Wave Issue 2002 1/14/00 Article 1-05

***Fourth Quarter 99 DRAM Market/Embedded DRAM Emerging?
(January 12)

According to a Semico Research report, "Fourth Quarter 99 DRAM
Market: Embedded DRAM Emerging?" Semico announced that the DRAM
industry had revenue growth of 44 percent in 1999. For the year
2000, growth of 40 percent is projected. Embedded DRAM will have
even more growth.

A segmentation of the DRAM market is occurring, requiring many
different DRAM types and densities. Not all DRAM manufacturers
can afford mainstream DRAM fabs. This is bringing about a
consolidation in the DRAM market as vendors combine resources.
But, new opportunities are emerging. Semico's forecast for unit
growth for the nascent embedded DRAM market is 78.7 percent. Some
DRAM applications require higher performance, lower power, or
smaller or non-standard densities. Mainstream PC memory DRAMs
cannot satisfy these requirements, but embedded DRAM often can.

Not only are there various types of DRAMs in these markets, the
DRAMs are also integrated into logic chips having the potential
for achieving added value by incorporating intellectual property.

Semico is confident in the future growth of embedded memory
because the potential for added value is attracting support from
DRAM manufacturers. One of the reasons for the price decline of
mainstream DRAM during periods of over-capacity is the lack of
meaningful product differentiation. Considering the enormous
amount of manufacturing capacity required to reach the level of
efficiency required to produce mainstream DRAM profitably, it is
just not practical to establish product differentiation.

Embedded DRAM offers an opportunity to establish product
differentiation, and thus to obtain higher profit margins. An
ideal, if somewhat paradoxical, situation would exist if the same
efficient, high-volume fab required for commodity mainstream DRAM
products could also fabricate custom chips combining DRAM and
logic. This could become a new dimension in semiconductor
manufacturing. High volume manufacturers would love to reap the
benefits of synergies that would result.

"Fourth Quarter 99 DRAM Market: Embedded DRAM Emerging?" offers
forecasts for mainstream DRAM products as well as forecasts for
the embedded DRAM market. The list price is $3,500.

www.semico.com