Intel Plans Flash Memory Price Hike - As Much As 40%

[Ed Hansberry]

<div class='os_post_top_link'><a href='http://news.com.com/2100-1001-975284.html?tag=fd_top' target='_blank'>http://news.com.com/2100-1001-97528...html?tag=fd_top</a><br /><br /></div>"Intel plans to raise prices for processors that contain flash memory technology by as much as 40 percent on Jan. 1 in response to increased demand. The Santa Clara, Calif.-based chipmaker said Monday that demand for processors with flash memory--used to store information in handhelds, cell phones and other devices--is rising as equipment makers add new features, such as digital cameras and color screens. Intel spokesman Tom Beerman said the company plans to raise prices on Jan. 1."<br /><br />Yuck. I am sure we will see some of this trickle down to the price of the Pocket PC. Then again, maybe this will spur some OEMs to give more serious consideration to ARM alternatives to the X-Scale, like the TI-OMAP used in the Jornada 928.

[PhatCohiba]

The article goes on to point out that we are talking about a chip (128mb) that cost $17 going to $24 or an increase of 7 bucks.

If this cost is passed on, which i think is unlikely, it would be a 20 buck change in the final price.

More likely will be a continued use of 64mb instead of 128mb :(

[JeZaD]

I thought prices normally go down when demand increases!

Very strange... but a novel way to increase revenue!

[Ed Hansberry]

I thought prices normally go down when demand increases!

Very strange... but a novel way to increase revenue!

http://ingrimayne.saintjoe.edu/econ/DemandSupply/OverviewSD.html

I feel a pro-capitalism post coming on. :wink:

[Foo Fighter]

I thought prices normally go down when demand increases!


No. This is economies of scale. Supply and demand dictate price.

IMO, however, this is a money grab by Intel to pad their margins. Just like HP did with the iPaq 39xx series. :roll:

[Ed Hansberry]

I thought prices normally go down when demand increases!


No. This is economies of scale. Supply and demand dictate price.

No, economies of scale are when costs are driven down by higher production volume and efficiencies. That is in a vacuum though. External supply/demand forces can enhance or negate the economies of scale.

Anyone want to dicuss why the Laffer Curve is correct? :wink: :lol:

[apeguero]

What would make the price go down rather then up is when these OEMs start using another processor made by someone else, like the ARM proc.
If you want an example of Supply and Demand, remember when the PS2
first came out? Did you notice the prices of it on e-Bay? I saw one as high as $1500.00 on an item that was selling at $299.00.

The problem with Intel here though is that I'm not seeing people lining up at CompUSA to buy the latest and greatest Pocket PCs...I just don't see the overwhelming demand on their supply. Judging by the lines at the CompUSA, Circuit City, and Best Buy stores that is.

They may be shooting themselves in the foot like they did a while back by overpricing their CPUs and then having someone like AMD undercut them and take market share.

[Ed Hansberry]

What would make the price go down rather then up is when these OEMs start using another processor made by someone else, like the ARM proc.

Right - but keep in mind ARM doesn't make processors, they design them then license it. Intel makes ARM processors - both the StrongARM (ARM V4) and X-Scale (ARM V5) are ARM. Then Texas Instruments does the OMAP (ARM V5) and Motorola has the new Dragonball MX-1, also ARM V5. There are others too, like Flextronics.

See http://www.arm.com/

Interestingly, AMD doesn't. They do some MIPS thing, so don't expect to see an AMD powered Pocket PC anytime soon.

[Foo Fighter]

No, economies of scale are when costs are driven down by higher production volume and efficiencies.

That's what I was getting at. He was confusing [high demand = low prices] with economies of scale.

But you're right. It is a vacuum. A vacuum that sucks in my hard earned money! :wink:

[JoshB]

Ed-

You do realize that the article is talking about Flash memory (the RAM and ROM of the Pocket PC), and you're talking about the CPUs (ARM and X-Scale), which are two completely seperate things, right?

JoshB

[Jonathan1]

Was this really unexpected??!?! I mean its Intel. The only time Intel has ever dropped its prices is when there is competition. So what is the deal?!? Can only Intel memory work with Intel CPU’s?!?! Aren't there any alternatives to Intel's flash ROM? Or are they playing more rambus type games again with their systems? :roll:

[Jimmy Dodd]

Ed-

You do realize that the article is talking about Flash memory (the RAM and ROM of the Pocket PC), and you're talking about the CPUs (ARM and X-Scale), which are two completely seperate things, right?

JoshB

Isn't the article about "processors with flash memory," not flash memory itself?

[Ed Hansberry]

Ed-

You do realize that the article is talking about Flash memory (the RAM and ROM of the Pocket PC), and you're talking about the CPUs (ARM and X-Scale), which are two completely seperate things, right?

JoshB

"Intel plans to raise prices for processors that contain flash memory technology by as much as 40 percent on Jan. 1"

[vincentsiaw]

what's the omap processor advantages over the intel xscale?

[JoshB]

Ed-

You do realize that the article is talking about Flash memory (the RAM and ROM of the Pocket PC), and you're talking about the CPUs (ARM and X-Scale), which are two completely seperate things, right?

JoshB

"Intel plans to raise prices for processors that contain flash memory technology by as much as 40 percent on Jan. 1"

It still doesn't sound like it's talking about the X-Scale/ARM processors. The Intel group that produces Flash is seperate from the group that produces X-Scale/ARM processors.

The entire article references flash memory in 'cell phones, MP3 players, and other devices.". Intel does a lot of business supplying the flash memory in cell phones. The memory does include a built-in processor to help manage it (like the "processors" built into CF and other removeable media).

