Section 7 MOS Memory Market Trends

Section 7 MOS Memory Market TrendsOVERVIEW
The MOS memory market consists of DRAM, SRAM, ROM, EPROM, EEPROM, and flash
memory products. Each segment of the MOS memory market will be discussed in greater detail
in this section.
In 1996, MOS memory devices accounted for 31 percent of the IC market, down significantly from
1995, when MOS memory products represent 42 percent of the IC market (Figure 7-1). The steep
decline in memory average selling prices (ASPs) was the big reason why the memory market
ÒdeclinedÓ so greatly in 1996. With enough fab capacity to meet the demand for DRAMs, SRAMs,
and flash memory in the foreseeable future, there should be greater stability in the overall aver-
age selling prices for memory devices. As a result, ICE does not anticipate the memory market
representing 40-plus percent of the IC market again in the next five years.
INTEGRATED CIRCUIT ENGINEERING CORPORATION 7-1
7 MOS MEMORY MARKET TRENDS
21758
34% 36%
Year Source: ICE, "Status 1997"
Figure 7-1. MOS Memory Percent of Total Worldwide IC Market ($M)
Nevertheless, the memory market remains one of the best growing and competitive markets in the
IC industry. For the 1991-2001 time period, the MOS memory market is forecast to have a cumu-
lative average annual growth rate of 23 percent (Figure 7-2).
Figure 7-3 shows ICEÕs forecast of various MOS memory devices by product category through the
year 2001. Following three straight years of better than 40 percent growth (1993, 42%; 1994, 55%;
1995, 65%), the MOS memory market in 1996 experienced the Òcorrection yearÓ that was antici-
pated for some time. As already stated, additional wafer fab capacity led to greatly reduced aver-
age selling prices for memory products, but especially DRAMs. This, in turn, led to the -32
percent reduction in the size of the 1996 MOS memory market.
DRAMs make up the majority of MOS memory sales and are forecast to be the dominant memory
product through the year 2001 (Figure 7-4). ICE forecasts that in the year 2001, 74 percent of the
MOS memory market will be attributed to DRAM sales, which nears the record 1995 level. Flash
memory sales, which accounted for three percent of the MOS memory market in 1995 and seven
percent in 1996, are forecast to grow to represent a double-digit amount of the 2001 MOS memory
market.
ICE estimates that MOS memory consumption increased slightly in the North American and
ROW regions in 1996 (Figure 7-5). Meanwhile, Figure 7-6 leaves no doubt that the Japanese com-
panies still hold the greatest share of MOS memory production.
MOS Memory Market Trends
INTEGRATED CIRCUIT ENGINEERING CORPORATION7-2
Figure 7-2. 1991-2001 MOS Memory Market CAGR
WW IC Market ($M)
WW Memory Percent Change
DRAM ($M)
SRAM ($M)
EPROM ($M)
Flash ($M)
ROM ($M)
EEPROM ($M)
DRAM SRAM
ROM EPROM
$53.5B
$36.3B
$38.4B
1998
1997
17213K
1996
1995
Source: ICE, "Status 1997"
Regional production for each MOS memory segment is shown in Figure 7-7. In 1996, Japanese
firms supplied the biggest portion of DRAMs, SRAMs, and ROMsÑthe largest memory market
segments. However, ROW companies (largely Korean semiconductor firms) continued to nip at
the heels of Japan in the DRAM and SRAM markets (Figure 7-8).
North American companies lost three points of marketshare in the DRAM segment in 1996, but
dominated the EPROM, EEPROM, and rising flash memory markets. SGS-Thomson, the worldÕs
leading EPROM manufacturer, was the source of EuropeÕs strong showing in the EPROM market
and was also a contributor to the flash memory market.
Listed in Figure 7-9 are the top five worldwide MOS memory suppliers in 1996. ICE shows that
Samsung continued as the leading supplier of MOS memory devices in 1996, although its sales
were down by a large margin compared to 1995. Again, the huge decrease in average selling
prices led to the smaller sales figures.
In Figure 7-10, ICE estimates the memory IC usage by system type. Over the course of five years,
memory applications changed very little while the market tripled in size.
20173D
0
20
40
60
80
100
Figure 7-7. 1996 MOS Memory Production by Product Segment (EST, $M)
Figure 7-8. ROW (Korea) Muscles Production From Japan ($)
0
20
40
60
80
100
1996199519941993
62%
25%
54%
28%
49%
Read-only memories (ROMs) represent the least expensive type of semiconductor memory. They
are used primarily for permanent data storage in electronic equipment such as laser printer fonts,
dictionary data in word processors, and sound-source data in electronic musical instruments.
ROMs are also used extensively in video game software. The ROM market grew well through the
first half of the 1990Õs, coinciding closely with a jump in PC sales and other consumer-oriented
electronic systems (Figure 7-11).
