Intel to tackle flash memory card market

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debut at 256 megabits. Consumer electronics, Billerbeck acknowledged, is a tough market. Some 16-megabit parts sell for as little as 83 cents. While that's far lower than the prices Intel currently fetches for its high-end flash chips, the company will seek deals in the CE arena.

Billerbeck did not specify when Intel will begin to produce memory for the card market.

As memory battles take place, the flash market as a whole is also looking at difficult technical hurdles just a few years away. Many analysts and even executives state that alternatives to flash will likely have to start coming to the fore after 2009. Flash memory makers will likely be able to shrink their parts and produce them on the 35-nanometer process, which begins in 2009, but the basic architecture of flash will make it difficult to shrink it further.

"After 35 nanometers the wheels begin to fall off," he said. One alternative Intel is looking at is Ovonics Unified Memory. This technology stores data in material that is similar to the stuff used to make CDs.

As is traditional in this often contentious market, Billerbeck took a couple of potshots at rivals Samsung and Spansion, a joint venture between Advanced Micro Devices and Fujitsu primarily managed by AMD. Spansion's premier flash chips are sold under the MirrrorBit brand. The company has been having difficulty producing these in large numbers, he said, because they are not easy to shrink. Spansion is currently making MirrorBit on the 110-nanometer manufacturing process and will have a tough time going to 90-nanometer, he asserted.

Tom Ely, chief marketing officer for Spansion, dismissed Intel's claims and said that AMD, in its factories, has already produced samples of a 1-gigabit MirrorBit chip at 90 nanometers.

Spansion, which also makes NOR, passed Intel in market share in the second half of 2003 but got surpassed by Intel again in the third quarter of last year.

Tuesday, when asked whether Intel was deliberately lowering prices to take market share from Spansion, Intel CEO Craig Barrett replied, "They didn't complain when we raised prices and lost market share."