Nanotech - The Circuits Blog

Updated at 9:10 a.m. PDT: adding analyst comments.

On Tuesday, Intel and Micron Technology announced the development of high-data-capacity flash memory technology for flash cards and USB drives.

Intel-Micron chip will enable high-capacity USB drives

(Credit: Lexar)

And in a related announcement, Intel said Monday that it has validated a fix for its new 34-nanometer X25-M solid-state drive, which is based on similar flash memory technology. The bug affects users who set a BIOS drive password. That update is available here.

The two chipmakers, which partner in the manufacture of flash memory chips, said Tuesday that they have developed NAND flash memory capable of 3 bits per cell based on 34-nanometer technology. This allows greater data density than the standard 2-bits-per-cell technology and will result in high-capacity USB flash drives, according to Micron.

While packing more bits into a cell provides greater data densities, it is not as reliable as flash memory based on more standard technology, according to Kevin Kilbuck, director of NAND marketing at Micron. Therefore, the 3-bits-per-cell chips will be limited initially to flash drives, which don't require the data storage reliability of a solid-state drive, which is used as the primary storage device in laptops and servers.

"The chip is not for all markets," according to Jim Handy of semiconductor market researcher Objective Analysis, writing in a research note published Tuesday about the technology. "The companies explained that they need more experience in production volumes before they will be confident to position it as a chip suitable for the high-write environment of the SSD," he said. Handy is referring to the fact that users of solid-state drives typically record data at a much greater frequency than consumers who, for example, buy flash drives for digital cameras.

But Handy added that he expects the Intel-Micron chip by 2010 to "cause snags for the other vendors in the market: Samsung, and Hynix/Numonyx" and potentially be more profitable than the competition.

Micron is currently sampling the chips and will be in mass production in the fourth quarter.

SanDisk and Toshiba disclosed in February that they had developed 4-bit-per-cell technology, which the two companies said was the highest-capacity flash memory technology in the industry.

Micron Technology is entering the graphics memory business, going up against heavyweights Samsung and Hynix.

Micron is targeting its memory at the upper mid-range of the graphics chip market

(Credit: Nvidia)

Micron, which recently vaulted to the No. 3 spot in global sales of dynamic random-access memory (DRAM), is now aiming at the market for DRAM chips used with graphics processors from Nvidia and Advanced Micro Devices' ATI graphics unit.

The market for DRAM used with graphics processors is about 4 percent of the bits shipped into the DRAM market, according to Micron. DRAM is typically used as the main memory in PCs. This type of DRAM is also referred to as Synchronous DRAM, or SDRAM.

"Our upcoming 50-nanometer technology is very competitive when it comes to power consumption and performance," Robert Feurle, Micron's VP of DRAM marketing, said in a phone interview Thursday.

"I think it's a good point in time to begin discussions with big enablers Nvidia and AMD and get started with some design-ins," Feurle said.

Micron is making its debut with Double Date Rate 3 (DDR3) memory. This is the same type of memory used for the main memory of currently shipping PCs, which have gravitated from DDR2. In the future, Micron will look at making more proprietary graphics memory, referred to as GDDR3 and GDDR5. "No decision has been made yet but we're looking into that very seriously," Feurle said.

Initially, Micron is targeting the "upper mid-range" of the graphics processor market.

Micron says its DDR3 has a distinct power consumption advantage over GDDR3: standard DDR3 can go down to 1.35 volts. "GDDR3 is still running a 1.8 volts. We have a giant power savings advantage," he said.

Micron is targeting memory with speeds of 1600MHz "to get started with and going up from there," Feurle said.

The DRAM market overall has seen sliding sales, falling 20 percent in the first quarter from the fourth quarter and 44 percent from the year-earlier period, according to iSuppli. The problem is overcapacity, which has most notably brought Taiwan memory makers to their knees. In that country, some manufacturers have faced possible bankruptcy.

"Micron now has renewed its competitive vigor, mainly due to its acquisition of a 300mm fab from Inotera in Taiwan," iSuppli said recently. Fab refers to fabrication facility or factory.

Taiwan's economic affairs minister has retreated from previous statements that suggested a merger of the country's ailing memory chipmakers was likely, saying it's "too complicated," according to reports.

Instead, Taiwan Memory Co., the new government-backed entity, will focus on acquiring technologies and tapping existing manufacturing plants in Taiwan, according to a Bloomberg report.

