LEHI, Utah -- During a recent event here, the new chief of Intel Corp.'s NAND group outlined the company's strategy and revealed a surprise: The chip giant hopes to be the technology and solid-state storage (SSD) leader, but it is not seeking to be the top player in the discrete market.
Intel wants to avoid the cyclical, market share game in the NAND flash chip sector against the likes of Samsung, Hynix and Toshiba. But Intel dropped hints it wants to unseat Samsung as the No. 1 player in SSDs.
What's surprising about its discrete chip strategy is Intel generally aspires to be No. 1 in a given market, such as processors and chipsets. Generally, if Intel lags in a market, it exits the sector. For example, Intel has exited the ASIC market, communication ICs, NOR flash, branded PCs, supercomputers and other sectors for one reason or another over the years.
SSD is a different story. In fact, Intel this year plans to ship a line of SSDs, based on a new family of 25-nm parts made by the company's venture with Micron Technology Inc., said Tom Rampone, the new vice president and general manager of Intel's NAND Solutions Group.
"We want to be a leader in SSDs,'' he told EE Times at the event here. In 2010, ''we want to bring SSDs out of the niche markets and into the mainstream.''
Over the years, though, Intel has experienced some ups and downs in flash. The company is said to have introduced the first commercial NOR type flash chip in 1988. Although it became the process and market share leader in NOR, the company generally lost money in the business. In NOR, there were (and still are) too many players in a declining market.
Several years ago, Advanced Micro Devices Inc. and Fujitsu Ltd. saw the light and spun out their NOR venture into a company called Spansion. More recently, Intel jettisoned its NOR unit. That business was combined with STMicroelectronics Inc.'s flash unit to form what is now Numonyx NV.
NAND playing field
Intel did not give up in flash, however. In 2006, Micron and Intel came together to form a new NAND fab venture company: IM Flash Technologies LLC (IMFT). The first IM Flash fab, a 300-mm plant, is located in Lehi. Under the terms, Micron obtains 51 percent of the output from the fab, while Intel gains the remaining share.
The $2 billion fab itself is a four-level structure with about 200,000-square-foot of clean room space. There are 1,500 employees at IM Flash, who work four shifts in a 24-hour period. "From a technology perspective, I'd put this fab against anyone else in the world,'' said Dave Baglee, IMFT's co-executive officer, in an interview at the event.
Micron itself entered the NAND business with a 90-nm device, followed by a 72-nm part. Those products were a generation or two behind the competition, namely Samsung Electronics Co. Ltd. and Toshiba Corp.
IM Flash itself started production with a 50-nm process in 2006, followed by a 34-nm process in 2008. With 34-nm, Micron and Intel managed to surpass the competition in process technology, said Brian Shirley, vice president of Micron's memory group.
As reported, Intel and Micron this week regained the process technology lead in NAND flash, by rolling out the first in a family of 25-nm devices. The first 25-nm NAND device is a multi-level-cell (MLC), 8-GB device, which is said to reduce IC count by 50 percent over previous products.
With the device, Intel-Micron duo will retake the NAND process lead over the SanDisk-Toshiba duo and Samsung, which have recently announced 32-nm and 30-nm products, respectively. Another player, Hynix Semiconductor Inc., has a 26-nm device waiting in the wings.
Intel and Micron will initially ramp the 25-nm NAND device at IM Flash, followed by production within Micron's fab in Manassas, Va. Still to be seen, however, is when IM Flash will restart its delayed NAND fab in Singapore. Some analysts say that fab will ramp in 2011.
With today's 25-nm process, the companies are extending their process leadership, said Intel's Rampone. Previously, Rampone had been the general manager of Intel's Channel Platform group in China. He replaced Randy Wilhelm, who recently retired.
With 25-nm, the Intel-Micron duo have ''almost a year lead on the competition,'' said Michael Yang, senior analyst of memory and storage for iSuppli Corp. The 25-nm part from the Intel-Micron duo is indeed ''industry leading,'' said Alan Niebel, president of Web-Feet Research. In 2010,
Hynix is supposed to have a 26-nm part. The SanDisk-Toshiba duo are expected to roll out a 2x-nm NAND device, Niebel added.
Samsung is still leading in NAND flash in share, but Toshiba is gaining ground, according to the new third-quarter rankings from iSuppli Corp. In the NAND rankings, Hynix was third, followed by Micron, Intel and Numonyx.
