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NOR crowd: If you can't beat 'em, join 'em, NOR flash makers adopt alternate memory technologies
Mark DeVoss, iSuppli
(05/05/2006 12:56 PM EDT)
URL: http://www.eetimes.com/showArticle.jhtml?articleID=187200677 Mark DeVoss is the senior analyst, flash /SRAM/MCP for iSuppli Corp. Contact him at mdevoss@isuppli.com

Responding to rising competitive challenges that have plagued the market during the past year, the top NOR flash memory suppliers have revamped their approach to battling rival NAND makers, switching their strategic credo from “go-the-course” to “if you can’t beat ‘em, join ‘em.”

NOR-type flash, long the dominant type of memory in mobile phones for code storage and other uses, recently has been facing rising competition from NAND in the wireless-handset market. New, feature-rich mobile-phone models are making greater use of NAND-type flash as a data storage medium.

About 90 million mobile phones manufactured in 2005 incorporated NAND-type flash memory for data storage purposes, representing slightly less than 10 percent of total handset shipments for the year, according to iSuppli Corp. However, by 2010, 650 million phones will employ NAND, representing 60 percent of total unit shipments.

The chart at the bottom of this contributed article presents iSuppli’s forecast of mobile-phone shipments broken down by NAND- and non-NAND-equipped products.

In the past, the top-three NOR suppliers — Intel Corp., Spansion Inc. and STMicroelectronics Inc. — have responded to NAND’s competitive challenge by offering solutions that were designed to maintain NOR’s mobile-phone dominance. These solutions employed NOR combined with other memory types, including SRAM, pseudo SRAM (pSRAM) and SDRAM, in order to provide complete code- and data-storage memory subsystems.

However, with NAND making continued inroads, Intel, Spansion and STMicroelectronics have recognized that in order to retain their roles as competitive memory-solution providers for mobile phones, they had to deliver data storage products that have a lower cost per bit than high-density NOR was able to provide. Because of this, all three have undertaken data storage offensives centered on NAND or other non-NOR technologies that are designed to counter the success of the NAND challengers.

This is no small task, given the competition. The top-three NAND flash suppliers — Samsung Electronics Co. Ltd., Hynix Semiconductor Inc. and Toshiba Corp. — are memory-market leaders, and collectively commanded 88 percent of overall NAND flash revenue in 2005.

The stakes in this battle are high: The market for all types of flash memory in mobile phones will expand to $7.6 billion in 2010, up from $4.3 billion in 2005, iSuppli predicts.

Two of the top-three NOR makers, Intel and STMicroelectronics, went outside their respective companies to create alliances with other memory suppliers in order to become suppliers of NAND flash themselves.

Intel, in the fourth quarter formed a NAND-flash manufacturing joint venture with Micron Technology Inc., called IM Flash Technologies LLC (IMFT). Intel in its first-quarter earnings announcement reported it shipped small amounts of NAND from IMFT during the first three months of the year.

Micron in 2005 shipped $238 million worth of NAND. The addition of the IMFT capacity will enable Micron to become a bigger player in 2006.

Intel’s first-quarter shipments from IMFT and the added capacity from Micron suggest the combination of these two suppliers will significantly expand their NAND flash revenues in 2006. These companies will have an even greater impact in 2007, as they plan to apply Intel’s Multi-Level-Cell (MLC) flash technology to NAND starting in the second half of 2006.

Meanwhile, STMicroelectronics expanded into NAND via a manufacturing relationship with Hynix that was established more than a year ago. STMicroelectronics shipped $214 million worth of NAND flash in 2005 and is expected to post significant improvements over that level in 2006.

Beyond shoring-up their positions in the mobile-phone business, Intel and STMicroelectronics’ strategy of adding NAND to their memory portfolios may allow them to expand into the much larger markets for data storage in consumer-electronics and computing products.

The third major NOR supplier, Spansion, chose an alternative tact by redeploying its NOR-based, two-bit-per-cell MirrorBit technology into a product called ORNAND, which combines a NAND-like interface with a NOR-type memory cell structure.

On the surface, this may appear to be an odd strategy because it centers on a NOR-like technology, rather than NAND, which is seemingly a more cost-effective and high-density-capable approach. However, MirrorBit products are achieving greater acceptance among mobile-phone makers. Furthermore, recent announcements indicate that MirrorBit may be capable of storing four bits on each transistor gate, making ORNAND a more compelling alternative as a data storage solution.

While it is too early to evaluate the potential for success of the NOR makers’ strategies as they take on the NAND behemoths, it will be very interesting to monitor how the two divergent strategies from these three long-term combatants in the mobile-phone memory market will play out.