1991 $12.3B
Communications 8%
Consumer 13%
Computer 70%
Figure 7-10. Memory IC Usage by System Type
However, as noted in Figure 7-12, the ROM market decreased 32 percent in 1996. ICE believes that
the ROM market will continue on a slow decline through 2001. The primary reason for the big
decline in 1996 was the weak Japanese yen measured against the dollar. Since the ROM market is
largely dominated by Japanese manufacturers and end users, it is closely tied to fluctuations in the
yen. Using a figure of 109 yen to the dollar for 1996 rather than 94 yen to the dollar as in 1995, the
ROM market (measured in dollars) is negatively impacted.
ROM consumption by geographic region is shown in Figure 7-13. ICE estimates that Japan lost
six percentage points of marketshare to other regions of the world in 1996.
Despite gains by the ROW region, Japanese IC makers continued to hold a tight grip as ROM
market leaders in 1996 (Figure 7-14). Sharp remained the leading ROM supplier and continued
to bolster its portfolio of 3V, high-density ROMs. Additionally, it concluded that there was
demand for 64M ROM devices and began mass producing the devices in 3Q96 using its 0.45µm
process technology.
Although the ROM market is dominated by Japanese suppliers, not all have elected to stay in the
ROM business. Fujitsu, for example, announced its intentions to withdraw from the mask ROM
business. It canceled development efforts of its 32M and other next-generation devices, and
stopped producing and shipping its line of 16M and smaller products in 1996.
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Although not a leading ROM supplier, American Microsystems Inc. (AMI) unveiled two high-
speed (45ns and 70ns) 1M devices targeted for disk drive and modem applications. The fast access
time reduces processor wait states in disk drive applications. Initial versions will operate at 5V,
but 3.3V technology is planned for 1997.
Figure 7-13. ROM Market by Region
16790L
SiemensÕ Record-On-Silicon (ROS) is a ROM device that targets the multimedia market. With a 50-
percent reduction in die area compared with conventional ROM, the company claims the ROS could
halve the cost of conventional ROM and push into markets for non-semiconductor storage, such as
compact disks and photographic film. 16M and 64M versions of the device were initially made
available but the plan is for greater densities to be introduced in 1997.
Market demand for ROMs has slowly migrated toward higher densities (Figure 7-15). Most ROM
manufacturers elected to keep their ROM production at the 4M level. However, a few companies
developed and started shipping 64M ROM devices.
THE EEPROM MARKET
EEPROMs (electrically erasable programmable read only memories) offer users excellent capabil-
ities and performance. Two key advantages of using EEPROMs include in-system reprogramma-
bility and bit by bit erasure capability.
The EEPROM market forecast through the year 2001 is shown in Figure 7-16. In 1996, ICE esti-
mates the EEPROM market grew four percent after two years of 20-plus percent growth. ICE fore-
casts that through the year 2001, the EEPROM market will average 15 percent growth per year.
EEPROM consumption by region is shown in Figure 7-17. Due in part to military use, the North
American region was the largest market for EEPROMs in 1996.
14496S
D o
lla rs
19%
Figure 7-15. ROM Unit Shipments by Density
EEPROMs are available in either a serial or parallel version. Parallel devices are available in
higher densities, are generally faster, offer high endurance and reliability, but also cost more than
their serial counterparts. Parallel EEPROMs are found mostly in the military market. Serial
EEPROMs, though generally less dense and slower than parallel devices, are much cheaper and
used in more of the ÒcommodityÓ applications.
In 1996, ICE estimates that serial
EEPROMs accounted for 92 percent
of the $920 million EEPROM market
(Figure 7-18). The largest density
serial EEPROM shipped in volume
was the 64K device. Companies
such as Atmel, Xicor, and SGS-
Thomson supplied the large major-
ity of these products. Designers
who needed more than 64K of
EEPROM had to use two or more
smaller serial EEPROMs connected in parallel. However, in 4Q96, SGS-Thomson pushed serial
densities to a new level with the introduction of its 128K and 256K devices.
The largest parallel EEPROMs built in volume during 1996 were 1M devices. They were used
extensively, although not exclusively, in military applications. Parallel EEPROMs are of particular
interest in the military because they offer more flexibility than other types of solid-state memory.
Parallel EEPROMs can be found in defense applications such as flight controllers, vehicle control
systems, field communications equipment, secure radios, command and control systems, radar,
and guidance subsystems. The lightness, ruggedness, and fast performance of parallel EEPROMs
make them well suited for harsh environments.
16792JSource: WSTS/ICE, "Status 1997"
1996 (EST) $920M Europe
1996 (EST) $920M
8%
Consumer-oriented applications
serial EEPROMs in 1996 (Figure 7-
19). Led by a another generation of
low-voltage parts, EEPROM suppli-
vibrant business in rapidly growing
portable consumer and industrial
applications. Small density serial
sively in portable, battery-powered
devices including pagers, modems,
and cellular and cordless phones. They have also showed up in parameter and configuration
setups in disk drives, printers, and industrial data-acquisition applications. In automotive appli-
cations, EEPROMs are used in air bags, antilock braking systems, and car radios.
