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Flash makers position for NAND surge

Posted: 01 Oct 2007 ?? ?Print Version ?Bookmark and Share

Keywords:NAND flash? solid-state storage? fab production?

Seeking to gain ground on Samsung Electronics Co. Ltd!especially after a disruption in the market leader's fab production earlier this month!NAND flash rivals Hynix Semiconductor Inc., IM Flash Technologies LLC and Toshiba Corp. are quietly expanding their production and readying a new class of sub-45nm devices.

NAND flash vendors are not only racing each other in the process-technology arena, but they are also preparing for a new demand and product cycle in the marketplace. A number of emerging applications are on the horizon for NAND, including flash BIOS, solid-state storage and flash-equipped TV with digital video recorder functions. To enable those applications, suppliers are moving down the process curve at a breakneck pace.

Reports have surfaced in August that market leader Samsung had demonstrated a 30nm NAND part. Toshiba, the world's second-largest NAND supplier, will shortly move into production at a new 300mm fab in Japan. And amid its current transition at the 56nm node, Toshiba is readying a one-two punch in the market: It is developing a 43nm NAND line and a separate 3bit-per-cell technology.

Meanwhile, after some process-transition issues, Hynix, the world's third-largest NAND supplier, plans to expand its bit growth by 100 percent this year. That word comes amid continued scuttlebutt about a new 300mm fab venture between Hynix and SanDisk Corp., though SanDisk has dismissed the speculation.

Not to be outdone, IM Flash, a joint venture between Intel Corp. and Micron Technology Inc., is ramping up a 300mm fab in the U.S. state of Utah. The venture is also manufacturing a 50nm NAND and has a sub-40nm product in development.

NAND flash vendors are stepping up their production to meet renewed demand in the marketplace and to capitalize on some lost business at Samsung. A power outage in August forced Samsung to shut down six manufacturing lines at a South Korean facility. The outage disrupted production of NAND devices, DRAMs and LSI chips. Power was restored in less than a day, but the disruption cost the chipmaker some $41 million in business.

While Samsung downplayed the events, the fab outage reportedly benefited its rivals. "We are seeing a lot of people coming to us" after the fab outage, said Frankie Roohparvar, VP of NAND development at Micron.

Overall, the fab disruption could represent about 10 percent of Samsung's monthly wafer output, which equates to roughly 1 percent of global NAND output in Q2 , according to iSuppli Corp.

iSuppli also suggests the outage could benefit Samsung!and its rivals!by creating a shortfall of supply and price hikes. Even before the fab outage, NAND supply tightened in Q2 as manufacturers slowed their production growth, according to the research firm.

Citing the fab power outage, memory clearing house DRAMeXchange said that NAND flash contract prices jumped by 15-20 percent in the first half of August alone.

As a result of those recent trends, iSuppli has upgraded its global 2007 growth forecast for NAND flash revenue to the 10-15 percent range, up from its previous prediction of flat growth.

Despite the apparent glitches, Samsung's global NAND flash memory revenue totaled $1.4 billion in Q2, up 18.9 percent from $1.2 billion in Q1. That gave Samsung a global NAND market share of 45.9 percent, up nearly two points from 44.1 percent in Q1, according to iSuppli.

Samsung outperformed its two closest competitors, Toshiba and Hynix, which had 27.5 percent and 14.6 percent shares, respectively, in Q2.

Samsung benefited by "expanding its sales to consumer applications, including Apple's iPhone and iPod lines," said Nam Hyung Kim, an analyst at iSuppli.

"Meanwhile, Toshiba increased its bit growth by only 2 percent due to its initial process migration to 56nm," Kim said. "However, iSuppli expects Toshiba's 56nm production yields to improve, causing its bit shipments to rise by more than 30 percent this quarter."

Samsung expands lead in growing sector.

Fab opening
Toshiba and its NAND partner, SanDisk, last month planned to celebrate the grand opening of Fab 4, a 300mm fab venture at Toshiba's Yokkaichi operations, near Nagoya, Japan.

