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This USB drive is made of solid gold, but its golden age is over.

(Credit: Super Talent Technology)

With all the buzz about solid-state drives that Intel, Super Talent Technology, and other companies have been making, I am a little surprised to learn that the NAND flash-memory market--once one of the fastest-growing segments of the global semiconductor industry--is actually facing a historic downturn.

According to a forecast released on Friday by iSuppi, a technology research and advisory-services provider, the NAND-type flash-memory market has been stricken by weakening consumer spending, causing revenue to decline in 2008. Revenue is expected to decline in 2009, also.

In 2007, total worldwide revenue of the market was $13.9 billion; in 2008, this number is estimated to be about $12 billion--down by 14 percent. The forecast predicts that in 2009 the revenue will decline by another 15 percent.

The NAND market is being impacted by several factors. The biggest challenge is the sale of products that use NAND flash memory, inducing personal media players, flash-memory storage cards and USB flash drives. These products account for almost 80 percent of total NAND chip demand and are sold mostly in retail stores, where prices are continuously slashed because of the downturn in the global economy.

The second is the change in consumers' demand. As the storage capacity of flash-memory devices continues to increase, consumers don't need to upgrade their products as often and are not as sensitive to price declines as they used to be.

While this sounds depressing, it's actually good news for consumers, all in all, especially with the holidays coming up. Still, if you are looking to wait for the price of the solid-gold USB drive to go down, you might have to wait for a very long time.

SanDisk sees flash memory maxing out during the next decade and believes 3D technology is the answer.

A model of stacked Toshiba transistors

(Credit: Michael Kanellos)

Flash memory disk supplier SanDisk said this week that it is looking beyond flash memory because of anticipated limitations. SanDisk intends to tap into 3D read-write memory technology it acquired with the purchase of Matrix Semiconductor back in 2005.

3D memory chips can store more data vertically, allowing greater densities. While conventional integrated circuits put all active circuitry on the silicon substrate, SanDisk's 3D architecture deposits multiple layers of active memory elements so that circuitry extends vertically as well.

Speaking at this week's second-quarter earnings conference call, Sanjay Mehrotra, SanDisk president and chief operating officer, said his company is "developing the 3D read/write memory that we believe will replace NAND flash sometime in the next decade when it can no longer be economically scaled."

SanDisk 3D technology uses multi-layered three dimensional integrated circuits

(Credit: SanDisk)

This follows a Securities and Exchange Commission disclosure earlier in the quarter covering an agreement that SanDisk signed with Toshiba to collaborate on the development of rewriteable 3D memory. SanDisk and Toshiba "will jointly perform research and development" on 3D memory, the companies said in the disclosure.

SanDisk has made progress with the technology since it acquired Matrix, according to Chairman and CEO Eli Harari, speaking earlier this week duing the earnings conference call. "SanDisk has been making good, steady progress since our acquisition three years ago of Matrix Semiconductor...We currently have more than 200 issued patents that cover key elements of 3D rewritable memory technology," Harari said.

Based on these statements and its collaboration with Toshiba, SanDisk believes 3D memory, though challenging, is a viable successor to flash. Commercialization presents "significant challenges" but the "effort is worth the prize as 3D memory is a potential game changer," Harari said. The technology would "achieve the cost structure to disrupt hard disk drive in the coming decade," he said.

It's been a long haul for phase change memory, but the goal is in sight.

Numonyx, the memory joint venture between STMicroelectronics and Intel, is already shipping samples of phase change memory (PCM) chips to customers and will start shipping PCM chips commercially later this year, CEO Brian Harrison said at a press conference Monday.

"We expect to bring it to market this year and generate some revenue," Harrison said. "It is one to two years before it becomes widely commercially available."

Hearing a CEO talk about existing samples and near-term commercial shipments is a big deal for PCM. The technology has been stuck in the proverbial "a few years away" phase for a long time.

"It could be cheaper than flash within a couple of years," analyst Richard Doherty in said in 2001, predicting the technology might hit the market in 2003.

"We are making good progress," Stefan Lai, one of Intel's flash memory scientists, said in 2002.

Gordon Moore, co-founder of Intel and the man for whom Moore's Law was named, had an article in the September 28, 1970 issue of Electronics predicting that Ovonics Unified Memory, another name for the same type of memory, could hit the market by the end of that decade. (The same issue of Electronics also included this article: "The Big Gamble in Home Video Recorders.")

The delays have largely stemmed from two sources. First, it's not an easy technology to master. In phase change memory chips, a microscopic bit on a substrate gets heated up to between 150 degrees and 600 degrees Celsius. The substrate is made of the same stuff as CD disks. The heat melts the bit, which when cooled solidifies into one of two crystalline structures, depending on how fast the cooling takes place. The two different crystalline structures exhibit different levels of resistance to electrical current, and those levels of resistance in turn are then as ones or zeros by a computer. Data is born.

Both Intel and ST made a significant amount of progress in controlling the material in the past few years, Harrison said.

Size matters
Second, the makers of flash memory have continued to improve their technology. Back in 2001, some believed that flash would hit a wall at the 65-nanometer level of chip design. Then that got moved to 45 nanometers. Today, manufacturers mass-produce flash at 65 nanometers and have samples at 45 nanometers. Numonyx has samples of traditional NOR flash at 32 nanometers. Why switch when the existing technology continues to work?