Economic affairs minister Yiin Chii-ming and John Hsuan, a former United Microelectronics Corp. executive who was appointed by the state to oversee the formation of Taiwan Memory, are also saying that the scale of the aid plans will be pared back, Bloomberg said. This is a departure from previous statements that suggested a massive consolidation of the six loss-ridden memory chipmakers was likely.

"It is wrong to assume we would take in these companies with all their debts and problems," Bloomberg reported, citing an interview with Chen Chao-yih, head of the economic ministry's industrial development bureau. The six companies have combined debt of about $11 billion.

Taiwan's memory chipmakers lost a combined $12.5 billion in 2007 and 2008, highlighting the dire straits--including bankruptcies, widespread plant closings, and layoffs--that the memory chip industry is in worldwide.

The six companies are: Nanya Technology, Inotera Memories, Powerchip Semiconductor, Rexchip Electronics, ProMOS Technologies, and Winbond Electronics.

Taiwan named a chip industry veteran to head a state-backed company that will merge six memory chipmakers, following pleas from domestic companies desperate for financial aid.

Previous reports had cited an approval for loans, but on Thursday the economic affairs ministry took this a step further and named former United Microelectronics Corp. executive John Hsuan to head a state-backed company, according to Bloomberg. Taiwan's government will hold less than a 50 percent stake.

Taiwan Memory Co. will be established within six months. It has not been decided yet what role Japan's Elpida Memory or U.S.-based Micron Technology would play, according to the report. One of these two memory chipmakers could either collaborate with the merged companies or become part of the new entity.

At stake is Taiwan's dynamic random access memory (DRAM) industry. DRAM is the main memory used in personal computers. While all memory chipmakers have been suffering, Taiwan's DRAM industry has been falling further and further behind market leaders Samsung and Micron and posting big losses.

The Taiwan-based companies are Nanya Technology, Inotera Memories, Powerchip Semiconductor, Rexchip Electronics, ProMOS Technologies, and Winbond Electronics.

The companies posted combined losses $12.5 billion in 2007 and 2008, Bloomberg said.

Memory chipmakers, the hardest-hit of the silicon suppliers, this week faced bankruptcy, layoffs, and bleak prospects.

Micron Technology kicked things off by announcing that it would cut as many as 2,000 jobs. Micron and other memory chip manufacturers are all singing the same sad song: slumping revenues amid a steep downward price spiral.

The largest U.S. maker of memory chips said decreased demand for specialty DRAM products had "created additional challenges" for its Boise, Idaho, manufacturing operations. As a result, Micron said it will phase out 200-millimeter wafer manufacturing operations at the company's Boise facility.

The same day, flash memory chipmaker Spansion, previously a joint venture of Advanced Micro Devices and Fujitsu, announced layoffs totaling approximately 3,000, or 35 percent of the company's total workforce.

Spansion's CEO, John Kispert, said the Sunnyvale, Calif., company has been forced to "bring our costs in line with the current expectations for significantly reduced revenues."

Kispert also mentioned that he is positioning the company for a "restructuring and/or sale." The company expects the reduction in workforce to provide it with annual cash cost savings of approximately $225 million.

But this wasn't the worst of it. Qimonda, an affiliate of Germany-based Infineon Technologies, said on the same day that it was seeking bankruptcy protection under Chapter 11 for its U.S. unit. In January, Qimonda filed for insolvency protection in Germany after it was not able to secure government financing.

Intel topped off the bad news on Wednesday by disclosing that it was considering getting out of the flash memory-manufacturing business. Intel CEO Paul Otellini made this statement at a Goldman Sachs investor's conference: "It may not be essential for us to have our own NAND factories to build (flash memory). We could probably specify the product that we want and buy it from third parties," he said.

Is there any upside to all this bad news? Maybe.

"A lot of the end-market conditions for all electronics are awful, but we know all this already, and to a certain extent, that is looking backward," said Avi Cohen, managing partner of Avian Securities, which tracks the memory chip market. "Several component (suppliers) and semi(conductor) guys have echoed the fact that February is not getting worse, which is a nice improvement."

Micron Technology is cutting as many as 2,000 more jobs because of slumping demand for its products, as the shakeout in the memory chip business continues.

