Although mainstream PC makers have yet to embrace DDR3 DRAMs, and DRAM makers all have rather broad initial DDR3 DRAM and DIMM portfolios, there is still a lot of smaller volume interest from users who find both unparalleled performance and lower power than they can get from DDR2s. The fact that DDR3 is more costly than DDR2 DRAMs, usually by 2-3x, is lost in the system BOM wash, as fewer DRAMs are being used in these early adopters' products as they launch their systems to market, but prices are expected to drop to parity or lower than DDR2 once volume builds. In addition, DDR2 DRAMs are also relatively power-, performance-, and feature-constrained compared to DDR3.

A quick look across leading PC, server, and workstation makers in mid-May found NO advertised systems using DDR3 DRAMs, though there were some which advertised DDR2-800 and a few with overclocked DDR2-1066s from Corsair as 'standard' options. While HP-Compaq, Lenovo, Dell, and Acer may be too conservative to jump into DDR3 prematurely, there ARE PCs available from 2nd and 3rd tier PC suppliers which are using DDR3 DRAMs, mostly "White Box" makers.

The ranks of DDR3 DRAMs and DDR3 DRAM DIMMs which have been validated by Intel are also large, as is the existing portfolio of DDR3 or DDR2/DDR3chipsets, motherboard support for DDR3, and the other accoutrements which give life and benefit to PCs with DDR3. Most DDR3 available today is DDR3-1066 and 1Gb density or higher; DDR3-800 and 512M DDR3s are probably already consigned to the dustbin of history. Like DDR1 and DDR2 before them, the earliest versions, the 'proof of design and bragging rights', were null and void as production vehicles almost from the start.

Today's DDR3 market conclusions:

1. There is NO DDR3 in significant quantities in PCs , servers or workstations yet, and none at all in the PC Majors' products...Dell, HP/Compaq, Lenovo, Acer.
2. DDR2-667 constitutes the mainstream DRAM in use, but DDR2-800 is present in large volumes. DDR2-1066, despite achieving the extraordinary feat of being a late-add to the JEDEC DDR2 specification, and being supported by chipset makers and some MPU suppliers, is still confined to the 'overclocker/enthusiast' niche, with high price premiums and low volumes.
3. According to DRAM Exchange, DDR2-667 and DDR2-800 are priced about the same, showing, as we saw with DDR1, that the manufacturer's yields a faster than the demand coming from the market: HS parts are not scarce, at least up to and including -800.

Short observations on DDR2 DRAMs in PCs: The first DDR2's took over from DDR in PC systems offered by Dell in summer of 2004, and were DDR2-533; the only sustained use of the slowest speed bun for DDR2, DDR2-400, was in servers, which rely on mostly custom chipsets and decidedly non-commodity and non-PC system architectures to get bandwidth out of their DRAMs. Dell has been Intel's early market lead-in for various products, and it was felt that this move by Dell, though the system performance benefits were arguably non-existent, would get the DDR2 DRAM market kick-started.

History showed, however, that this move only created a substantial confusion as to where the market was headed, and many, if not all DRAM makers, sloshed their wafer start mix back and forth between 'incoming DDR2, the DRAM of tomorrow' , and 'yesterday's DDR', creating confusion for DRAM makers, in relative DRAM pricing and supply-demand balancing. 'Crossover' in pricing between DDR1 and DDR2 took place several times, going both ways, as the market searched to equilibrium and direction.

All this happened until everyone came back to work after the Christmas holidays in December 2005. Early 1Q06 found DDR2-667, with a measurable performance benefit in wide and widening use in PCs. In fact, this probably marks the start of the true DDR2 DRAM era, not 3Q04.

On this point, AMD, which added the DRAM controller onto the MPU for this transition, strategized correctly and continued to ship competitively performing Athlons and Opterons into systems that still used DDR1 as their DRAM memory, and to gain MPU market share at the expense of Intel.

Today, as noted above, the PC world is still largely DDR2-667...some of which are truly DDR2-800 downbins. Today, in mid-2008, 30 months after DDR2-667 rose to the top of the DRAMs-into-PCs heap, makes one wonder about the benefits of even having DDR2-400, 533, (667), (800), 1066 and 1066+ superbins. For sure the major DRAM-using segment ignored all but DDR2-667. By most measures, no benefit of DDR2 over DDR1 in PCs was evident until DDR2-667... enabled by all the associated chipsets, HS bus and other system changes that had to, or did, change at about the same time.

There may be an important lesson here for DDR3, which by most prognostications (for the PC space at least), is way behind in market penetration, in achieving price parity with DDR2 (why shoot yourself in the foot?) and presenting an indisputable value proposition to PC makers and their customers. Early 2008 DDR3 optimists were looking for 30% DDR3 penetration and DDR3 prices to be within 10% of DDR2 by year-end 2008, which, at this point in mid-2008 would be considered (a) impossible and (b) foolish, respectively.

Denali's view of DDR3 in PCs: So, let's say DDR3 will be between 5-8% of DRAM production as we leave 2008, and prices MAY be only 1½ to 2x those of DDR2. Let's further submit that DDR3-800 and 1066 are now almost surely dead letters, 512M is already history (and not just for DDR3), 1Gb DDR3 will probably be a minor play, and that the PC DDR3 DRAM market will first gain traction in a quantum leap to DDR3-1333 and 2Gb devices some time in 2H 2009. It is hard to see it coming together much faster than that, and much of the early DDR3 work on chipsets, mother boards, enablement and validation, as well as Gen I and Gen II DDR3 DRAM designs, will have been (almost) for naught. DDR3 may see its first truly production part in the sub-60nm or '53nm' node, where it delivers a demonstrable performance advantage to a PC world whose attention has shifted to more to low cost, low power, low 'birthweight' .... and continues to support windows XP.

Next week's DMR: DDR3 in embedded systems is completely different, quicker ramp, improved value proposition, clear product benefits. For example, Denali's Databahn controller for DDR3 DRAMs has dozens of design wins already, across most market segments. We'll tell you what we're seeing in the next DMR.