Again, in the past few years, Intel and ST have made progress and figured out a way to produce PCM chips on the manufacturing lines developed for standard chips. That has eroded the barriers to bringing PCM out.

Although Philips, IBM, and others have made progress in PCM, only Samsung is close to coming out with chips commercially, Harrison said.

Why will the world want PCM? Performance, says Numonyx CTO Ed Doller. PCM chips can survive tens of millions of read-write cycles, he said, or far more than flash. Reading data to PCM chips takes 70 to 100 nanoseconds, or as fast as NOR flash. Data can be written to the chips at a rate of 1 megabyte a second, or equivalent of NAND flash. There is also no erase cycle, making it similar to DRAM.

In other words, you have the best attributes of three different types of memory--plus, PCM will potentially use far less power.

The cost premium is also coming down fast. By next year, Numonyx hopes to make PCM chips, using 45-nanometer processes, that can hold two bits of data per cell. If that's possible, those chips would compete in price with single-bit-per-cell NAND flash, the memory that's being put into solid-state drives today, said Doller.

But the most important thing is that scientists believe they will be able to increase the density of these chips comparatively easily. In the future, standard flash chips will need additional circuitry for error correction and other functions. Not so with PCM. The smaller the bits get, the less heat that will be required to flip them, Doller added.

"The most important thing is that it is scalable," Doller said.

Solid-state drives are still going to be somewhat hard to find and expensive in 2008, but mass production, cheaper flash, and tech advances will start to change that in 2009 and 2010.

Micron Technology, the Boise, Idaho-based maker of DRAM and flash memory, this week unveiled plans to come out with solid-state drives. The drives function like regular hard drives. But instead of storing data on spinning disks, solid-state drives store it on NAND memory chips--the kind found in cameras and MP3 players.

Micron will start mass-producing solid-state drives in the first quarter of 2008. The first drives will hold either 32GB or 64GB of memory. While that's less than half the capacity of the average notebook drive today, it's actually more storage than most business users need, said Dean Klein, vice president of memory system development at Micron. Plus, solid-state notebooks can come out of deep sleep or launch applications far more rapidly.

"60GB to 80GB is the sweet spot for the notebook market," he said.

Micron didn't talk pricing, but the drives will likely cost a few hundred dollars, a stumbling block. For example, swapping out a 160GB standard hard drive for a 64GB solid-state drive (from Samsung) on a Dell XPS 1330 notebook costs an additional $950. Considering that the notebook with the 160GB drive already costs $1,599, the solid-state drives aren't exactly economical.

Nonetheless, the magic of Moore's Law and the ability of memory makers to take it on the chin are going to make these drives more affordable. The first thing that will happen is that toward the end of 2008, solid-state drive makers will start to incorporate multilevel cell flash chips in the drives, Klein said. Manufacturers currently use single-level cell flash.

Multilevel cell chips hold two (and soon four) bits of data per cell. The chips aren't as reliable as single-level cell memory, but the error rates are small enough to make these types of drives more than adequate for the notebook market, he added.

In addition, multilevel cell chips will enable drive makers to increase the capacity of their drives, driving down the price. At equal capacities, multilevel cell chips could cut the price of making a drive by roughly 40 percent, estimated Frankie Roohparvar, vice president of NAND development at Micron.

Meanwhile, the world is swimming in NAND flash, leading to drastic price declines. NAND prices are set to drop 57 percent this year and 52 percent next year, said Joseph Unsworth, an analyst at Gartner.

Put those two factors together, and it could be possible to come out with a 64GB solid-state drive for close to $300 toward the end of 2008, Unsworth speculated. That's still high. He estimates that only 8 million solid-state drives will get shipped in all of '08.

But after that, the industry should begin to be able to show the benefits of these kinds of drives, the Micron executives predict. Think about it. Even if price declines begin to slow, 64GB drives will likely move toward the $200 range by late 2009 and then drop to sub-$100 about 18 months after that. Hard-drive makers will continue to increase the density of their products at the same time, of course, but competition between the two technologies will become tighter.

It happened in MP3 players, after all. Most upscale players came with 1.8-inch drives. The industry, however, at one point abruptly switched to flash.

Unsworth said the flash makers are going to have to tout the supposed benefits of having a flash drive with less capacity than a spinning disk (better battery life, can withstand a drop from a table better, you may not need all that storage, etc.).

He added that notebook makers will have to cooperate by making smaller laptops that showcase the features of flash. Flash takes up less space and, because it doesn't radiate as much heat, you can eliminate a fan. Currently, the notebooks that contain flash are basically the same size as the hard-drive models.

"With MP3 players, it was easy. You just turn it sideways and quote the battery life," Unsworth said.

(Credit: Samsung)

No, that's not a typo.

The current reigning king of flash memory pushes the envelope for NAND flash a little further with a 64Gb (gigabit) memory chip. Put 16 of them together and it amounts to 128GB (gigabytes), which is enough to put some hard drives to shame. Samsung claims the mega-memory card is capable of storing 32,000 MP3 files.

It's built with a new manufacturing process that Samsung dubs the self-aligned double patterning technology (SaDPT), which must be pretty heavy stuff because the company has applied for 30 patents in connection with the new 64Gb flash device. But don't expect this drugged-up memory card to power the new toys you get for Christmas. Samsung is expecting production to commence only in 2009.

(Source: Crave Asia)