A New NAND Flash Player Emerges?

The U.S. Bankruptcy Court for the District of Delaware approved an agreement by Spansion’s debtors to transfer its Milan development facilities to Elpida Memory. Details of the agreement are unclear at the moment, however, Spansion will apparently retain IP rights for the technology developed at the research center.

Spansion established its Security and Advanced Technology Division (SATD) in 2007 and staffed it with ex-STMicroelectronics NAND flash engineers including division head, Carla Golla who prior to joining Spansion was the general manager of ST’s NAND Flash and Storage Media product group.

The division’s mission is to develop secure products such as the MirrorBit HD-SIM product family and ORNAND2. ORNAND2 - unlike ORNAND which is a Mirrorbit with a NAND interface – is a true NAND architecture based on SONOS technology. Spansion needed a NAND device for its MCPs and ORNAND2 was the solution which allowed Spansion to utilize its charge trap flash knowhow and sidestep IP issues related to floating gate devices. SATD was responsible for product design for ORNAND2 and the process technology was developed in the U.S.

Spansion had planned to ramp ORNAND2 into production in the second half of 2009 on 43nm with foundry partner SMIC. Needless to say, those plans were derailed with Spansion’s Chapter 11 filing.

Elpida has been a supplier of mobile DRAM to Spansion and has lost a major customer as Spansion exits the wireless market. In addition, Elpida is the only tier 1 DRAM company without NAND flash in its product portfolio. Being a second tier supplier of DRAM KGD (known good die) to NOR flash suppliers is an unenviable position. Elpida needs to capture more of the value-added and capitalize on the shift from NOR flash to NAND flash in the cellphone market.

Elpida’s newly acquired asset will allow it to do just that by leveraging SATD’s development of 1Gb-4Gb SLC NAND to offer NAND/DRAM MCP solutions. Whether the device will be SONOS or floating gate-based is not certain, however the fact that Spansion will retain partial IP ownership of SATD developments suggests at some sort of cooperation utilizing Spansion’s SONOS technology. This initial foray into low density SLC NAND may just portend even greater ambitions in the high density data storage market.

NAND Flash Memory - Enabling Mobility

Here's my presentation from the IDEMA Diskcon U.S.A. conference.

"NAND Flash Memory: Enabling Mobility"
Gregory Wong, Forward Insights
September 23, 2009
http://www.forward-insights.com/present/Wong-Diskcon_0909.pdf

Flash Memory Summit Presentation

My presentation "NAND Flash Memory Trends" at the Flash Memory Summit has been uploaded.

http://www.forward-insights.com/present/NAND%20Flash%20Memory%20Trends.pdf

A YouTube video of the presentation may be accessed at the following link.

http://www.youtube.com/watch?v=Kh02erRVna4

Samsung and Numonyx Drive PCM Adoption

Samsung and Numonyx today announced that they will jointly develop common specifications for phase change memory (PCM). Common specifications are necessary to drive the adoption of PCM, particularly since OEMs do not want to be beholden to one supplier. The development of common specifications is analogous to what Intel and ST did in NOR flash starting with the 90nm NOR flash generation and resulted in Intel and ST being dual sourced at major OEMs.

The bit alterability of PCM make it attractive in simplifying firmware and reducing system overhead, however, adoption of PCM will likely be limited until costs approach that of flash memories. With a 45nm 1Gb PCM chip scheduled for production for the end of 2009, Numonyx will be closing the gap with NOR flash, however it'll take much longer for a new memory technology to break out of its niche status, if at all. Just take a look at where FRAM and MRAM are today.

This colloboration is the right step to facilitate the development of the infrastructure supporting PCM. Samsung's backing is a validation of the technology and also provides OEMs the confidence to commit themselves to this emerging memory technology.

Samsung and Toshiba Extend Patent Cross-licensing Agreement

Samsung and Toshiba have decided to extend their semiconductor patent cross-licensing agreement which ran from September 2002 to March 2009. No timetable was given for the new agreement but it is estimated that it will run for seven years, the same timeframe for the earlier announced Samsung-SanDisk patent cross license agreement.

