Do you assume the market for cellular phones, digital audio (MP3) players, consumer solid state drives (SSDs), portable media gamers, digital camera, GENERAL PRACTITIONER gadgets, multimedia and music mobile phones, flash memory card and also USB flash drives are growing? All these items gave a disruptive placement removing market share from their predecessors.
One market segment that might see even stronger development compared to these separate products we mentioned, and consist of other development products, is the flash memory market. Flash is an origin part utilized in all the above items and even more.
Based upon background we are forecasting that flash is the memory tool of choice for a plethora of gadgets in the consumer electronic devices in cordless tools and that flash will expand faster than the wireless create market. It appears that in the past, memory for calculating gadgets has actually expanded faster compared to the gadget that makes use of the memory. Memory of the Computer (PC) as well as the Web has grown faster than their supporting platform. With the COMPUTER creating incredible growth and also history as our guide the demand for both memory and disc drives for the desktop computer was often the motivation of lots of upgrade cycles. The Net with the many numerous new websites produced a tremendous growth in storage space. I have actually seen in many records that forecasted storage space of the internet has been just one of the fastest growing parts of the web all at once.
With a reduction in rate per gigabyte (GB) of greater than 80 percent over the past 3 years as well as with the high development in wireless information the requirement for brand-new as well as addition memory could go beyond the growth of the hardware device market that uses flash for its memory. The existing market in flash memory is about $25 billion annually and its projection is about 40 billion by 2010.
With each brand-new item cycle the advantages of flash have become extra turbulent permitting it to become about 30-40% less expensive yearly. Several experts are anticipating this turbulent contour to change the disc drive market for PC’s. Flash has actually currently replaced hard drives in most MP3 players.
Currently the flash memory is developed to support 2 types of flash memory. One type of memory supports your devices inner usage or running system, the other type is for even more exterior storage demands. The internal memory usually makes use of the design of NOR, which has actually been established for years and also Intel (NASDAQ: INTC) thought about by several as the marketplace leader. The NOR innovation is an extra intricate modern technology and is beginning to see the market mature.
Frequently you will certainly locate both NOR and NAND in the very same mobile phone.
The much faster growing market is for exterior memory market needs or NAND and the one of the leaders is SanDisk. SanDisk Corp. (NASDAQ: SNDK), founded and managed by head of state and also Chief Executive Officer Dr. Eli Harari. SanDisk and Toshiba collectively introduced the multi-level cell (MLC). This innovation made it feasible to split the cell and also store two bits of data on the exact same item of silicon (x2, as it were), which significantly boosted the productivity of producers as well as fabs, generally increasing the price performance contour.
This process has actually come to be the leader as well as permitted NAND MLC to become disruptive to the predecessor NOR style and also in 18 months penetration has actually been so wonderful that MLC is coming to be dominate force in flash.
The firm we believe has a distinct setting and also leads the NROM technique in the flash memory market is an Israeli based company called Saifun (NASDAQ: SFUN).
Saifun is an intellectual properties firm which its revenues can be found in three types: licenses, nobilities as well as support. This sort of model has been very successes for our design portfolios in the past. The 3 previous companies that had core business from copyright we investment into our portfolio’s were Qualcomm (NASDAQ: QCOM) in1997 at 3.31 per share as well as still holds a position. Arm Holdings (NASDAQ: ARMHY) in 9/29/1999 @ 9.60 as well as holds half a placement as well as Rambus (NASDAQ: RMBS) in 1998 which appreciated regarding 350% in 2000 and also we offered the setting in the version portfolio when Intel quit supporting the Rambus architecture late and 2000 as well as in 2001.