Newer EEPROM applications include satellite communications boxes and monitors, and sense-
detect functions in memory modules. Suppliers are also excited about the potential of EEPROMs
in the smart-card market. Most leading manufacturers are also offering their devices in low-volt-
age versions. SGS-ThomsonÕs Eagle Range serial EEPROM family, for example, supports opera-
tion as low as 1.8V and its next generation will support 1V operation. In 3Q96, Atmel introduced
the first 3V 1M parallel EEPROM.
Innovative features have been added to EEPROMs by many manufacturers. In 1996, Xicor intro-
duced Block Lock protection on two of its EEPROMs. By allowing users to partition their devices
with 25, 50, 100 percent write protection, Block Lock allows them to combine alterable data with
secured data.
Several vendors agree that EEPROM technology is facing increased competition from flash
memory. Flash remains a mass-storage technology and is virtually unavailable in densities under
1M. EEPROMs, on the other hand, are mainly used for storing small amounts of data that are fre-
quently changed. Systems vendors are clamoring for the best of both memories on a single chip.
To meet a growing need, SGS-Thomson is developing its ÒSuper FlashÓ device, a part that com-
bines non-volatile flash technology and full-featured EEPROM functionality (Figure 7-20). A key
benefit of a combined EEPROM/flash chip, compared with the common technique of simulating
EEPROM in flash memory, is that the host controller can read the flash memory while an
EEPROM write cycle is in progress.
Figure 7-19. Serial EEPROM Applications
Leading EEPROM suppliers are shown in Figure 7-21. Atmel and SGS-Thomson continued to
make strides in the market. For these and other companies that manufacture them, the EEPROM
business should remain reasonably healthy and stable through 2001.
Address In
EEPROM Array
Control
14498Q
THE EPROM MARKET
EPROMs (electrically programmable read only memory) have long been the cornerstone of the
non-volatile memory market. Created in the 1970Õs with IntelÕs invention of the UV-erasable
PROM, these devices have since been produced in an assortment of part types with varying
speeds and densities. EPROMsÕ stronghold has been tested in recent years with the emergence of
other non-volatile memory products, specifically flash memory.
The recent history of the EPROM market, including unit shipments and ASPs, is shown in Figure
7-22. The 1994 dip in dollar volume and the subsequent spike in 1995 are primarily due to the
emergence of flash memory onto the memory scene. For a season, at least, flash memory put
EPROMs on the backburner in everyoneÕs mind. Thoughts were, at that time, that the EPROM
market would not be able to compete or exist with flash memory devices. But, lack of flash
memory supply and their high initial prices provided opportunity for the EPROM market to
rebound late in 1994 and into 1995.
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In 1996, however, ICE believes that the flash memory market put more pressure on the EPROM
market. As a result, the EPROM market, while still a billion-plus dollar market, declined 21 per-
cent in 1996. Further, ICE forecasts that this slow decline will average four percent per year
through the year 2001 (Figure 7-23). The decline comes as many long-time EPROM suppliers,
evaluating their capacity allocations and future product strategies, have chosen to produce
memory products with higher profit margins.
ICE forecasts that 1997 will be the first year (since its initial market days) that the EPROM market
will not reach the $1 billion level. Although several competitors lessened their commitments to
the EPROM market, others increased production to milk all they can from the roughly $1 billion
business.
Figure 7-24 shows that, in 1996, the majority of EPROM shipments were devices with densities
equal to or smaller than 256K. Seventy-five percent of EPROM shipments had densities equal to
or less than 1M. In the smaller density domain, EPROM devices hold an advantage over flash
memory products. As an example, EPROMs have grown in the peripheral market, driven largely
by the explosive growth of CD-ROM drives. Each CD-ROM drive uses a 256K or 512K EPROM.
Furthermore, sales of modems (especially 28.8K V.34 versions) have escalated with the increased
use of the Internet. Most of these modems use a fast 1M EPROM.
0
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800
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1,200
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20012000199919981997199619951994
1,390 1,385 1,100 990
Figure 7-23. EPROM Market Decline
The choice between EPROM and flash memory comes into play at higher densities (³1M). In some
cases, the lower cost of some EPROM products may offer an advantage for a system designer.
However, the trade-off of lower price is sometimes met with less flexibility (Figure 7-25).
Leading EPROM suppliers for 1995 and 1996 are shown in Figure 7-26. Potentially dramatically
affecting EPROM market stability (and ranking of leading suppliers) in 1996 is the departure of
many primary EPROM manufacturers (Figure 7-27). The exodus started in 1995 when formida-
ble EPROM manufacturers such as AMD, TI, National, and many Japanese suppliers, including
NEC, Fujitsu, and Mitsubishi announced they would curtail their support of this market in order
to focus on other products.