The largest U.S. maker of memory chips said Monday afternoon that decreased demand for specialty DRAM products has "created additional challenges" for its Boise, Idaho, manufacturing operations. As a result, Micron said it will phase out 200 millimeter (mm) wafer manufacturing operations at the company's Boise facility.

"This action will reduce employment at Micron's Idaho sites by approximately 500 employees in the near term and as many as 2,000 positions by the end of the company's fiscal year," the company said in a statement. Its fiscal year ends in August. Micron added that it has sufficient manufacturing capacity remaining and "does not expect any disruption in product supply required for customer needs."

These job cuts are on top of the workforce reduction announced in October in its flash memory chip operations, the company said. "These workforce changes were not anticipated or included in Micron's earlier 15 percent global workforce reduction announcement last October."

This news follows quickly on the heels of an announcement by German memory chipmaker Qimonda, which said earlier Monday that its U.S. operations would seek Chapter 11 bankruptcy protection.

Micron said that market conditions are not improving for memory products. "We remained hopeful that the demand for these products would stabilize in the marketplace and start to improve as we moved into the spring. Unfortunately, a better environment has not materialized," said Steve Appleton, Micron chairman and CEO, in a statement.

The company will continue to operate its 300mm research and development fabrication facility at the Boise site and perform a variety of other activities.

Cash restructuring charges will be approximately $50 million, which will generate a gross annualized operating cash benefit of $150 million, the company said. The net operating cash flow effect will be neutral for fiscal year 2009.

In the fiscal first quarter ended December 4, Micron posted a net loss of $706 million.

The memory chip industry overall has been caught in a particularly brutal downward price spiral that is hurting even the largest players, including companies like Samsung and Hynix.

Solid-state drives may see heady growth despite a sliding world economy, according to a report released Tuesday by a market research company. Devices like the Apple iPod and iPhone are expected to drive growth.

Micron Technology along with its partner Intel are challenging SSD market leaders Samsung and Toshiba, In-Stat said

(Credit: Micron)

Flash memory revenue in the solid-state drive segment will see compound annual growth rates of over 100 percent through 2012, according to market research firm In-Stat. The type of flash used in solid-state drives is referred to as NAND flash.

"You're starting from quite a small base. Back in 2006, you're in the tens of millions (of dollars) kind of a number. By 2012, you're easily over five billion. So the growth rates do get rather high," said Ian Lao, a senior analyst at Scottsdale, Ariz.-based In-Stat. The market researcher forecasts compound annual growth at 106 percent from 2006 through 2012, Lao said.

In the consumer segment, Lao says he expects to see most of the growth in small devices like portable music players and smart phones. Music players such as the Apple iPod and Microsoft Zune will adopt solid-state drives instead of the tiny 1.8-inch hard disk drives they use now because of better durability and shock resistance. "They suffer the risk of, hey, I just dropped my Zune, it doesn't work anymore," Lao said. SSDs will provide much greater reliability, he said.

And as smart phones become more PC-like, they will graduate from relatively simple flash drives to more sophisticated SSDs with the same Serial ATA (SATA) interfaces used in PCs today, Lao said. An iPhone, for example, with a more computer-like operating system and features would use an SSD, Lao said.

Future ultra-portable laptops, represented today by the MacBook Air and HP Voodoo Envy 133, will also drive SSD growth, as will Netbooks.

Sharp growth will also be seen in the corporate enterprise market. SSDs will, in an increasing number of cases, replace very-high-speed hard disk drives in server environments, Lao said.

Flash drives (non-SSD) will remain widely used in various music players, mobile handsets, after-market cards, and USB flash drives, with a combined market share of more than 80 percent during the next couple of years, according to the report. However, this percentage will drop to about 70 percent by 2012, as SSDs grow in importance, the report said.

Worldwide NAND flash revenues are likely to grow at a compound annual growth rate of 29.7 percent from 2007 to 2012 to reach $61 billion, In-Stat said. Revenues for NOR flash--used, for example, to store program code in cell phones--will increase at a 6 percent compound annual growth rate from 2007 through 2012.

In a U.S. District Court patent ruling against Rambus, the judge highlighted some of the company's aggressive tactics for targeting and suing memory chip manufacturers.

On Friday, Judge Sue L. Robinson, in the U.S. District Court in Delaware, ruled that Rambus' patent suit against Micron Technology is "unenforceable," citing "spoliation," defined as the "destruction or alteration of evidence." This occurs when a party has "intentionally or negligently breached its duty to preserve potentially discoverable evidence," Judge Robinson wrote in her opinion.

