RON MALTIEL comment re NAND FLASH MEMORY and SPANSION article
in response to
by
Message: My buy today
Spansion's Chapter 11 Signals the Erosion of the Flash Memory Market
The following is excerpted from an article by Scott M. Fulton, III appearing today, March 2, 2009, at betanews:
The company that was at one time the world's principal provider of NOR flash memory -- the more non-volatile variety -- had its own plans to go "asset light," to use a now familiar phrase, and to concentrate on licensing its intellectual property to companies with the muscle to do the heavy lifting. It sounds like a plan AMD just executed last month. As it turns out, Spansion had also been planning to license others to produce its designs.
Whether that remains the plan after a few months' time is now completely unknown. This morning, the company's Sunnyvale-based American arm announced it was filing for Chapter 11 bankruptcy protection, a month after its Japanese division applied for similar protection there.
For "asset-light" companies that create more than they produce to become profitable, they have to win something, typically in court. Last November, Spansion mounted an aggressive defense of its IP, which included suing global flash leader Samsung for patent infringement. Spansion is asking the US International Trade Commission to bar the import of Samsung memory that uses multiple-bit-per-cell technology, in a demonstration that it could do the same for others down the road (Toshiba immediately springs to mind).
But it takes years to achieve victory in the courtroom, and in the meantime, the world's glut of NAND flash memory is putting competitive pressures even on NOR suppliers like Spansion. The company's other IP crown jewel is something called ORNAND, a NAND/NOR hybrid that offers many of NOR's benefits in a form factor that would normally be attractive to small component manufacturers, such as handset and automotve electronics. But it's not a normal market, and as Objective Analysis' Jim Handy writes, in this market, ORNAND isn't very handy for Spansion to have around.
So rather than sell the manufacturing facilities it still has to keep the company afloat, Handy suggests that Spansion consider "un-lightening" itself -- selling off some of its intellectual property that it can't really use in the current market anyway, clearly indicating ORNAND as one candidate. Handy's suggestion came as the company's restructuring had just begun, with the resignation of then-president and CEO Bertrand Cambou.
The following is excerpted from an article by Scott M. Fulton, III appearing today, March 2, 2009, at betanews:
The company that was at one time the world's principal provider of NOR flash memory -- the more non-volatile variety -- had its own plans to go "asset light," to use a now familiar phrase, and to concentrate on licensing its intellectual property to companies with the muscle to do the heavy lifting. It sounds like a plan AMD just executed last month. As it turns out, Spansion had also been planning to license others to produce its designs.
Whether that remains the plan after a few months' time is now completely unknown. This morning, the company's Sunnyvale-based American arm announced it was filing for Chapter 11 bankruptcy protection, a month after its Japanese division applied for similar protection there.
For "asset-light" companies that create more than they produce to become profitable, they have to win something, typically in court. Last November, Spansion mounted an aggressive defense of its IP, which included suing global flash leader Samsung for patent infringement. Spansion is asking the US International Trade Commission to bar the import of Samsung memory that uses multiple-bit-per-cell technology, in a demonstration that it could do the same for others down the road (Toshiba immediately springs to mind).
But it takes years to achieve victory in the courtroom, and in the meantime, the world's glut of NAND flash memory is putting competitive pressures even on NOR suppliers like Spansion. The company's other IP crown jewel is something called ORNAND, a NAND/NOR hybrid that offers many of NOR's benefits in a form factor that would normally be attractive to small component manufacturers, such as handset and automotve electronics. But it's not a normal market, and as Objective Analysis' Jim Handy writes, in this market, ORNAND isn't very handy for Spansion to have around.
So rather than sell the manufacturing facilities it still has to keep the company afloat, Handy suggests that Spansion consider "un-lightening" itself -- selling off some of its intellectual property that it can't really use in the current market anyway, clearly indicating ORNAND as one candidate. Handy's suggestion came as the company's restructuring had just begun, with the resignation of then-president and CEO Bertrand Cambou.
COMMENts;
I believe many articles about Spansion’s Chapter 11 are missing the point of the real reason for the failure of Spansion. The key reason is that in the non volatitle market the NOR is on a shrinking growth rate pace compared to NAND’s accelerating growth rate. As a result, the semiconductor companies that focused on NAND have been growing faster and have been more profitable than the ones that focused on NOR. The current global economic upheaval is just accelerating this trend.
This phenomena is mainly due to NOR’s higher cost and smaller memory size relative to NAND at every semiconductor technology node. A similar development took place in the SRAM and DRAM memory market in the past. SRAM and DRAM unit volume used to be equal in size, but as a result of DRAM being cheaper with a larger memory size, its current market size is about 10X the size of SRAM memory (even though SRAM is faster).
This growth trend in the volume of products and applications that use NAND and not NOR has been accelerating for several years. For example see the trouble that Intel had in selling NOR memories from May 2007. Additional information can be found at
I believe many articles about Spansion’s Chapter 11 are missing the point of the real reason for the failure of Spansion. The key reason is that in the non volatitle market the NOR is on a shrinking growth rate pace compared to NAND’s accelerating growth rate. As a result, the semiconductor companies that focused on NAND have been growing faster and have been more profitable than the ones that focused on NOR. The current global economic upheaval is just accelerating this trend.
This phenomena is mainly due to NOR’s higher cost and smaller memory size relative to NAND at every semiconductor technology node. A similar development took place in the SRAM and DRAM memory market in the past. SRAM and DRAM unit volume used to be equal in size, but as a result of DRAM being cheaper with a larger memory size, its current market size is about 10X the size of SRAM memory (even though SRAM is faster).
This growth trend in the volume of products and applications that use NAND and not NOR has been accelerating for several years. For example see the trouble that Intel had in selling NOR memories from May 2007. Additional information can be found at
http://www.maltiel-consulting.com/NOR_vs_NAND_market_maltiel_semiconductor.htm">www.maltiel-consulting.com/NOR_vs_NAND_market_maltiel_semiconductor.htm
Ron Maltiel
RMG & Associates
Ron Maltiel
RMG & Associates
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