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Aizuwakamatsu, Japan -- Unfazed by overcapacity and pricing pressures in the tumultuous market for NOR flash memory, Spansion Inc. has begun limited production in the industry's first 300-mm NOR fab. During a kickoff event here last week, the world's largest NOR supplier provided a rare glimpse inside the fab.
The $1.2 billion plant, dubbed SP1, has begun making 65-nm NOR devices, with 45-nm products due out in late 2008. NOR is heating up at the 65-nm node as vendors ship a new class of 2- and 4-bit/cell system-level flash technologies.
With its 300-mm fab ramp, Spansion hopes to gain a manufacturing edge over its two main NOR rivals: Samsung Electronics Co. Ltd., which has stated its intention to take the NOR lead by the end of the decade, and a nascent joint venture, dubbed Numonyx, that will merge the NOR operations of Intel Corp. and STMicroelectronics Inc. Intel, ST and Samsung respectively ranked second, third and fourth in NOR market share in the first half, according to market watcher iSuppli Corp.
Spansion's new fab is part of its so-called triple-attack strategy, through which it plans to shave production costs, propel new products and extend its MirrorBit NOR technology "down to the 20-nm node," said Bertrand Cambou, president and CEO.
Such measures are in order as flash vendors confront a prolonged capacity glut and depressed average selling prices (ASPs) for NOR devices.
The proposed Numonyx venture is saddled with a slew of unsettling capacity, including three 200-mm fabs and two 300-mm plants. (One 300-mm fab, ST's former M6 plant in Catania, Italy, sits empty. The other 300-mm fab is part of a former STMicroelectrnoics NAND flash joint venture in China.)
Memory giant Samsung, meanwhile, has its sights set on becoming the world's largest NOR supplier by 2009 or 2010, and it could flood the market with NOR devices to get there.
"The NOR cycle remains challenging," Daniel Amir, an analyst with Lazard Capital Markets LLC (New York), stated in a recent report. "Spansion management has said that while handset demand remains solid, ASP pressure remains challenging as Intel/ST and Samsung continue to dump pricing."
NOR flash ASPs are expected to fall 15 percent sequentially in the third quarter from their second-quarter levels, Amir said. And according to Web-Feet Research Inc. (Monterey, Calif.), the NOR flash business is projected to hit $7.9 billion in revenues this year, down from $8.6 billion in 2006.
Spansion's Cambou said he's confident the NOR market has touched bottom in what has been a tough business cycle. The anemic ASPs seen in the first half "were abnormal," he said in an interview with EE Times after the press event to celebrate the fab's grand opening. "We don't believe this erosion is sustainable."
Going forward, Cambou said, strong drivers are emerging for NOR flash devices, including a new class of 3G cellular phones. (NOR flash memory is mainly used for code storage in cellular phones, PCs and industrial gear.)
One upside for Spansion may be the uncertainty surrounding the integration of Intel's and ST's NOR operations as Numonyx--a process that has yet to be finalized. Last month, Intel received a request for additional information from the Federal Trade Commission (FTC) in connection with the proposed flash-memory venture.
Amid that uncertainty, Cambou said, some existing customers of Intel and ST "have welcomed" Spansion as a potential NOR supplier. But Spansion has challenges of its own. Conceived as a joint venture between Advanced Micro Devices Inc. and Fujitsu Ltd., it has failed to earn a profit since its reorganization as an independent company in June 2003.
Meanwhile, questions abound about who is really leading the NOR race. Jim Handy, principal analyst with market research house Objective Analysis (Los Gatos, Calif.), said Spansion is "significantly" ahead of Numonyx in terms of ramping up NOR on 300-mm wafers. But he added, "I think they are on equal footing in process technology."
The dark horse is Samsung. The South Korean company is the leading supplier of DRAMs, SRAMs and NAND flash, and it has the potential to "steamroll everybody" in NOR if it is determined to do so, Handy said.
Flash-market dominance is purely a manufacturing contest, and "the low-cost producer always wins," James Doran, chief operating officer for Spansion, said at last week's event. Moving to gain a competitive edge, Spansion outlined its triple-attack strategy: Expand its core MirrorBit NOR product lines, scale its technology and manufacture the devices in volume.
Spansion has scaled MirrorBit, based on technology licensed from Saifun Semiconductors Ltd., much further than most had expected. Other licensees have struggled to bring Saifun's NROM-based technology to production, analysts said.
MirrorBit is said to double the intrinsic density of a flash-memory array by storing two physically distinct bits on opposite sides of a memory cell. Each bit within a cell serves as a binary unit of data that is mapped directly to the memory array.
Spansion also recently rolled out its MirrorBit Quad technology. While 2-bit/cell MirrorBit technology stores 1 bit per storage location, MirrorBit Quad stores 2 bits per location.
On the scaling front, Cambou predicted that traditional floating-gate technologies from Intel and others would soon hit a wall but that MirrorBit would prove scalable down to 20 nm. MirrorBit requires 40 percent fewer manufacturing steps than rival technologies, he said. To reduce test costs, he said, Spansion has deployed full built-in self-test. Each device on a wafer embeds BIST technology, enabling the company to test "the entire wafer at once," Cambou said.
Still to be seen is whether Spansion can move into production at the 65-nm node without a hitch. Rival Intel claims to be shipping 65-nm NOR devices based on multilevel-cell technology.
Spansion is attempting to ramp several products imultaneously at the 65-nm node, including MirrorBit, ORNAND and Eclipse. ORNAND is a NOR device that has a NAND interface. Eclipse combines MirrorBit, ORNAND and a quad-bit/cell memory technology on a single die.
With its three fabs, Spansion believes it has hit upon the right manufacturing formula. The SP1 fab is situated next to JV3, a 200-mm plant in Japan. JV3 is Spansion's primary producer of 110-nm MirrorBit chips. Fab 25, in Austin, Texas, manufactures MirrorBit products on a 90-nm process. The 200-mm fab will produce 65-nm parts by year's end.
Spansion also has a foundry agreement with Taiwan Semiconductor Manufacturing Co. Ltd. But the key for Spansion is SP1, an automated fab that will be ramped up in stages. Initially, SP1 will produce some 2,000 wafers per month. Total capacity for the first module is 15,000 to 20,000 wafers a month. When fully ramped, the fab could produce 30,000 to 40,000 wafers a month.
During the fab tour, the company noted it had purchased equipment from two lithography vendors: ASML Holding NV and Canon Inc. ASML's TwinScan processes the critical layers of Spansion's devices, while Canon gear handles the noncritical layers. ASML's tool is linked to a wafer track system from Tokyo Electron Ltd.
Spansion also installed one of Applied Materials' Quantum ion implanters. But Applied has since exited that business, prompting Spansion to procure machines from other, undisclosed vendors. A 193-nm immersion scanner from ASML is running at Spansion's Submicron Development Center in and will enable the flash vendor to develop devices at the 45-nm node, Cambou said. Spansion's NOR technology at the 45-nm process node, he said, will consist of only "four critical layers," reducing lithography costs. That achievement, he believes, will turn up the heat on the Intel-ST venture.
"They are not in a competitive position to fight us," Cambou said. |