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Samsung retains XBox DRAM gig

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Samsung has retained the contract to supply memory for the Microsoft Xbox games 'puter and is so pleased that it has issued a press release to celebrate.

Memory makers aren't usually in the habit of trumpeting the retention of contracts, but Xbox does have that special PR glow. And sales should sky-rocket with this year's debut in the Japanese and European markets.

Each box is supplied with 64MB of DDR SDRAM, assembled in four 128Mb (4Mx32) DDR SDRAM devices, so that will keep the Samsung production line busy.

Is this necessarily a good thing for Samsung, which is still losing money on DRAM production (although some reports say the company is the closest of all the memory makers to returning to profit)? So more sales means more red ink. Samsung has continuity of customer, but it will not have stable, predictable income from this contract (indeed from any contract with a major DRAM customer).

Contract prices are fixed fortnightly and are based on
DRAM spot prices, which are highly volatile. If there is a lot of fluctuation within the fortnight, major OEMs will demand, and obtain, price protection for any stock they have on consignment. ®

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