Intel, Micron to Mass Produce 34nm Memory Chips

Intel and Micron are teaming up to take on Samsung and Toshiba in the battle for NAND flash memory, used for multimedia storage on consumer products such as iPods and digital cameras. But when falling consumer confidence is taking its toll on the flash memory market, is this the right time for Intel and Micron to invest?

A joint venture between Intel and memory maker Micron Technology has begun production on a 34nm NAND flash memory disk. The venture, called IM Flash Technologies, should heighten competition with Toshiba and Samsung Electronics, the world's largest NAND flash memory chip maker.

NAND flash memory is commonly used for multimedia storage on portable media players. The 34nm, 32 Gb chips are manufactured on 300 mm wafers. Measuring less than the size of a thumbnail, the chip enables high-density solid-state storage in small form factor applications, including digital cameras, iPods and digital camcorders. “The tiny 34nm, 32 Gb chip enables our customers to easily increase their NAND storage capacity for a number of consumer and computing products,” Micron Memory Group’s vice president Brian Shirley said in a statement.

“The creation of this new company supports Intel’s intent to maintain its industry-leading position in nonvolatile memory and enables us to rapidly enter a fast-growing portion of the flash market segment,” Intel’s president and CEO Paul Otellini said in a statement. Despite Otellini’s statement, a recent report by market research firm iSuppli found the NAND flash market is feeling the effects of a weakened global economy, and will cause revenue declines in 2008. A slim rise in revenue over 2007’s $13.9 billion intake is expected, though the report was released before the worsening of the financial crisis this fall. Worldwide, iSuppli projects NAND flash revenue will decline 14 percent in 2008 and fall another 15 percent in 2009.

Intel and Micron also announced that they have each entered into separate long-term agreements to supply Apple with a significant portion of each of their share of IM Flash Technologies’ NAND flash memory output. As part of these agreements, Apple would prepay $250 million each to Intel and Micron. “We are extremely pleased to have Apple broaden its relationship with us,” Otellini said.

The companies also released information on the venture’s management team, which will be led by Intel’s Dave Baglee, who previously served as manager of Intel’s Fab 11 in New Mexico, and Micron’s Rod Morgan, who most recently served as manager of Micron’s fabrication facility in Manassas, Va.

Both companies said they also plan to begin sampling lower density multi-level cell (MLC) and single-level cell (SLC) products using the 34nm process technology in early 2009.