Despite the fact that it is extremely early is Saifun openly traded background we are delighted by its new kind of flash memory style, it shows up that Saifun’s technique has numerous benefits over the a lot more well established NAND and specifically NOR. The single most important part is their technology contour. They have the ability to increase the bits each cell allowing for a 2nd compounding curve. The other style they are striving on is to diminish their dimension and also boost density, however we believe that Saifun with its less complex model must accomplish a smaller die than the others yet the actual advantages with Saifun is the capacity to allow 4 littles memory in every item of silicon (x4). Doubling once again the occasions of MLC while at the same time reducing their dimension hence potentially leading the brand-new flash style. Another benefit is NROM’s capability to function both as an os and also memory part being able to supply both markets that separately NOR and/or NAND has target.
A second firm has actually just announced that in 2007 they will certainly start creating a 4 little bit cell in NAND. The business making this announcement is M-Systems (NASDAQ: FLSH). They claim they will certainly have an item on the market time in 2007. Although they have actually achieved this remarkable innovation we believe that because they use the entire cell as opposed to a fraction of the cell for this increasing process, the whole cell’s capability to double again might come to be geometrically tougher. On the last review M-Systems has not clarified their service design to (make at own fabs or licenses) and also delayed the second offering.
It is has actually been our point of view that business that create successful aristocracy designs resemble seamless gutters and also the fab companies have the appearance like tiles when looking at a roof covering. When it rainfalls the rain gutter can create a more powerful stream obtaining income and also attain a much higher degree of success. The delay of M-Systems secondary offing might reduce the opportunity of more fab advancements.
Regardless this looks like a marathon race and because this is such a huge market it will be about a $40 billion market when quad flash is commonly readily available, that implies that any one of the leading 3 or 4 must benefit.
Saifun currently completes incredibly well with NOR however early 2007 when it doubles the variety of bits from 2 little bits to 4 each cell it must have the ability to reveal benefits over MCL NAND currently the cost performance leader. Saifun has a possibility of repeating the exact same action that, in our viewpoint, allowed SanDisk to lead the last cycle.
There are numerous brand-new innovations looking to change flash however now there are a few that are close to achieving mainstream quantities. You must recognize the Saifun modern technology hibernated for about twenty years. This is typical, the Internet nurtured for regarding Thirty Years as well as electrical power for 100 years. New innovations commonly hibernate longer compared to people anticipate, and then it appears that they usually practically take off onto the seen extremely swiftly.
Although Saifun’s approach is about 20 years old, the innovation they have simply started to attain is industrial feasibility.
Real advantage is since they just make use of factors in the cell versus in the more convention method such as NOR or NAND that utilizes the whole cell. This less complex use allows for greater data retention and supplies a much faster response time, and hopefully much more density, and much less power.
This is an incredible benefit having 4 times the little bits in affordable cells. Saifun also believe future that future cells could increase to possible to 8 or perhaps 16 little bits each silicon.
Saifun only has a handful of clients, if they loose Infineon Technologies (NYSE: IFX) Saifun biggest customer, they would certainly affect their company significantly. On a side note, it looks like it will get UMC from Taiwan.
Saifun has primarily authorized lots of huge suppliers like Sony (NYSE: sne) as well as Spansion (NASDAQ: SPSN) a spin off Advanced Micro Gadget (NYSE: AMD)/ Fujitsu (pink sheets) these based solely on the flash market are tiny on the market, since the manufacturing quantity is tiny this could make it more challenging to be designed into leading quantity products.
Even though our team believe NROM offers a less complex cell structure with a number of layers, we believe it will be easy gradually to minimize or move to a smaller sized form element, but this has actually not been finished in high volume production. If and/or until they can complete in a smaller sized form factor this company will be, based on system size, go to a considerable negative aspect. Specialists believe in 2007 this negative aspect ought to be at most very little and also Saifun relies on late cycles this will certainly be come a true benefit.
To sum up
1) If IM Flash remains to lead the flash market with even more little bits per cell with NROM flash architecture.
2) If IM Flash if attains the projecting of smaller die compared to equivalent flash.
If IM Flash achieve either of these goals it can end up being a design leader in the Visit IM Flash flash memory market. If they have the ability to achieve both they would certainly achieve a genuine design management placement.