As the inventor of NAND flash memory, Toshiba has the largest portfolio of NAND flash memory patents with a couple thousand patents. Despite being the No. 2 NAND flash memory supplier, Toshiba has been at the forefront of introducing new process technologies. Its super self-aligned STI process introduced in its 90nm NAND flash products were copied by other vendors in their 70nm and 60nm processes. The company was also the first to introduce new materials for the wordline and bitline in its 56nm process, the same materials which were incorporated into Samsung's 42nm process. And the company also led the transition to 64-cell NAND strings.

By signing these agreements with Toshiba and SanDisk, Samsung continues to have access to important NAND flash process technology as well as multi-level cell flash memory design IP relevant for future NAND flash generations.

SandForce Unveils Revolutionary SSD Controller

SandForce has emerged from stealth mode and unveiled a SSD controller for enterprise and mobile applications. Key features of the SF-1000 controller include:

- Dramatically higher endurance (80x) due to extremely low write amplification – significantly lower than the WA of current SSD vendors.
- Symmetrical read/write 30k IOPS and 250MB/s sequential
- 5 year drive life with no daily write limitation for MLC SSD
- No degradation in the performance as the drive fills up
- No need for external RAM or over-provisioning thereby reducing system costs
- ECC engine and RAID configuration of flash devices provides unrecoverable BER of 10E17

Existing solutions trade performance, reliability and endurance at the expense of additional cost. SandForce's DuraClass technology offers better performance, endurance and reliability at a lower system cost and paves the way for use of MLC NAND in a tiered storage hierarchy in enterprise systems. If SandForce is able to deliver on its promises, it is a truly revolutionary technology which will help drive the adoption of SSDs in both enterprise and mobile environments.

WD Buys its Way into SSDs

Western Digital Corp., the 2nd largest HDD maker, announced that it had acquired SiliconSystems, Inc. for $65 million in cash. SiliconSystems is a major supplier of embedded SSDs to the network-communications, industrial, embedded-computing, medical, military and aerospace markets.

WD is no stranger to SSDs having dabbled in the technology in the early 1990's and being a founding investor of SanDisk which also developed flash-based SSDs in the same time period. However, it appears that early experience wasn't enough for a latecomer to catch up to the vast improvements in performance and reliability made by SSD vendors recently. System-level solutions particulary on the firmware side are required to manage the increasing complexities of NAND flash with each new technology generation.

WD is now able to leverage SiliconSystems' knowhow and IP to accelerate its development of SSD computing solutions. This knowhow combined with WD's branding and client relationships could make WD a formidable SSD vendor and validates the market opportunity provided by SSDs.

This acquisition will compel HDD suppliers to review their own internal development plans and may be the first with others to follow.

The First Domino Falls

After failing to secure a 325 million Euro rescue package from the German state of Saxony, Portugal's CGD Bank and parent Infineon, Qimonda today filed for bankruptcy. At the current cash burn, the package would have kept Qimonda afloat for another two quarters. Qimonda plans to continue as an ongoing concern under the auspices of bankruptcy protection, although how it plans to do so is unclear. Suppliers and business partners are likely to ask for cash upfront in any business dealings with the company, In addition, the company will need to make investments in its innovative Buried Wordline (BWL) technology to remain competitive on the technology front. It is estimated that over half a billion dollars will be required for the transition to 46nm BWL.


Now that the first domino has fallen the question is: Who's next? Spansion has delayed interest payments due January 15 on its outstanding 11.25% Senior Notes. The company has a 30-day grace period to rectify the situation and at the same time, has retained Barclays Capital to explore "strategic alternatives" including merger or selling of assets. With the meltdown in electronics demand in Q4/08 and uncertain economic environment, Spansion is going to have a difficult time of closing any "strategic alternatives". It is highly likely the company will file for Chapter 11 before the 30-day grace period is up which would be the 2nd week of February.

Taiwanese DRAM manufacturer ProMOS is another potential domino. With the DRAM prices falling below cash costs, ProMOS cut is fab capacity utilization to low double digit percentage to conserve cash. The company has also resorted to asset sales having sold NT$1.9 billion (US$56.5 million) worth of wafer test equipment to Powertech Technology, NT$580 million (US$17.2 million) 300mm front end wafer fab equipment to TSMC and US$15 million in land to Kingston.