The real head scratcher is Intel, which continues to trail in the rankings. This begs a question: Just how long will Intel hang on in NAND?
Intel: NAND or bust?
In NOR, Intel made several mistakes, including ongoing moves to gain share at the cost of profits. In NAND, it appears that Intel is avoiding past mistakes and is not interested in gaining share for share's sake.
In other words, Intel is not going after Samsung and Toshiba for share, Rampone said. ''We do view NAND as a growth business,'' he told EE Times. NAND ''is not strategically important to be No. 1 (in terms of market share.) Our focus is on technology. Technology leadership is our focus.''
''They don't want to be No. 1. They want to make money,'' said Joseph Unsworth, an analyst at Gartner Inc.
Intel and Micron ''made it very clear that they do not plan to drive prices down to follow cost. Instead, we can expect for Micron and Intel to continue to charge market prices and simply pocket larger margins than can their competition,'' said Jim Handy, an analyst with Objective Analysis.
This is not to say Intel is happy to lag in NAND. On the contrary, Intel wants to be No. 1 in SSDs, Rampone said. In SSDs, Intel claims to be the top player in the U.S. retail market and No. 2 worldwide. Samsung is the top vendor worldwide in SSDs, a market that is expected to grow from 1 million units in 2009, to 3-to-5 million in 2010, according to Intel.
At last count, there are 77 vendors in SSDs. Most are smaller players with little or no internal technology. Many buy the flash parts, controllers and other components from outside vendors.
Intel, Micron, Samsung and SanDisk-Toshiba are vertically integrated SSD vendors. They have their own NAND fabs and also have their own controller technologies. This in turn may give these vendors an advantage in the marketplace.
But until now, SSDs have been a niche product. Some high-end notebook PCs and netbooks have SSDs. The problem with SSDs is cost, and, in some cases, reliability, as compared to conventional hard disk drives (HHDs).
The idea is to bring SSDs ''beyond the niche markets,'' Rampone said. ''In 2010, we see a lot of momentum for SSDs.''
The key for Intel and Micron in SSDs is the 25-nm NAND part. ''Both companies are currently sampling to select customers and controller makers. Both also remarked that this was one further step that would help bring SSDs into the mainstream,'' said Handy of Objective Analysis.
''At a die size of 167-mm a 300-mm fab should be able to manufacture just over 400 dice per wafer,'' said Handy in a report. ''This gives a manufacturing cost of about $4.00 per chip, or $0.50/GB. Compare this to a more common 45-nm MLC NAND on a 300-mm line which should cost about $1.75/GB. Since the price of NAND flash has been hovering around $2.00/GB for the past year, and seems poised to continue at that price through 2010, the 25-nm process will give the companies a significant margin boost over their current 34-nm chip whose cost we estimate at $1.00/GB.''
The big question is clear: Will SSDs replace hard drives? One new SSD vendor, Seagate, ''argues that SSDs will not compete against HDDs but will expand the overall storage market,'' Handy pointed out.
''Although we agree that there is no reason for mainstream HDDs to be threatened by SSDs, Objective Analysis and several industry participants (OEMs as well as makers of both SSDs and HDDs) believe that the enterprise HDD market will decline as a combination of SSDs and capacity HDDs satisfies the need currently filled by enterprise HDDs. In short, it may not be too long before SSDs render enterprise HDDs obsolete,'' he said.
Over time, OEMs should also look for a major shakeout in SSDs, as more and more players enter the fray. Seagate, Western Digital and others, for example, are looking at the sector to protect their HDD bases.
''Since SSDs are destined to replace enterprise HDDs, it is extremely important that Seagate, manufacturer of over 60 percent of the world's enterprise HDDs, should participate in the SSD market. If Seagate were to ignore SSDs, then the enterprise market, a market that the company has dominated for 15 years, would slip through the company's fingers. Today Enterprise HDDs are the more profitable part of Seagate's business,'' Handy said in a recent report.
''Something that separates Seagate from other HDD makers is that the company has internally designed its own SSDs. Western Digital became an SSD manufacturer through the acquisition of SiliconSystems. Hitachi is entering the SSD market by adding enterprise-class interfaces to Intel's basic SSD design. Toshiba-Fujitsu manufactures and sells SSDs through the Toshiba's semiconductor group, but there appears to be little interaction between that business and Toshiba's HDD division,'' he said in a recent report