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All of which is good for fabless U.S. DRAM maker Alliance Memory which manufactures both legacy and new memory chips. After DRAM prices rebounded to an upward trajectory in Q1 2021, according to market research firm TrendForce, buyers expanded their DRAM procurement activities in the second quarter as they anticipated a further price hike and insufficient supply going forward.

Alliance Memory CEO David Bagby
DRAM users are being quoted lead times of one year and some suppliers have stopped taking new orders altogether, according to Alliance CEO David Bagby.
As the market enters Q3, a supply-demand imbalance is becoming more evident. Although OEMs/ODMs in the PC/notebook/tablet markets carry high levels of DRAM inventory, automotive, industrial and medical companies typically don’t. These manufacturers will feel the pinch as supplies tighten.
“The big guys are directing people to smaller suppliers, and they are in a great position to fill gaps,” said Tony Roybal, president, Americas Electronic Components, for Alliance distributor Avnet Inc. “Customers are facing 40-week lead times and even standing orders take an exceptionally long time to confirm.”
Despite the memory market’s volatility, Bagby acquired Alliance Semiconductor, a 30-year-old DRAM manufacturer, in 2006. At that time, with the exception of Micron Technology, large U.S. chipmakers had exited the DRAM market. Even the big Asian players, such as Samsung, were declaring many part numbers obsolete and shuttering some business lines, such as SRAM, entirely.
But the memory product array is so vast that, at any given time, some devices will be in short supply. Billed as a legacy DRAM producer, about 30 percent of Alliance’s business is dedicated to new products. Components are pin for pin drop-in replacements for SRAM, DRAM, and NOR FLASH ICs from all major memory suppliers including Hynix, Micron and Samsung. The company’s run rate in 2021 is double what it was in 2020.
“There was a need in the market for legacy components,” Bagby said, “so we went out to customers struggling to get Samsung. Now we have maybe the best representation of DRAM and SRAM product of anybody out there.”
Alliance’s portfolio includes a full range of 3.3V and 5V Asynchronous SRAMs used with mainstream digital signal processors (DSPs) and microcontrollers; synchronous SRAMs, low-power SRAMs, Pseudo SRAMs, 3.3V synchronous DRAMs (SDR), mobile DDRs, 2.5V single (DDR1), 1.8V double (DDR2), and 1.5V and 1.35V triple rate (DDR3) 1.2V quadruple rate (DDR4) synchronous DRAMs and 5V Parallel NOR Flash devices.
“If you look at our portfolio and our product lineup, though our market share is probably less than 1 percent, our part number offerings include more densities, more organizations, more speeds and more temperature ranges than most of our competitors,” said Bagby. Alliance services 5,000 customers per month mostly through distribution. The industrial and medical markets are the company’s two largest verticals.

Source: IC Insights
Big chip makers also tend to focus on high-demand, and therefore higher-priced, devices. As the electronics supply chain has adopted just-in-time, build-to-order and lean inventory practices there’s less inventory in the pipeline to respond to sudden spikes in demand.
As a fabless company, Alliance Memory can add capacity when needed, Bagby explained. It has five fab partners in Israel, Singapore, China, Taiwan and Korea. And, unlike most chip makers, Alliance carries broad and deep stock.
“We carry a lot of inventory and pride ourselves on ready-to-ship inventory and short lead times,” he added. “We also stock wafers to support upside.”
Alliance is facing some supply shortages just like every other chipmaker. “It turns out lead frames are in short supply,” said Bagby. “However, we have customers that are quoted a year’s lead time for products or have suppliers that stopped taking new orders. So we’re in pretty good shape. If a customer asks ‘do you have this?’ we can get it or make it.”
Alliance has invested heavily in wafer die to minimize or eliminate die shrinks and maintain stable pricing. It delivers most of its SRAM, DRAM, and FLASH products direct from stock and holds inventory in the U.S., Shanghai and Taiwan.
The memory upturn is forecast to continue into 2022, according to IC Insights. It will reach its next cyclical peak in 2023 when revenue grows to nearly $220 billion—smashing through the $200 billion sales level for the first time—before a cooling period returns in 2024. From 2020 through 2025, IC Insights forecasts the total memory market will grow by a CAGR of 10.6 percent.
In 2021, DRAM is expected to account for 56 percent of the memory market with flash memory accounting for 43 percent share. DRAM is also forecast to represent the bulk of memory unit shipments this year.