Not every company has distanced themselves from the EPROM market, however. SGS-Thomson,
though shown with only a small EPROM sales increase in 1996, remains committed to being the
number one EPROM supplier through the end of the decade. ST has continued to invest in EPROM
technology. It currently uses 0.5µm and 0.6µm process technology to build all its EPROM products.
Figure 7-25. EPROMs Offer Lower Cost but Less Flexibility
Typical Storage Use
256K to 64M
Write up to one million times
1K to 64K (serial) 64K to 4M (parallel)
EPROM Flash EEPROM
1996 Rank
Figure 7-26. EPROM Market Leaders
20412A
AMD
• More wafer starts at Flash facility (FASL) in Japan
National
• EPROM production down 60 percent in 1995
• Integrating EPROM and Flash capabilities with MCU and MPU technology to create application-specific products
Texas Instruments
• Reduced EPROM production 50 percent to provide more capacity for DSPs
Less Emphasis
• Densities to 16M; many low-voltage versions
Cypress
• Previously a high-speed EPROM player, now attacking slow, low-cost segment left behind by others
Integrated Silicon Solution Inc.
Atmel
• $30 million capital equipment investment to bring up 0.5µm EPROM manufacturing process. Roadmap takes the process to 0.18µm.
More Emphasis
Atmel and Cypress increased their presence in the market during 1996 as well. As long as Atmel
can fill the void left by other EPROM manufacturers, its product portfolio will continue to favor
memory products. Meanwhile, Cypress sees greater opportunities in the commodity EPROM
business. It started making slow versions (access times slower than 55ns) of its fast EPROM prod-
ucts. In doing so, Cypress believes it will better cover the complete range of speed requirements
for many applications.
Through the years, the EPROM market has been much more evenly balanced by region than other
memory segments (Figure 7-28). Although Japan still is the EPROM market leader, ICE forecasts
that the ROW region will capture more of the EPROM market in the coming years. The reason for
this shift is that North America, Japan, and Europe will be quicker to accept and implement flash
memory in different systems, thus leaving the EPROM market to others.
THE FLASH MEMORY MARKET
In the semiconductor hierarchy, flash is a member of the non-volatile family (Figure 7-29).
Expanding the non-volatile memory family (Figure 7-30), flash memory currently represents a
middle-of-the-road alternative in terms of cost and functionality.
The flash memory market is one that ICE projects will be among the fastest growing semiconduc-
tor product segments through the year 2001. Though not as big as the DRAM or SRAM markets,
its sales growth makes it an important market to follow.
For many years, flash memory was stuck in a cycle of being too high cost for existing high-volume
applications. The lack of such applications, in turn, lessened the drive for lower-cost, higher-den-
sity chips. In 1996, that cycle appeared to break as suppliers started to deliver high-density chips
and dropped prices to new, low levels. With declining cost, increasing density, and the ability to
operate at lower voltages, flash memory once agian drew the attention of designers of portable
systems, communications systems, and peripherals across a broad range of markets.
Figure 7-28. EPROM Market by Region
Most flash memories are still used to replace EPROMs or EEPROMs for code storage, but suppli-
ers have turned to portable mass-storage applications while lowering the voltage specs. End-uses
include the plethora of low-voltage communication and mobile computing applications (memory
PC cards, updatable BIOS storage, etc.). Emerging markets, such as digital cameras (in their infant
stages in Japan) represent more sizable potential.
A quarterly market history of flash devices is plotted in Figure 7-31. The graph paints a picture of
a volatile market history in which supply shortages and high prices were followed by an adequate
supply and plunging prices. One of the keys to the flash memory market growing well in 1996
was the fact that average selling prices (ASPs) declined throughout the year. From $8.48 in 1Q96
to and estimated $6.45 in 4Q96, flash memory ASPs fell more quickly than anticipated during the
year. Prices fell particularly fast in June, when AMD announced a reduction of 30 percent on its
flash memory devices. Through October, 4M flash devices had decreased by more than 50 percent
during 1996.
Lower Cost Per Bit Increased Functionality SRAM
DRAM
Lower Cost Per Bit Increased Functionality
NVRAM
EPROM
FLASH
EEPROM
ROM
Figure 7-30. Non-Volatile Memory Hierarchy
Several big-name memory suppliers became a more sizable force the flash memory market in
1996. Among these were Hyundai, Micron, Motorola, NEC, TI, Samsung, and Toshiba. All
entered the flash business in 1996 or will enter it in early 1997.
Interestingly, the list includes many suppliers who have been big players in the DRAM market.
Battered by plunging average selling prices for DRAMs, many vendors looked to the flash
memory market as a way to increase profits. However, if these and several other vendors elect to
participate in the flash market, the result could be an oversupply of parts and a further reduction
of flash ASPs in 1997.
