Two issues potentially might negatively impact second-half DRAM availability and push what is left of the year into undersupply, according to the latest data. Bottlenecks in the availability of tooling equipment on the one hand, and challenges relating to immersion yield on the other, could affect supplies.
In the first instance, overall production remains a problem given the inability of ASML to supply enough equipment. While ASML appears capable this year of delivering an additional 33 immersion scanners, it will not be enough to resolve the bottleneck.
A second - and potentially more serious - difficulty that could impact DRAM supply relates to yield challenges beyond 50nm. The industry's biggest players including Samsung Electronics, Hynix Semiconductor and Micron Technology have successfully made the shift to smaller lithographies in light of their enormous resources and experience producing NAND flash memory, which is ahead of DRAM lithographically. However, for resource-constrained companies or those currently negotiating the transition, difficulties accompanying such a move might reduce their total output, negatively impacting the industry's overall bit growth in the process.
One example of a company in the midst of transitioning is Elpida Memory. For the second quarter, Elpida was expected to move from 6xnm processes to 45nm - a considerable lithographic jump that presents confounding yield problems. Should Elpida, along with its technology partner Rexchip Electronics run into any unforeseen yield issues, bit production from both companies could be significantly disrupted.
In turn, such dislocation could have far-reaching repercussions, impacting global bit growth for the rest of the year. As a result, overall bit growth projected for 2010 could come in from two to four percentage points lower than expected, slashing the projected annual growth rate from 49% to as low as 45%.
In the end, the loss in bit growth might mean an upward movement in prices. And in such a scenario, the real winners would be the companies that already have leapfrogged the immersion hurdle.