Samsung Electronics is set to start volume producing 2Gb DDR3 chips using 36nm process technology in the fourth quarter of 2010, continuing efforts to shrink process geometries far ahead of fellow Japan- and US-based competitors. With mass production slated for later in the year, the node is expected to account for more than 50% of Samsung's total DRAM output in the third quarter of 2011.
The conversion to 36nm will achieve 30% cost reduction compared with 46nm, which is now Samsung's major DRAM process technology. After the process transition, Samsung's production cost for 2Gb DDR3 will be cut to US$1 on average.
Elpida Memory is transitioning directly to a 45nm node from 63nm, which is now its current mainstream process for DRAM memory. Meanwhile, Micron Technology is shifting to 42nm process technology from 50nm.
Industry sources have expressed concerns that Samsung's entry into 30nm-class production will allow the vendor to offer lower quotes than those offered by its competitors. In addition, as Taiwan-based DRAM makers ramp up production with technology support from Elpida and Micron, the possibility of a price war cannot be ruled out.
DRAM contract prices declined 13% sequentially in the third quarter. Pricing is expected to see another sequential drop of 20% in the fourth quarter, with prices for 1Gb DDR3 chips to fall to the level of US$1.50.