The annual growth of the flash market is shown in Figure 7-32. ICE is very bullish on the flash
memory market through the year 2001. ICE forecasts the flash market to swell to more than $10
billion in 2001, almost four times its 1996 size. Using these figures, the annual growth rate in the
flash market is forecast to be 31 percent.
Flash memory consumption (Figure 7-33) was dominated by the North American region during
1995 and ICE estimates that was the case again in 1996. In the course of one short year, however,
JapanÕs consumption of flash memory devices increased greatly. That regionÕs thirst for portabil-
ity and consumer applications led to the dramatic increase in flash consumption during 1996.
With its emphasis on smart cards and telecommunications, the European region was also a sizable
consumer of flash memory parts.
Figure 7-31. Quarterly Flash Memory Market
The leading flash memory suppliers for 1995 and 1996 are shown in Figure 7-34. Since its incep-
tion, the flash market has been dominated by Intel and AMD. That does not seem likely to change
in 1996. However, AMDÕs sales growth slowed and, IntelÕs flash memory growth, after sailing
along during the first half of the year, dropped sharply in 3Q96 as several new players jumped
into the fast growing market segment, which caused prices to head south.
0
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20012000199919981997199619951994199319921991
18692D
Figure 7-33. Flash Memory Market by Region
North America 44%
Other companies made strides in the flash market as well. Atmel, Fujitsu, and several Asia-Pacific-
based companies (including several Taiwanese suppliers, see Figure 7-35) became more active par-
ticipants in the flash market during 1996 and anticipate another year of solid flash memory sales
in 1997. Additional flash information on a company by company basis is provided below.
Company Flash Plans
Formosa Chemical & Fibre
Macronix
UMC
Winbond
Looking for a joint-venture partner to help propel it into the flash memory business. It desires to manufacture flash memories (and other related IC products) in a proposed 200mm sub-micron fab.
Has sold 1M and 4M flash parts for several years. Designing products around a single-voltage architecture developed by AMD. Sampled 16M flash devices co-developed with NKK of Japan.
Designing 1M and 2M flash products around a single-voltage architecture developed by AMD. Shipments began in mid-1996.
Sampling first members of its flash family based on its proprietary EEPROM technology. The 256K and 1M 5V-only densities are built around a "split-gate" architecture, which differs from Intel's and AMD's cell structure.
20419Source: ICE, "Status 1997"
Intel
The flash memory leader is Intel. It, along with AMD, is the dominant supplier of flash memory
for code-storage applications. Intel offers its SmartVoltage flash parts that afford read and write
voltages from 3V to 12V. Intel maintains that this feature gives its customers more choices of pro-
gramming speed (higher voltage means higher programming speed).
SmartVoltage flash devices are manufactured using a low-cost, leading-edge 0.4µm process tech-
nology. At 0.4µm, IntelÕs ETOX V process is similar to the 0.35µm process used for its micro-
processors.
In 4Q96, Intel expanded its SmartVoltage lineup with the Smart3 and Smart5 families that provide
embedded system designers with 3V or 5V read/write capabilities, while enabling fast 12V pro-
gramming. The devices are available in densities up to 16M.
Intel prepared a new method of packing more bits of storage onto one flash cell, thereby increas-
ing the density of the device. Known as multi-level cell (MLC) flash, the technique squeezes two
bits of data into one flash cell (compared to one bit of data per cell now). Intel believes four bits
of data per cell is very possible. If yields are satisfactory, Intel could quickly move ahead of its
competition in bringing down the cost per bit of flash memory. A 64M MLC flash device is slated
to be introduced in 1Q97.
Intel spent several billion dollars during the past few years to increase its flash memory produc-
tion capacity. It is now positioned, along with its flash manufacturing partner Sharp, to capture
additional worldwide business in this field.
AMD
Architecturally, AMDÕs flash devices are similar to IntelÕs. However, rather than varying voltages
for read and write as Intel does, AMD offers the single-voltage-only option for read and write.
AMD maintains that single-voltage parts offer OEMs a simpler solution.
During 1996, AMD announced three new members of its 2.7V-only flash memory family. The
two 4M and one 8M devices, with access times as fast as 100ns, are targeted for emerging and
existing battery-powered applications including digital cellular phones, flash memory cards, and
digital cameras.
AMD and Fujitsu are manufacturing partners for flash memory devices. The two produce
devices from their own facilities, but also jointly out of Fujitsu-AMD Semiconductor Limited, or
FASL. Two FASL fabs were slated to be built. The first is completed and running at full produc-
tion volume. The installation of equipment at the second FASL fab was postponed and the start-
up date moved six months out from its original May 1997 date because of the semiconductor
industry slowdown.
The FASL production agreement initially called for exclusive rights to sell flash chips in specific
regions of the worldÑAMD in North America, Taiwan, and most of Europe, while Fujitsu claimed
Japan and the United Kingdom. However, due to eroding prices and dwindling marketshare, the
two companies modified their agreement in 4Q96 to allow each to sell its flash devices anywhere
in the world without regard to geographic region.