As a result, 12 Rambus patents are not enforceable against Micron, the largest U.S. manufacturer of memory chips.

Shares of Los Altos, Calif.-based Rambus, which licenses technology for high-speed memory architectures, plunged almost 40 percent, to $11.42 in afternoon trading Friday.

In the opinion, Judge Robinson also cited Rambus' tactics for aggressively suing companies. One September 29, 1999 e-mail quoted in the opinion said that a consensus had been reached by Rambus on the "need to sue a dram company to set an example" and that Rambus should publicize the patents and the suits to "put all dram/controller companies that use sdram/ddr...on notice." (SDRAM stands for Synchronous Dynamic Random Access Memory; DDR stands for Double Data Rate.)

Robinson also declared in the opinion that "in light of Rambus' litigation conduct, the very integrity of the litigation process has been impugned...(and) that the appropriate sanction for the conduct of record is to declare the patents in suit unenforceable against Micron."

Micron had been a target of Rambus, along with other companies including Hitachi, Hynix, and Samsung. "We are pleased with the Delaware Court's ruling that the 12 patents Rambus asserted against Micron in the Delaware case are unenforceable," said Rod Lewis, Micron's Vice President of Legal Affairs and General Counsel, in a statement. "We believe that the decision is applicable to other pending cases, and we are reviewing the ruling to determine its potential impact," he said.

"Micron believes that the Delaware Court's ruling applies to the remaining patents in (a separate) California case and expects to file a motion with the California Court seeking a ruling of unenforceability based on the Delaware Court's decision," Micron said.

Rambus disagreed with the ruling. "We respectfully, but strongly, disagree with this opinion, and at the appropriate juncture plan to appeal," said Tom Lavelle, senior vice president and general counsel at Rambus.

"This opinion is highly inconsistent with the findings of the Court in the Northern District of California which looked at the same conduct and found there was nothing improper with our document retention practices. We are confident in the strength of our position and will continue to vigorously pursue fair compensation for the use of our patented inventions," Rambus said.

Updated at 7:15 p.m. PST with additional information from earnings conference call.

Memory chipmaker Micron Technology posted its eighth-straight loss as it was hit by a steep drop-off in chip prices caused by global oversupply.

In the quarter ended December 4, 2008, the Boise, Idaho company posted a net loss of $706 million or 91 cents per diluted share, on net sales of $1.4 billion, down 8.7 percent. Analysts surveyed by Bloomberg had forecast a loss of 45 cents a share.

The 2009 fiscal first quarter results include a $369 million write-down of memory chip products, Micron said.

The largest U.S. manufacturer of memory chips said it saw steep drops in the average selling prices for its DRAM and NAND Flash memory products, which dove 34 percent and 24 percent respectively. DRAM is used as the main memory in PCs. Flash is used for storage in digital cameras, digiital music players, and solid-state drives.

As a result, sales of memory products fell 4 percent from the previous quarter due to "significant decreases in market selling prices for the company's products," Micron said. Sales, however, measured in gigabits, increased 35 percent for DRAM and 40 percent for NAND flash memory.

Micron said anticipated capital expenditures for fiscal 2009 have been revised downward from last quarter's "guidance" of between $1 billion and $1.3 billion to between $650 million and $750 million.

Micron Chief Executive Officer Steve Appleton also addressed the global memory chip production situation in the earnings conference call. "Most of the (memory chip) companies have announced in the neighborhood of 20 percent, 30 percent," he said referring to year-end production capacity cuts. Appleton cited Hynix, the second largest memory chip manufacturer, which is cutting capacity 30 percent.

"The rate at which capacity comes back online will be determined by what the demand profile is through the first half of '09," he said.

He added that chip production equipment vendors may face a dire 2009. "If you talk to the equipment guys, they will tell you that they may not have any business in '09 in certain categories."

Speaking to the possible bailout of the Taiwan memory chip industry, Appleton said that this money is not likely to increase capacity (i.e., increase supply) because most of the money would simply go for things like debt relief, not necessarily to build new capacity.

During the quarter, Micron announced plans to cut its global workforce 15 percent through 2010 and slashed NAND flash production at a joint venture with Intel by approximately 35,000 (200 millimeter) wafers per month.

Micron currently has about $1 billion in cash and short-term investments.