Not trying to pick any nits, I just didn't read anything in the article that indicated price increases in the X-Scale/ARM processor arena.

JoshB

[Kirkaiya]

I think the article is pretty clearly referring to seperate FLASH RAM chips, not CPUs - this is another case of authors misusing the verbage (recall the Top Inventions article, where the author proclaimed that Scram-jet engines don't need any fuel-tanks.. lol).

The author just used the word, "Processor", where they meant to use the word, "chip".

While some processors may indeed have integrated flash-ram, that would not be a price controlled by Intel (except insofar as they can price their CPUs however they like).

The author specifically mentions, "chips" later in the article, and even mentions that AMD is the 2nd largest producer.

Also - if recent history is any judge, the costs WILL be passed onto consumers (about 1 1/2 years ago, or so, there was a similar spike in Flash memory prices.. i got gouged for a 48 MB CF card, which fell about 50% in price in the following year... ouch).

AMD, and Samsung also produce flash memory, so Intel might not be able to get away with the full price hikes, or not for long (I hope), but then again, they probably have a good idea of their competitors capacity. Off-topic: Is there anything Samsung *doesn't* make? TVs, Pocket PCs, monitors, flash-ram, cellphones, DVD players, desktop and laptop computers, MP3 players.... talk about a conglomerate.

[mookie123]

Off-topic: Is there anything Samsung *doesn't* make? TVs, Pocket PCs, monitors, flash-ram, cellphones, DVD players, desktop and laptop computers, MP3 players.... talk about a conglomerate.

If I am not mistaken Samsung is one of the biggest industrial Conglomerate in the world. 1.2B assets with sales about 1B or so.
http://www.samsung.com/about/financial/financial_overview.html

It's about the size of GE in term of sales ~1.3B. I will say Samsung has a bigger long term growth than GE since Asian economy specially china will grow much higher than GE's traditional US and european market.

[Ed Hansberry]

I think the article is pretty clearly referring to seperate FLASH RAM chips, not CPUs - this is another case of authors misusing the verbage (recall the Top Inventions article, where the author proclaimed that Scram-jet engines don't need any fuel-tanks.. lol).

The author just used the word, "Processor", where they meant to use the word, "chip".
If you look at the details of Intel's site and how they sell these chips, they are often integrated with the StrataFlash ROM memory, so while the chips and ROM do come off of separate assembly lines, it seems in many if not most cases, they are sold as a package deal - ie 400MHz w/48MB ROM package or 300MHz w/16MB ROM package, whatever. QUite different from how desktop chips are sold.

I think this article means the whole package is what will see the increase, though I hope the 40% is only on the ROM side of things. :?

Think about it - Intel's StrataFlash ROM. What good is it without a processor? And how many people need a processor for an embedded system without the ROM memory?

[Ed Hansberry]

Off-topic: Is there anything Samsung *doesn't* make? TVs, Pocket PCs, monitors, flash-ram, cellphones, DVD players, desktop and laptop computers, MP3 players.... talk about a conglomerate.

If I am not mistaken Samsung is one of the biggest industrial Conglomerate in the world. 1.2B assets with sales about 1B or so.
http://www.samsung.com/about/financial/financial_overview.html

It's about the size of GE in term of sales ~1.3B.
GE had sales of $129B last year. But you are right, Samsung is no slouch. THey had nearly $100B last year. They are even bigger than GE in their manufacturing side. About $58B of GE's revenue came from financial services - leasing, insurance, etc.

[sweetpete]

The article goes on to point out that we are talking about a chip (128mb) that cost $17 going to $24 or an increase of 7 bucks.

If this cost is passed on, which i think is unlikely, it would be a 20 buck change in the final price.

More likely will be a continued use of 64mb instead of 128mb :(

PhatCohiba - I don't think you read the article quite right ... nowhere does it say that the price of 128 megabits is going up from 17 to 24 ... it says that prices range from $7 - $17. Also 128 megabit does not equal 128 MB ... you need 8 * 128 megabit chips to have 128 MB. :wink:

[Kirkaiya]

Think about it - Intel's StrataFlash ROM. What good is it without a processor? And how many people need a processor for an embedded system without the ROM memory?


True, true.. but still, all that Flash RAM in CF and SD format (that we are all so very very fond of!!) is pretty much just the memory; there's no high-end CPU in a SD memory card (or Sony Memory Stick, MMC... what other incompatible formats am i missing here ;-) )

So I'm wondering if these price increases will mean up to a 40% rise in the cost of those cards - granted, the cost of the chips isn't 100% the cost of the cards, but even if it's half, then the cards could jump 20% in cost.

I think I'm buying a 128 MB SD card next week just in case (for my soon-to-arrive ViewSonic V35, which is now supposedly shipping on Nov 30th, and arriving Dec 4th... Amazon keeps changing my dates, but as long as they're moving them this way, i'm not complaining!!)

[Ed Hansberry]

Think about it - Intel's StrataFlash ROM. What good is it without a processor? And how many people need a processor for an embedded system without the ROM memory?


True, true.. but still, all that Flash RAM in CF and SD format (that we are all so very very fond of!!) is pretty much just the memory; there's no high-end CPU in a SD memory card (or Sony Memory Stick, MMC... what other incompatible formats am i missing here ;-) )

So I'm wondering if these price increases will mean up to a 40% rise in the cost of those cards - granted, the cost of the chips isn't 100% the cost of the cards, but even if it's half, then the cards could jump 20% in cost.

No, Intel doesn't control that market in the least. Flash ROM is different from Compact Flash and SD memory. THis is the Intel embedded processor line - X-Scale.