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lack of enough Infineon GDDR3 memory to blame for Xbox 360 shortage ?

Air Raid
Posts: n/a
      02-14-2006, 10:23 PM

An article in The Mercury News by analyst Dean Takahashi has blamed a
new kind of memory chip used in the Xbox 360 console as the primary
reason for the console's slow manufacturing process, which has lead
to continued worldwide shortages and had a knock-on effect for the
profits of many publishers.

According to Takahashi's unnamed sources, the chips are made by a
German company named Infineon Technologies. Infineon have apparently
had trouble manufacturing enough of the chips at the right speed, which
has resulted in an overall slowing in the production process. It is
also suggested that an usually high fault rate on the memory chips has
exacerbated the situation.

Takahashi's report claims that Infinenon has been unable to produce
enough GDDR3 (graphics double date rate) memory chips, which are also
supplied by Samsung. Some of the Infineon chips are reported to run
slower than the 700 MHz necessary, potentially slowing down the entire
system, and it is these that have had to be weeded out of the
manufacturing process.

Microsoft has never been specific as to what the problem might be,
blaming only "component shortages" for the delays. "We have more
than 200 suppliers and I'm not going to point the finger at any one of
them," game division head Peter Moore is quoted as saying. In a speech
at the recent DICE Summit in Las Vegas, Moore suggested that the Xbox
360 shortages would be over within the next four to six weeks.


Xbox 360 delivery slowed by a chip
By Dean Takahashi
Mercury News

The shortage of Xbox 360 video game consoles that left many holiday
shoppers in angst was due in part to Microsoft's decision to use a new
kind of memory chip from a German company, Infineon Technologies,
according to people familiar with the game box's design.

The blockbuster video-game box has been hard to find on store shelves
since it debuted in November only to sell out early during the holiday
season, prompting complaints.

Infineon, one of two companies supplying the Xbox 360's storage memory
chips, has had trouble making enough of the chips at the right speed
for the game console that debuted last November, according to the
sources. As a result, Microsoft has not been able to meet the demand
for the console.

Peter Moore, head of Microsoft's game division, declined to comment on
whether there was a memory chip shortage. He blamed the scarcity of
360s on ``component shortages'' but refused to pinpoint the problem. He
said last week that the consoles would be more plentiful in stores
within four to six weeks thanks to the addition of a new contract
manufacturer, Celestica.

``We have more than 200 suppliers and I'm not going to point the finger
at any one of them,'' he said.

Infineon declined comment. Other Microsoft executives say that the
shortage wasn't due to any single problem, but a variety of problems
that included component shortages as well as normal start-up delays for
a huge manufacturing project. The Xbox 360 has more than 1,700

Critics suggest that Microsoft has squandered an opportunity to take
the leadership in video-game boxes away from Sony, which is expected to
launch the PlayStation 3 in North America this fall.

Sources say the shortage of the Infineon memory chips has prevented
Microsoft's contract manufacturers, Wistron and Flextronics, from
assembling enough consoles. Instead, those manufacturers have had to
spend time sorting good chips from bad chips.

Specifically, the sources say Infineon wasn't able to make enough GDDR3
(graphics double data rate) memory chips for the Xbox 360. Each box has
512 megabytes of GDDR3 that stores a game's data. Both Infineon and
Samsung supply GDDR3 chips to Microsoft.

Some Infineon chips ran slower than the required 700-megahertz speed,
according to the sources. This was a big problem because the Xbox 360
has only a single highway (dubbed unified memory architecture)
connecting memory with two processors, the graphics chip and
microprocessor. When either of those chips can't access memory as
needed -- in this case the slow memory chips -- the processing within
the entire system bogs down.

As a result, sources said, Microsoft has had to start sorting the slow
GDDR3 chips from the fast ones, adding a delay to Xbox production and
limiting the total numbers it can build.

``The faster the memory goes, the less room there is for error in a
system like the Xbox 360,'' said Shane Rau, an analyst at International
Data Corp. Rau wasn't aware of the console chip shortage itself, but he
said that the technical problem -- as described by sources -- was

The fastest GDDR3 chips are able to keep up with the rest of the
system. But the slow ones can actually make a game noticeably slow to
gamers, sources said. That's why Microsoft chose not to ship any
systems with the slow chips in them.

It isn't clear how much of the Xbox shortage the GDDR3 problem accounts
for, since Microsoft has cited a variety of problems.

Nam Hyung Kim, an analyst at market researcher iSuppli, said it is
plausible a shortage of GDDR3 memory chips caused the shortage of Xbox
360s. Only Samsung and Infineon are able to make the premium chips, so
a big customer such as Microsoft would have nowhere to turn if it
couldn't get enough from either supplier, he said.

These memory chips are also in big demand by creators of high-end
graphics cards for personal computers.

``I was concerned even before they released the Xbox 360 that they
wouldn't get enough supply,'' Kim said. ``This was a very aggressive
plan by Microsoft. To me, it was risky to go ahead. If there is a
shortage of these chips, it could very well cause a shortage of the
Xbox 360.''

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