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Can Hynix's new facility overcome NAND trials?

Posted: 02 Sep 2008 ?? ?Print Version ?Bookmark and Share

Keywords:flash memory? NAND market? Hynix fab?

Despite large losses and a memory downturn, Hynix Semiconductor Inc. has announced the launching of its new, 300mm NAND fab in Korea, with its initial production slated this month.

With this, the company becomes the wild card in NAND. Perhaps, the company is simply reckless and pursues the fab opening regardless of a NAND glut and vast financial losses.

Signs of resistance
Samsung Electronics Co. Ltd, Toshiba and the Intel-Micron JV are also ramping up relatively new NAND facilities, but those vendors are showing some restraints in the current climate. The question is whether Hynix's fab ramp will prolong the current and horrific NAND flash-memory downturn.

The NAND flash market has seen a sharp downturn since the 1H 08. iSuppli Corp. has recently cut its 2008 NAND annual flash revenue growth forecast from 9 percent to virtually zero.

Except Samsung, the other NAND suppliers are losing money. Intel Corp., Micron Technology Inc., Hynix and Toshiba are all losing revenues in NAND, caused by a performance glut and product procurement reductions from one of the major NAND buyers: Apple Computer Inc.

It's unclear how fast Hynix will ramp its new fab. But clearly, if the company does not exhibit any restraint, it could potentially prolong the NAND downturn. Some believe Hynix will show little or no restraint.

No recovery yet
Many are not expecting recovery until 2H 09. Samsung tends to be the mover and shaker in the NAND market, but Hynix could hold the supply and demand key.

There are other factors as well. "Flash needs very strong consumer electronics demand starting this month until December to turn around gross margins and sales for manufacturers," said Jim Cantore, president of consulting firm JLC Associates. "Slowing down the capacity expansion plans would also help a lot," he added.

Recently, Hynix has reduced its NAND production in a 200mm fab in Korea. Toshiba Corp. has recently closed a 200mm NAND fab amid a massive 300mm expansion plan.

But the fab shutdowns have not impacted supply. Now, Hynix, one of the largest NAND suppliers, ramps up a new 300mm fab. Situated in Cheongju, Korea, Hynix broke ground on the so-called M11 fab in April 2007. The fab, occupying a grand total of 294,637sqm, is the third plant at the site.

Determined to expand
M11 is scheduled to begin production of approximately 40,000 wafers per month starting in September. It will fabricate 16Gbit and 32Gbit NAND flash parts, based on 40nm technology.

Specifically, Hynix is creating NAND parts using the 48nm node. By completing the third factory, the company has a total capacity of 200,000 wafers per month.

The Korean company is also working with a partner. Last month, Numonyx BV, the memory spin-off of Intel Corp. and STMicroelectronics Inc., teamed up with Hynix to establish a major push in the NAND flash-memory market.

Building stronger ties
Under the agreement, Numonyx and Hynix have said a new, five-year contract was prepared to expand their joint venture programs in NAND. The companies will codevelop products and processes in the arena, including the anticipated 41nm lineup.

"Hynix plans to develop Cheongju site as the major NAND flash manufacturing facilities in the world starting from this completion of the third factory construction. Although recovery of the IC industry has been delayed, we will continuously secure competitiveness and growth engine for sustainable growth with our best technologies and active strategic alliances," said Jong-kap Kim, chairman and CEO, Hynix.

- Mark LaPedus
EE Times

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