Intel, Micron Make Smallest Flash Chip Yet

The dense new flash chip is expected to cause some waves in the oversupplied market.

Intel and Micron Technology May 29 announced that their joint venture R&D project will skip the "4x" generation of process technologies for their NAND flash development and will jump from 52 to 34 nanometers.
The two companies will use this technology to produce a 32-gigabit (throughput), 4GB-capacity flash chip that can fit in a standard TSOP (thin small-outline package). Flash chips are commonly used in MP3 players, cell phones, and handheld devices of all kinds.
It is the smallest flash process geometry on the market. The 32G-bit chip is the only monolithic device at this density that fits into a standard 48-lead TSOP, providing a cost-effective path to higher densities in existing applications.
Shipments of customer samples begin in June and mass production is expected during the second half of this calendar year, an Intel spokesperson said.
The chip is currently sampling to select customers and controller makers, the spokesperson said.
Intel and Micron entered the market with 72-nm chips in 2006; at the time, they said they believed they were about two years behind competing chip makers Samsung and Hitachi. Both companies now contend that with this new development, they have surpassed the competition, the spokesperson said.

New Product Is Gamble in an Oversupplied Market

What does this mean to the NAND flash market?
"The market is oversupplied; there is no question about that," Jim Handy, an analyst with Objective Analysis, told eWEEK via e-mail.
"At the onset of an oversupply, prices collapse to cost, then follow the cost until the market returns to a shortage. We expect today's oversupply to continue through 2008," Handy said.
This does not mean that prices will follow the cost of the IMFT device, Handy said.
"At a die size [they are using], the price of a 32Gb chip will be just shy of $4, which works out to about 99 cents/GB. The companies will be the first to break the $1/GB barrier with this product," Handy said.
Today's NAND prices are hovering near $2.50 per gigabyte, Handy said.
"With a 99 cents/GB price, the new IMFT chip can be expected to reap impressive margins as long as NAND prices stay above their competitors' costs," he said.
On the other hand, Handy said, a shift to 34 nm could cause the NAND market to continue to be oversupplied for perhaps longer than Objective Analysis' December 2007 projection of the middle of 2009. Such a move might cause an oversupply to last an additional quarter.
"All in all, we see this move as one that will perhaps lengthen today's oversupply while allowing the new NAND competitors-Micron and Intel-to either profit during these difficult times, or at least to suffer smaller losses than will other suppliers," Handy said.

Chris Preimesberger

Chris J. Preimesberger

Chris J. Preimesberger is Editor-in-Chief of eWEEK and responsible for all the publication's coverage. In his 15 years and more than 4,000 articles at eWEEK, he has distinguished himself in reporting...