This fab venture, called Flash Alliance Ltd, broke ground last summer. Current estimates say the fab could produce 67,500 wafers a month by Q4 2008.

The first NAND parts from the fab are based on Toshiba's existing 56nm process. Initial production for the fab is slated for Q4, as previously planned, said Stephen Marlow, executive VP of Toshiba's U.S. subsidiary, Toshiba America Electronic Components Inc.

The fab is moving into production at an opportune time. Besides Samsung's fab issues, the NAND market is finally experiencing a strong upturn following a major slowdown. "Looking at the balance of the year, the overall NAND market is looking at a shortfall," Marlow said.

Moreover, hoping to remain ahead of the curve, Toshiba is readying a 43nm MLC line, which is due out by Q1 2008. That is based on the company's 2bit-per-cell technology.

Taking it to the next level, "Toshiba and SanDisk are reportedly developing 3bit-per-cell technology at their 56nm process node to develop a 24Gbit flash memory device," said Young Choi, product technology manager for memory at Semiconductor Insights, in a recent report. "The 3bit MLC technology will also produce 48Gbit MLC NAND flash memories in the 40nm generation."

Another vendor, Hynix, also has a few tricks up its sleeves after a setback. The chipmaker experienced a 4 percent decrease in NAND bit shipments in Q2 due to process-migration problems at the 60nm node, according to iSuppli.

iSuppli suggests that Hynix will recover its market-share losses during Q3. "The company has a goal of increasing its sequential bit production growth by 100 percent in the third quarter," said Kim. "The company since June has been shifting its DRAM capacity on its 300mm fab line to NAND in order to achieve this."

The dark horse in NAND is IM Flash, the manufacturing venture between Intel and Micron. Intel itself increased its NAND bit shipments by 75 percent in Q2, while Micron achieved a 72 percent increase, according to iSuppli.

Micron has been making NAND devices within its own fabs in the U.S. states of Idaho and Virginia. Since the beginning of 2007, IM Flash has been manufacturing wafers at a 300mm fab in Utah. Mass production within the Utah fab is slated for Q3 of this year, according to Roohparvar.

Earlier this year, Intel and Micron announced 50nm MLC parts. At the time, IM Flash used "dry" 193nm scanners and a "pitch-doubling" technique to make those devices, he said. Pitch-doubling!or double-patterning!requires that the exposures be done twice, first exposing half the lines, etching and performing the other steps.

IM Flash has subsequently obtained a 193nm immersion scanner, which is being used to process the 50nm parts.

Roohparvar declined to comment on IM Flash's future products, but he dropped hints that the venture would leapfrog Toshiba's 43nm MLC technology. "We are going to be smaller than that," he said.

Future NAND products are geared for a new wave of applications, especially solid-state storage drives. Dell and others have launched PCs without traditional HDDs. These PCs use solid-state drives, but they sell for a premium.

As a result, many analysts said that solid-state storage drives will not hit the mainstream market until 2011. It is unlikely that solid-state storage will replace magnetic media in the near future, Roohparvar said. But based on the price-per-bit curve for NAND, the "tipping point" for solid-state storage could come in 2009, he said.

Don't forget TV
There is another emerging application for NAND: the lowly TV. The Micron technologist envisioned TVs that are integrated with TiVo-like personal video-recorder devices, which will require flash.

Dell, Sony and others have launched systems that tap solid-state drives in place of traditional hard drives; TVs turn to flash to enable personal video recorder-like functions.

And of course, there's Apple's iPhone. "It had an impact on NAND from a supply point of view," said Marlow. "The big question is whether Apple will be able to sustain" the demand.

iSuppli forecasts Apple will ship more than 4.5 million iPhones globally in 2007, 13.5 million units in 2008 and 21.1 million units in 2009. iSuppli predicts a second version of the iPhone will be released in the next 12 to 18 months.

In any case, NAND is back on the growth curve after having experienced a major lull. "The opportunities are enormous," Marlow said.

- Mark LaPedus
EE Times

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