Memory market headed South ...Will SSD's lead the recovery?

Evolution of 3D Market
Applications

Over the past year we have watched
CMOS image sensor (CIS) manufacturers follow the lead of Toshiba
and one after the other announce new packaging designs that offered
volumetric efficiency advancements  by incorporation of
TSV. [ see “…on
Mechanical Bulls, Rollercoasters and CIS with TSV”,
PFTLE, 9/26/2008 ] The initial announcements of TSV based
production ramps actually came last fall during a
significant downturn in the CIS market, the first decline
since the 2001 downturn. [ “Image
Sensor Market Set to Rebound”, EE Times 4/11/2008].

I, like most other prognosticators,
believe that memory will be the next application space to adopt 3D
Integration. Some marketing firms initially proposed FLASH would
come first,  but then retracted that prediction in favor of
DRAM, when it was clear that others did not agree. Memory leader
Samsung was showing prototypes of both TSV stacked FLASH and DRAM
in 2006, but no products or announcements have come since then. The
evolving recession that we will soon find ourselves in will most
assuredly hammer the entire memory market over the next few
years. This will offer a great excuse for why the inflated
2010 – 2015 market numbers, proposed by some in 2007, will
not come true. In fact something tells me we are about to see
some Olympic quality back peddling from those market gurus
!

I have openly expressed my opinion
that FLASH is so price sensitive, that there is just no way to
introduce 3D TSV technology into FLASH  until a very low price
point is reached, or at least  in sight. With FLASH
manufacturing prices dropping yearly (see later discussions) I do
see this happening, but not starting until 2012. My
commercialization timeline (pre recession) is shown in the figure
below and has not changed since I started writing these blogs.
Whether this time line gets pushed out or stays firm really depends
on whether TSV 3D drives the new product introductions that will
eventually pull us out of this downturn and whether evolving
markets like solid state drives (SSDs) which are
using available technology for their first generation products
try to use 3D TSV to get a performance / volumetric efficiency leg
up on their competition. History tells us that it will only take 1
company announcement, like Toshiba in the case of CIS, to cause the
others to move forward (remember – most are followers not
leaders !). The performance and volumetric efficiency
motivations for 3D integration are beyond question, yet we all know
that this won’t happen until the economics are right.

The likely road forward for the
 memory market does not look rosy. The worst enemy of the chip
industry is an economic slowdown. Semiconductors are pervasive in
discretionary consumer electronics (Cell phones, PCs ,cameras,
MP3 players etc. ) and the automotive sector which make up a
significant portion of total chip sales. Weakening consumer demand
will mean oversupply and excess capacity.

According to iSupply  DRAM
prices are falling  and they  don’t expect a recovery
till the second half of 2009. That’s bad news for DRAM producers
like Samsung, Elpida, Hynix, Micron and Qimonda many of which are
already bleeding red ink. As bad as DRAM is FLASH is worse. Here
are some recent “memorable” events (pun intended) :

In March Intel and
 STMicroelectronics combined their money-losing businesses in
memory and launched  Numonyx with a combined annual
revenue of ~ $3 billion. 

In March 2008 Elpida entered into a
partnership with UMC . The foundry venture will use Elpidas fabs in
Japan.

In May Intel and Micron announced a
joint venture to shrink their NAND technology from 52 to 34
nanometers.

In August of 2008 Hynix and Numonyx
signed a 5 year deal to produce  NAND flash memory for
high end  mobile phones , MP3 playuers and  SSDs
(solid state drives) [we’ll get back to these later] 
and enhance the mobile DRAM used in cell phones. Hynix had
posted its third consecutive loss of $700m for Q2.

Last week Micron reported that it
would l cut its global workforce by 15 percent over the next two
years due to a massive slowdown in demand for memory. The
oversupply and decrease in demand  has led to seven straight
quarters of losses at Micron.

Also last week, Samsung “the
big kahuna” reported that their memory business ( both DRAMs
and FLASH), “…remains challenging” .

