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Numonyx seeks flash memory supremacy

Posted: 18 Aug 2008 ?? ?Print Version ?Bookmark and Share

Keywords:storage? flash memory? NOR? NAND? DRAM?

Harrison: Our strategy is built upon delivering systems solutions and unique value to our customers, focused on a few selected segments to provide value.

Since the spin-off of Numonyx BV, the chip industry has been curious about the Intel Corp. and STMicroelectronics joint venture. Questions abound about its name, operation mode, business positioning, productivity, as well as its ambiguous relationship with Intel, ST, Hynix and Micron.

Brian Harrison, President and CEO of the non-volatile memory solutions provider, shared his insights about the company. Prior to the establishment of Numonyx, he worked as VP and general manager of Intel's flash memory group.

Efficiency over scale
Looking into how Numonyx positions itself in the flash memory market and how it will compete with industry leader Samsung Electronics, Harrison said, "Our strategy is not to be the fastest growing or the largest flash memory supplier. Our strategy is not to spend huge amounts of money building a new wafer fabrication every year, like the competition. Our strategy is to achieve profitability through the efficiency and cooperation between Intel and ST to lead in the flash memory industry."

He pointed out that some storage providers would prefer to invest billions of dollars in infrastructure, expand their market share and then reduce prices. This strategy could harm the development of the flash memory industry.

It will cost at least $3 billion to build a new 300mm wafer plant. "We're not in this �arms race'," he said. "We'll not be the market share leader at the expense of profitability or our clients' benefits. On the contrary, our strategy is built upon delivering systems solutions and unique value to our customers, focused on a few selected segments to provide value." He added that in the NAND business, "Our partnership with Hynix gives us access to the cost-efficiency, so we can get scale and size through our partnership."

Harrison explained that Numonyx produces all its NOR flash memory and it owns two 300mm wafer plants, located in Israel and Singapore. However, for the production of its NAND flash memory, it prefers to outsource production to Hynix's Wuxi fab.

"Our relationship with Hynix is quite crucial. We will make capital investments, and we'll expand capacity when the market requires us to do so," he noted. A critical reason for this strategy that does not ask too much from NAND capacity is that 90 percent of the company's sales comes from the NOR market.

Revenue generators
Numonyx is concentrating on the wireless handset market, which accounts for more than 75 percent of its business. Two other key markets are embedded and storage. It is estimated that sales will reach $3 billion this year. Harrison said, "I expect the other market segments to grow faster than wireless, so in time the markets will be more balanced. I expect NAND technology to grow faster than NOR, so that will become more balanced as well." But it will take some time.

According to iSuppli Corp., Numonyx accounted for 35.8 percent of the worldwide NOR market based on total revenue last year, ranking number one in the world.

As for competitors, he said, "In terms of future technology, we have clear leadership in the NOR market. We had 65nm in production in Q4 06. Our competitors are just now introducing 65nm technology. We have 45nm way down the path in development and we'll be ready in the near future. Our competitors have plans and talk about a rapid introduction of 45nm. However, realistically, it takes a couple of years from 65nm to 45nm."

Meanwhile, Samsung is emerging as Numonyx's strong competitor in the handset market. Samsung has taken a chunk of the mobile market with its multi-chip package (MCP) technology, and more of the NOR market with its NAND + SDRAM or DRAM.

"Anytime Samsung is in the market place, you should pay close attention, because it is a very strong competitor," Harrison commented. "Samsung provides services to consumers, on one hand. But on the other hand, they might compete with consumers in other aspects. For example, Samsung itself is running in the business of SSD and SD cards, as well as offering multimedia processors. But we're not competing with our customers. Our strategy is to serve clients rather than compete with them."

In the embedded market, Numonyx provides CE, DTV, STB, automotive and other industrial applications. "This is a market where we have a strong product portfolio. We're providing customized solutions for these applications," he emphasized.

Accordingly, Numonyx has established the Asia Embedded Business Group in Shanghai focusing on market development of mobile phones, CE and automotive. Also aiming at the popular needs of MCP in the present market, the company is specifically focusing on the development of complex packaging solutions.

MPC innovation, PCM tech
"The new company will do much more in MPC innovation," Harrison shared. "That is because we have a complete offering, including NOR, NAND and DRAM. Numonyx will meet different needs of different clients by offering customized MCP."

Since the establishment of Numonyx, phase-change memory (PCM) has been an emerging memory technology, as well as a trump card for the newly built company.

Harrison explained that PCM is a brand new non-volatile memory technology, which is different from all current flash memory technologies. PCM is also equipped with the reading and writing ability as NOR and NAND respectively, as well as the capability of changing on single bit at a time as DRAM. "I don't see PCM to replace NOR, nor to replace NAND or DRAM, but to expand and complement those technologies," he said. "I can give an example from history. We have NOR flash and expanded the market very quickly before, but it didn't replace EEPROM. Instead, it created a lot of innovative applications. I think PCM will do just the same and will emerge as some memory technology that becomes very exciting."

Create something better
The company is sampling a 128Mbit product at 90nm technology, but PCM is expected to be put into high-density applications with high-volume production adopting 45nm technology.

Harrison is confident about creating a new corporate culture. "Our philosophy and strategy is to take the best of both and create something better at Numonyx," he said.

The executive also explained the meaning of Numonyx. "Playing off the Greek word mnemonicsthe art of assisting or improving memory," Harrison shared. "We made a survey before choosing the name, and customers said they wanted to have a memory-aiding device, something you do to help you remember."

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