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Why GigaDevice gambles on NOR flash memory

Posted: 21 Sep 2012 ?? ?Print Version ?Bookmark and Share

Keywords:NOR flash memory? NAND flash? fabless firm?

China fabless firm GigaDevice is not turning its back from the NOR flash market despite mounting challenges in generating revenue and product demand.

In a recent interview with EE Times, GigaDevice CEO and President Yiming Zhu proclaimed the NOR flash memory segment "a $3 billion market [per year] with no growth." Market researcher IC Insights backs that assessment, citing a 25 per cent decline in the NOR flash market in 2011. "While the market for NAND flash memory is forecast to top the growth list, NOR flash is forecast to be at the bottom of the list with the biggest per cent decline in sales for 2012." IC Insights predicts a 14 per cent drop in the NOR flash market in 2012.

So why go after a shrinking market?

"NOR flash is a market that's gradually scaling down," Zhu explained. "But almost all electronics systems-TVs, set-top boxes, DVDs, ultra-low-cost cell phones and others-are embedded with NOR flash."

That's good news for a small fabless company, but not so much for larger memory makers. NOR flash no longer appears to be the focus for either Micron or Spansion. At Micron, sales of NOR flash products were only 10 per cent of total net sales for its most recent quarter. Spansion appears preoccupied with its partnership with Nuance Communications, a move designed to accelerate voice recognition innovation for embedded technologies.

Meanwhile, Taiwan-based NOR flash makers like Windbond and Macronix are in a tougher spot, Zhu said, because they bear the burden of huge fab investments. "If you need to worry about when to buy new equipment at your fab to make new memory products, your decision on new technology [or] products tends to get delayed," he said. That's why IDMs are less agile than fabless companies.

GigaDevice sees a widening gap between the big IDMs (Micron, Spansion) and smaller flash makers (Winbond, Macronix). It hopes to fill the void.

Zhu defended GigaDevice's strategy this way: "If you can succeed in a market that everyone already thinks difficult and/or is getting out of, you win," adding, "Demand for NOR flash won't disappear. It's not a business that's going to die."

Beijing-based GigaDevice was founded in 2005 and has been profitable since 2010. It's expected to ring up $150 million in revenues this year. "Since 2009, we are on the fast track and we double [or] triple our revenue every year," claimed Zhou.

It offers a range of high-speed, low-power NOR Flash products, including: serial peripheral interface (SPI) flash, NOR MCP and parallel flash memories designed into embedded, consumer electronics and mobile communications devices. Samsung has been a NOR flash customer for two years. GigaDevice supplies 70 per cent of the NOR flash memory chips used by Samsung's PC unit. They are used as BIOS chips inside the PCs.

So why China?


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