM Performance 9 RDRAM Performance Continued 10 System Performance 11 RDRAM Power Consumption 12 Benchmark Applications 13 BAPCo SYSmark 2000 14 Benchmark Setup 15 Benchmark Results Intel 440BX 16 Benchmark Results VIA 694X Apollo Pro 133A 17 Benchmark Results Intel i820 18 Benchmark Evaluation 19 Conclusion

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