With ProMOS' share price at NT$1.51 prior to the start of the lunar new year, well below the NT$14.7 conversion price, ProMOS faces the prospect of redeeming a $330 million Euro convertible bond due February 14. Having only about NT$5.4 billion cash (US$160 million), ProMOS has applied for a bailout package from the Taiwan government, however the government is promoting industry consolidation and indigenous technology development as the condition for any support making any carte blanche bailout unlikely. An alternative is for creditor banks to swap their ECB holdings to ProMOS shares or to extend the redemption deadline. If these efforts fail, then ProMOS' fate may depend on the rumored Elpida-Powerchip-Rexchip-ProMOS merger. If the consolidation proposal meets the indigenous technology requirements, ProMOS may find a new life under a larger entity. ProMOS will have only two weeks after the lunar new year to find out.

Fujitsu Next

Intel Corporation and Hitachi Global Storage Technologies announced that they will jointly develop Serial Attached SCSI (SAS) and Fibre Channel (FC) enterprise class solid-state drives (SSDs) for servers, workstations and storage systems. This is an exclusive agreement to develop and deliver SAS and FC enterprise SSDs with availability of the first products in early 2010.

This is a complementary partnership marrying Hitachi GST’s drive, channel and system knowledge together with Intel’s NAND flash and flash management expertise. Hitachi selected a strong NAND flash partner that doesn’t compete with it in its core HDD business. Now that two of the three enterprise HDD makers, Seagate and Hitachi, have publicly announced plans for enterprise SSDs, Fujitsu will be compelled to react, especially with its 23% enterprise HDD market share to protect.

Seagate may feel it is big enough to source the NAND flash and develop the SSDs on its own however, Fujitsu may need to develop a partnership with a NAND flash vendor. Two possible candidates: Micron and Hynix - NAND flash vendors with SSD ambitions but no competing HDD businesses. Micron has flash management expertise acquired through its own SSD development and leading cost structure based on 34nm technology. On the other hand, Hynix is lagging on both the SSD and NAND flash technology front.

If rumors of Western Digital acquiring Fujitsu's HDD business are correct, a company that has sat on the sidelines as companies have rushed into the SSD market will have to finally step up to the plate.

Spansion Becoming an IP Company

Struggling to achieve profitability in its core business, Spansion has now turned to monetizing its portfolio of 3,000 patent and patent applications. Its first victim: Samsung. Spansion has filed two separate patent infringement claims against the company with the International Trade Commission and in the U.S. District Court in Delaware. Spansion is seeking an injunction in both cases on the sales of electronic devices containing Samsung flash memory and requesting treble damages in the Delaware claim for knowingly violating the patents.

Spansion is claiming Samsung infringed on 10 patents with four of them filed in the ITC complaint and six in the Delaware claim. The patents in question are related to NAND flash memory and include process patents describing methods of forming of the interpoly dielectric, shallow trench isolation as well as programming schemes. The patents, granted between 1998 and 2002, were filed by AMD, the pedigree of Spansion. AMD developed NAND technology and introduced a 64Mb UltraNAND on 0.25um technology in 1998. UltraNAND was supposed to do one better than NAND - 100% good blocks and 100k program/erase cycles without ECC - but it never took off and was subsequently shelved.

Why didn't Spansion instead go after Samsung, the No. 3 NOR vendor, with its much larger portfolio of floating gate NOR flash patents? Any successful claims against Samsung are likely to hurt more on the NAND side because of the size of Samsung's NAND business and the more diversified customer base. In addition, it's harder for Samsung to strike back because Spansion has no products based on floating gate NAND.

Spansion also claims to have the strongest portfolio of patents related to charge-trapping (CTF) technology which may be required to extend NAND flash below 30nm. However, it's not clear how applicable Mirrorbit patents are to SONOS NAND because the programming/erase mechanisms and gate stack are different. Spansion may be trying to plug that hole by commericalizing the first SONOS NAND - ORNAND2. In addition to satisfying its own demand for a NAND device in its MCPs, ORNAND2 is also a learning vehicle for developing CTF NAND IP. It'll be interesting to see what innovations Spansion introduces when ORNAND2 starts ramping in production the 2nd half of 2009 on 43nm.