Atmel
Atmel has been a leader in the flash memory business as well. AtmelÕs flash memory devices
afford the user the ability to erase information in small, bit increments rather than in large blocks
like parts from most other vendors.
Atmel views low voltage as a key to its product strategy and design wins. It has been particularly
successful targeting portable applications such as cell phones. Atmel was one of the first compa-
nies to offer a 3V flash device, and saw demand for those parts jump during 1996. Besides 3V
parts, it also developed a 2.5V, single-voltage read/write flash family in 4Q96. The new flash
family will have densities ranging from 1M to 8M. Additionally, the company is working fever-
ishly on a 1.8V part that is slated to be released in 1997.
Taking advantage of its EEPROM expertise, Atmel also developed a combo memory device that
incorporates both flash memory and EEPROM. The companyÕs ConcurrentFlash chip packs 4M
of flash along with 256K of EEPROM. It is clearly targeted for cell phone designs where, for exam-
ple, program storage of various worldwide digital cell phone protocols (GSM, etc.) can be changed
frequently in flash. Meanwhile, names and numbers can be updated in EEPROM.
Catalyst
At Catalyst, low density flash products are an important element of its long-term strategy. To that
end, the company expanded its flash memory product line in 4Q96 with a BIOS flash family of
products targeted specifically at disk drives and other storage applications. The family will ini-
tially be offered in 1M and 2M versions. A 1.5M device is scheduled to be introduced in March
1997. According to Catalyst, 1M and 2M flash devices account for more than 90 percent of the
volume in PC applications.
Fujitsu
Fujitsu works closely with AMD to develop and manufacture flash memory devices. In 1996, the
company took steps to avoid an oversupply problem in the flash memory market similar to the
one that faced the DRAM industry. Fujitsu trimmed sales and production targets and delayed the
opening of its second FASL fab by six months because of intensified competition among chip
makers in the flash market.
Fujitsu announced in 4Q96 that it would add NAND-type flash memory to its product portfolio
beginning in 1998. Along with its joint-venture partner AMD, Fujitsu decided to produce NAND-
type chips because they are better suited for file applications than the NOR-type. Additionally,
Fujitsu thinks it is essential to have a wider product lineup.
Hitachi/Mitsubishi
Hitachi stressed development of its DiNOR technology in 1996 and offered end users several den-
sities built upon this body of knowledge. In 3Q96, it introduced two 3V-only 8M devices that were
co-designed with Mitsubishi. The memories, built on 0.5µm technology, feature 80ns access times
and 40 percent less power dissipation than 5V memories. The two companies believe that with
the 8M DiNOR devices, they will be able to quickly catch up to leaders Intel and AMD in the flash
memory market.
In 4Q96, Hitachi and Mitsubishi rolled out a 64M flash device that will initially serve as the stor-
age centerpiece in HitachiÕs 75MB ATA-standard PC cards. The chips are manufactured using
0.4µm AND-flash process technology.
Mitsubishi plans to raise output of its 8M and 16M DiNOR-type flash memories to one million
units per month beginning in April 1997. Mitsubishi also makes NOR-type flash memory but will
not increase output of these devices. Instead, it will focus on producing DiNOR- and AND-based
flash devices.
Micron
Hoping to shelter itself from a limp DRAM market and citing new production capability after con-
verting most of its fab capacity to 200mm wafers, Micron announced that it started production of
2M and 4M SmartVoltage boot block (i.e., Intel compatible) flash memory devices. Although the
company has bet on the multiple-voltage approach for now, it expects eventually to move to
single-voltage parts.
Motorola
Motorola plans to announce new flash products in 1Q97 for both internal and open-market
customers.
NexCom
Flash designer-turned-vendor NexCom Technology introduced the first two members (4M and
8M) of its high-density flash family in 4Q96. NexComÕs flash products combine NOR-and
NAND-based flash structures. The result is a single-cell device that offers the high density of
NOR and the quick write times of NAND. The devices include on-chip serial SRAM, which can
be used either with, or independently of, the flash memory. The new memories are expected to
appear in portable applications where audio and images, as well as data, require low-power
memory for storage and transfer.
Texas Instruments
TI plans to introduce a series of 2M and 4M flash devices, with separate versions that conform to
both Intel and AMD standards. In early 1997, the company hopes to develop a basic 8M design
that can be tailored for either standard by changing the metal mask, a step TI claims is a relatively
simple manufacturing adjustment.
Samsung/Toshiba
These two memory powerhouses joined forces to create an alliance to build compatible NAND-
type flash devices that exclusively target the mass-storage market. The two companies initially
conceded the NOR market to Intel and AMD, but by 4Q96, each feared losing out on the booming
wireless phone market and emerging PC boot-up market, where NOR devices hold a distinct
market lead. As a result, both companies plan to introduce NOR-based flash devices in 1Q97.
