New Entrants Seek Niches in NAND Flash Fray

Can new players get a foothold in a tough market?

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By Mark LaPedus
For some time, the NAND flash market has been primarily dominated by five vendors: Micron, Samsung, SanDisk, SK Hynix and Toshiba.

Other vendors have been seeking to get a foothold in the exploding market — with little or no luck. Intel Corp. and Powerchip Semiconductor Corp. have separately experienced limited success in NAND. And Elpida Memory Inc. and Spansion Inc. are co-developing NAND, although one analyst claims Elpida has bailed out of the alliance.

Now, Spansion has signed a new NAND deal with SK Hynix Semiconductor Inc. And two Taiwan vendors — Macronix International Co. Ltd. and Winbond Electronics Corp. — have recently entered the fray.

NAND flash is a tough business to crack despite soaring demand. It requires technology, intellectual-property (IP) and deep pockets. The capital required at the leading-edge of NAND is astronomical. And it is cyclical. For example, on April 3, SanDisk Corp. lowered its forecast for its first fiscal quarter 2012 ended April 1. Due to weaker than expected pricing and demand for its flash products, the company estimates total revenue to be approximately $1.2 billion, down from the previously forecasted revenue range of $1.30 to $1.35 billion.

Despite the challenges, several new vendors want to enter the sector. The new players are not looking to go toe-to-toe against the established vendors, but rather they are looking at niche markets.

On April 2, for example, NOR flash specialist Spansion entered the market by launching lower-density, single-level-cell (SLC) NAND products for the embedded market. Built around on an older-generation, 4xnm process node, the parts are based on technology from South Korea’s SK Hynix. Recently, South Korean mobile vendor SK Telecom took a controlling share of Hynix, resulting in the renaming of the memory maker to SK Hynix.

In any case, the deal raised questions about Spansion’s deal with Elpida. In 2010, Elpida and Spansion forged a joint NAND development deal. The companies were devising NAND based on Spansion’s so-called MirrorBit charge-trapping technology.

Used in its NOR flash lines, Spansion’s MirrorBit technology doubles the density of a flash memory array by storing two physically distinct quantities of a charge on opposite sides of a memory cell. Charge-trap flash (CTF) depends on a SONOS (semiconductor-oxide-nitride-oxide-semiconductor) capacitor structure, storing the information in charge traps in the nitride layer.

“We are still working with Elpida on our charge trapping NAND technology, which we believe provides a unique ability to achieve 1xnm NAND,” according to a spokeswoman for Spansion. “Our alliance with SK Hynix accelerates our time to market to deliver Spansion SLC NAND products for the embedded market, utilizing their manufacturing capability in 4xnm, 3xnm, and 2xnm.”

Greg Wong, an analyst with Forward Insights, a research firm, believes that Elpida is no longer working with Spansion. Elpida has recently filed for bankruptcy in Japan. “Elpida is no longer working on NAND,” Wong said. “CTF has some fundamental reliability issues, which is the reason for the Hynix alliance.’’

Hynix’ NAND technology is based on conventional floating-gate flash memory. When asked if the problem resides with Spansion’s CTF technology, Wong said: “CTF in general has reliability issues. It’s related to the technology itself, not specifically to Spansion.”

The analyst also believes that the new players — Spansion, Macronix, Powerchip and Winbond — do not pose a threat to NAND leaders. “They are focusing on low-density products for embedded applications — and not competing in mainstream high density consumer markets. All these players are using older technologies,” he added.

Jim Handy, an analyst with Objective-Analysis, agreed. “These companies are going after the markets that are being abandoned by the high-volume NAND makers,” he said.

Spansion’s SLC NAND product portfolio will be available in 1-, 2-, and 4-Gbit densities with 1 bit ECC. The first SLC NAND products resulting from its alliance with Hynix will be available beginning in the second quarter of 2012. As part of the relationship, Hynix and Spansion will enter into a patent cross-licensing agreement. 3xnm products will be available in the second half of 2012 and early 2013. The 2nm parts schedule will be announced soon.

Another vendor, Taiwan’s Macronix, recently entered the NAND market. The supplier of NOR flash and other products launched its first-generation SLC NAND line, dubbed the MX30LF family. Macronix has begun sampling SLC NAND products. Fabricated within Macronix’ fabs, the new MX30LF family consists of two products. The MX30LF1208AA and MX30LF1G08AA come in 512-Mbit and 1-Gbit densities, respectively. Both products utilize 75nm floating gate technology.