We have seen reports that Infineon
is desperately trying to sell its stake in
sinking Qimonda. It is reported that they
 will most likely sell the DRAM operation to Micron or
Samsung.

NAND FLASH for SSDs

While many of the traditional NAND
markets are maturing, it is expected that the next NAND market
driver will be solid-state
drives (SSDs). It is likely that solid state drives ( SSDs)
will be a large future market for NAND Flash but the question is
when ?

This past April, Toshiba
Semiconductor forecast that 25% of all notebook PCs will use SSD in
2011[ “1/4 of Notebook PCs to have SSD in 3 years, Toshiba
Semiconductor says”, Nikkei Tech-On, 4/21/2008]. They further
indicated that evolving technology would lower NAND FLASH memory
manufacturing costs by 40-50% per year. They stated the current SSD
pricing disadvantage vs HDDs would be gradually reduced from the
current 2.9 and 6.4X that of 1.8- and 2.5-inch HDD respectively to
1.4 and 3.2X by the 2010-2011 timeframe. They showed a 256 Gb SSD
drive and said they would be introducing a 512 Gb SSDs in the
future.

In support of such predictions, IDC
projections for 128 Gb SSD ASP and Web-feet research (
chartered by Toshiba) unit demand projections are shown below. They
project ~ 200MM units / yr demand by 2013, 40% of which is expected
to be SSD.

In September Intel introduced SSDs
aimed at replacing hard disk drives in computers. The products
feature controllers that Intel designed specifically for the PC
architecture. There have been reoprts that by 2012 we could see 256
GB SSD for < $200. [ “Replacing hard-disk
drives with solid state: A challenging but opportune prospect for
vendors” EDN, 10/14/2008]

Not that there aren’t still
issues with SSD. For instance there are reports that Samsung
is working with Microsoft  to improve the performance of SSDs
on the Windows operating system. [ see “Samsung and Microsoft
in talks to speed up SSDs on Vista”, Computerworld.com,
8/7/2008 ] Windows is currently designed to work with data from
rotating media, but by working with Microsoft, Samsung wants to
distinguish SSDs from hard drives on the Windows OS (operating
system). OS currently recognize HDD data in 512 byte sectors
whereas SSDs need a 4 Kb sector size. It is assumed that such
issues will be resolved quickly as SSDs gain more market share.

In the table below I have
listed some of the big players and shown their overlapping activity
in CIS and memory . It is obvious that development of TSV stacking
and bonding technology, is relevant to both product lines.

So the question for 3D Integration
is not whether the SSD market will happen but rather
when one of the players will pull the trigger on 3D
Integration for SSD, which has been shown to result in improved
electrical performance and vastly improved volumetric efficiency
for stacked FLASH. 

Stay tuned……we will be finding
out together………………

Status of XSil
?

I’ve been a strong supported
of the great laser research and development work that XSil has been
doing / presenting in the past year or so. They have pretty much
single handedly put lasers back on the map when it comes to
technologies for TSV formation.

So, I was extremely disappointed
when I recently saw (mid September) reports in Irish newspapers
that that XSil had put all its staff (of 44 including Sr
management) on protective notice after a sharp deterioration in
business. The company’s staff were told by Brian Farrell, CEO
that they “…have launched new products, but the
uptake has been much slower than anticipated and the downfall [in
the existing business] has been much steeper.” and that its
business with one large customer had
‘‘…deteriorated much quicker than
anticipated’’.  Newspaper reports indicated that
that the firm’s revenues had collapsed and it was facing a
liquidity crunch. If this ominous report is true, best of luck to
all those involved. ……..

Coming up in
PFTLE………………

….highlights of last months
Sematech 3D Integration workshop “Manufacturing and
Reliability Challenges for 3D Interconnects using Through-Silicon
Vias” held  at the Advanced Metallization
Conference

For all the latest on 3D IC
Integration stay linked to Perspectives From the Leading Edge
[PFTLE] ……….