Samsung believes it can reach the $10 per megabyte-level building 16M devices in early 1997, and
would cut that cost to about $6 per megabyte by the beginning of 1998 by using 64M devices,
which it claimed to be sampling in 4Q96.
SGS-Thomson
SGS-Thomson offers both multiple-voltage and single-voltage only flash parts to its customers. It
will work with a customer to determine the best solution for the application.
Xicor
Xicor offers parts ranging in density from 1K to 16K. Unlike other vendors, Xicor is interested
solely in code storage for embedded portable applications. Small sector sizes, low pin count, and
low voltages are the technologyÕs strengths.
TRENDS IN FLASH MEMORY
Architecture
There are four significant flash architectures that are available (Figure 7-36) to OEMs. The two
most prominent architectures are NOR and NAND. Both are based on technology from flashÕs
predecessors, the EPROM and EEPROM, respectively. Of these two styles, the most ubiquitous
type is the NOR architecture.
Rivalry exists among vendors as to which type is the best architecture. In most cases, NOR is con-
sidered best for fast-access, lower-density code-storage applications, while NAND is deemed
advantageous for high-density, lower-cost, high-end mass storage applications. Figure 7-37 pro-
vides a look at the various flash memory architectures and the vendors who support them, while
Figure 7-38 provides a sampling of flash devices available from these vendors.
Source: Computer Design/Mitsubishi/ICE, "Status 1997" 20418A
Program Method
Erase Method
Suitable Applications (by density)
PDA, cellular, networking, low-density ATA cards
Not suitable
Tunnel current
Tunnel current
Not suitable
Tunnel current
Tunnel current
PDA, cellular, networking, low-density ATA cards
High-density ATA cards (10-100Mbytes)
Figure 7-36. Flash Architectures Stretch to Fit Memory Requirements
A standard architecture for all flash memory devices will not likely occur within the next five
years. Each architecture appears to have advantages depending on the application. In order to
hedge their bets and to support the needs of a growing customer base, several suppliers
announced that they would begin supporting two or more types of flash memory architectures
beginning in 1997 and 1998.
NOR NAND AND DINOR
Figure 7-37. VendorsÕ Support of Flash Memory Architectures
Figure 7-38. A Sampling of Flash Products
Source: Electronic Business Today/ICE, "Status 1997"
* Some companies have announced higher densities. ** In addition, two select transistors are required for every 16 cells, but no bit line
contacts are needed between transistor pairs, as in NOR cells. 21773
Cell Architecture
Embedded Code
Voltage
Another issue being addressed in the flash market is that of single- versus dual-supply voltage,
and the implementation of low-voltage parts. Intel offers its SmartVoltage devices, which provide
several voltages for reading and erasing data from storage. AMD, on the other hand, is among
the leading proponents of single-voltage flash devices.
Currently, both dual and single-voltage parts have advantages. Again, the end use usually deter-
mines the best device to implement into the design. Long-term, the trend is for users to design
single-voltage devices into their systems. Flash unit shipments quickly shifted to single, low-volt-
age (5V/5V and 3V/3V, read/erase-program) parts in 1996 and are forecast to continue migrating
to lower voltages (Figure 7-39).
0
10
20
30
40
50
60
70
80
90
100
Figure 7-39. Percentage of Flash Unit Shipments By Read/Erase-Program Voltage
Multi-Level Cell Technology
Currently, flash devices store one bit of data in each memory cell. However, for some time, engi-
neers have envisioned storing more than one bit of data in each memory cell. That concept is not
far away from reality. Multi-state flash (Intel calls it multi-level cellÑMLCÑflash, SanDisk calls
it ÒDouble DensityÓ or ÒD2Ó) is a great way to boost density in memory cells without greatly
increasing the size of the die.
Perhaps more meaningful for suppliers and designers is that multi-state flash can help reduce
device costs more quickly. SanDisk estimates that it can cut storage prices in half from year to year
with every new generation; from $10 per megabyte to $5 per megabyte by the end of 1997, to $2.50
per megabyte by the end of 1998, using its Double Density technology.
SanDisk, along with manufacturing partner Matsushita, used the technology in flash memory
devices to boost single-chip capacity to 64M. The SanDisk implementation stores four discrete volt-
age levels in each NOR cell, thereby representing two bits per cell. SanDisk claims that the 64M die
is only 10 percent larger than the companyÕs 32-bit die. It plans to offer samples of its device in
1Q97. Meanwhile, the company is also working on a 256M Double Density flash device.
Intel also plans to introduce its first MLC-based 64M flash device in 1Q97. With its MLC product,
Intel plans to target the market for NAND-flash by offering comparable (or better) performance
at a lower price. NEC and Samsung have also published papers on MLC-based flash technology.
