Day One, Numonyx Emerges As Number One in Mobile Memory

Published on: 1st April 2008

A new number-one supplier of memory chips for mobile handsets was born today with the announcement of Numonyx, but can this semiconductor spin-off find success in a business where no one has posted a profit in three years?

Created from the combined NOR-type flash business units of semiconductor giants Intel and STMicroelectronics, Numonyx begins its existence with an 26 percent share of global market revenue for all types of memory used in mobile phones, according to iSuppli. Numonyx plans to use its position in mobile phones to expand its role from NOR supplier to become a provider of comprehensive memory solutions for wireless handsets and other products.

The appears to be a shrewd move given the poor conditions in the NOR market lately. Worldwide NOR revenue declined by nearly 9.3 percent in 2007, capping a three-year period of weak growth or contraction - and zero profitability among suppliers. Revenue is expected to decline by nearly 2 percent in 2008.

"The NOR market has been devastated by plunging prices in recent years, spurred by intense competition and slowing demand growth in the key market for such memory: mobile handsets," said Mark DeVoss, senior analyst for iSuppli. "Because of this, Numonyx plans to broaden its focus, looking at new technologies, new types of parts beyond standalone NOR devices and new markets beyond the handset realm."

While Intel and STMicroelectronics produced NOR exclusively, Numonyx has established close ties with South Korean memory chipmaker Hynix Semiconductor Inc. to supply NAND flash and DRAM products. This will allow Numonyx to offer a wide range of mobile and embedded memory solutions to a broad base of applications, including mobile phones.

Numonyx's focus will be offering value-added products that combine two or more memory types in a single Multichip Package (MCP) package to mobile applications. Some of these MCP configurations will be suitable for placement directly atop the applications processors, making them suitable for space-constrained applications like mobile handsets.

Numonyx has development plans for a floating-gate flash manufacturing technology at the 32 nanometer geometry. This should provide a cost-effective memory manufacturing solution through the year 2012 or perhaps slightly longer.

However, Numonyx also is developing and has produced sample devices from a new technology called Phase Change Memory (PCM). PCM is being touted as the technological heir apparent to NOR-type flash memory for applications that have code-storage requirements.

"If PCM emerges as a cost effective non-volatile code-storage and execution medium with fast read and write capability - without the flash erase mode requirement similar to DRAM - it may usher in a new memory option where a single device is capable of replacing the existing combination of NOR and RAM, and perhaps some portion of NAND further in the future." DeVoss said.

Numonyx management asserts that since the initial announcement, it has consolidated R&D and design efforts by eliminating overlapping responsibilities and duplication of tasks formerly associated with its respective parent companies. At launch, Numonyx will have about 7,500 employees and company management says this is the right size to meet the market demand for competitive flash product solutions.

Numonyx will begin life well into volume production with 65 nanometer products, which gives it a manufacturing technology lead at the outset. However, competitive pressures from Spansion will mount at the 65 nanometer level for the balance of 2008.

Both Numonyx and Spansion are planning 45 nanometer production in 2009. To meet anticipated demand, Numonyx owns various 200 millimeter wafer fabrication and test and assembly plants located in China, Israel, Italy and Singapore as well as supply agreements in place with contract or foundry sources. This will allow Numonyx to access to an additional six 200mm fabs and three 300mm fabs if required.

"iSuppli expects the tough environment in NOR to continue but also believes that Numonyx will demonstrate the staying power to remain a top supplier of the memory for the foreseeable future," DeVoss said.

 

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