Embedded Flash and MCUs
Reprogrammability and in-circuit programming capability provide a highly flexible solution to
rapidly changing market demands. To meet these needs, several vendors have embedded flash
memory onto their microcontroller or other logic device. Typical embedded code applications
include smart sensors, rolling code remote-keyless-entry, home security systems, and space-con-
strained applications such as pagers. The devices also help reduce time-to-market for many sys-
tems as product specific programs or code can be downloaded quickly depending on the
application.
Among the vendors who supply such parts are Microchip Technology, which features a 2V 8-bit
flash microcontroller. Also, Toshiba introduced a 16-bit MCU with 64K of flash memory and NEC,
in 4Q96, sampled its 3V 16-bit MCU with 128K of built-in flash memory.
Hitachi developed a 32-bit RISC MCU that is offered with 128K or 256K of built-in flash memory
and will begin sampling the part in 1Q97. Sanyo teamed with Silicon Storage Technology and
offers 8-bit and 16-bit MCUs with flash memory. And, Lucent Technology provides flash memory
built into its DSP devices (FlashDSP).
Capacity
Capacity was a point of concern in the flash memory market as much as it was anywhere else in
the IC industry during 1995. However, in 1996, the two major flash memory vendors, Intel and
AMD, added new flash wafer fabs and reduced process feature sizes in order to increase produc-
tion capacity during the year and into 1997. A review of flash wafer fab capacity plans from sev-
eral leading vendors is shown in Figure 7-40.
Meanwhile, other companies around the world including Hitachi, Hyundai, Mitsubishi,
Samsung, Sanyo, SGS-Thomson, and Texas Instruments announced new wafer fabs or retrofits for
flash memory. Is it possible for the market to absorb a doubling of flash manufacturing capacity
in each of the next few years? Chip makers must think so as the spending for and building of flash
facilities is set to increase dramatically.
Intel
Sharp
AMD/Fujitsu
Mitsubishi
Fab 3 Fukuyama, Japan 200mm wafers
Fab 4 Hiroshima, Japan 200mm wafers
FASL Aizu-Wakamatsu, Japan 200mm wafers
Saijo Facility Japan
0.4µm
0.4µm
0.25µm
0.4µm
0.4µm
0.5µm
0.5µm
Wafer starts increased 25% in 1996. Mostly 5V/12V parts. Die shrinks to improve effective capacity/yields.
Production started 4Q96.
$1 billion investment. First silicon due 4Q97. Production ramp slated for 1998. When fully operational, Fab 18 will increase Intel's flash output 350% over 1995 levels.
Builds Intel devices. Running 8Mbit, 16Mbit parts. Accelerating development of Intel's SmartVoltage technology.
$1 billion investment. Initial production in 1998.
Opened 4Q94. Aggressive ramp schedule. Second joint-venture (FASL-2) in Japan delayed six months. Production now slated to begin in late 1998.
Greater emphasis on flash memories, less emphasis on DRAMs.
20079CSource: ICE, "Status 1997"
FERROELECTRIC RAMs (FRAM)
An interesting memory product that made headlines in 2H96 was the ferroelectric RAM (FRAM).
The FRAM was developed by Ramtron but has been licensed to other manufacturers, including
Rohm, Fujitsu, and Hitachi.
Proponents of ferroelectric RAM give it the lofty title of the Òperfect memoryÓ because it combines
the speed of random access memory with the non-volatility of ROM memory (Figure 7-41).
HitachiÕs non-volatile road map shows that the FRAMs may replace DRAM and as much as 80
percent of the low-density (<1M) SRAM market by 1999. FRAM may even become an Òall pur-
poseÓ memory at densities greater than 16M. But initially, FRAM technology has been touted as
a replacement for both low-density EEPROM and flash devices in applications such as cell phones
and PDAs.
In late 1996, Hitachi unveiled its 256K FRAM manufactured on a sub-micron process. The com-
pany believes it has set the stage for a new mainstream memoryÑone that combines high speed,
lower power consumption, flexible interface, non-volatility, and high endurance. Volume pro-
duction of the device is slated to begin in 1H97. Initial pricing was set at $9 in quantities of 10,000.
Figure 7-41. What is Ferroelectric RAM (FRAM)?
For FRAMs to be a commercial success, Hitachi believes it must do three things well: first develop
a viable part in a density that users will consider; second, improve the FRAM technology through
die shrinks, increased endurance, and improved access time; and third, increase the density of the
cell structure so that 1M and 4M parts are available by the end of the decade.
VOLATILE MEMORY DEVICES
THE SRAM MARKET
Static RAMs (SRAMs) are memory devices capable of retaining their information at very low
power, without the need for periodic ÒrefreshÓ as in the case with DRAMs. SRAMs have been a
standard, commodity-type product, filling the memory needs of applications ranging from con-
sumer electronics to supercomputers.
For SRAM manufacturers, 1996 represented some of the grandest times and some of the lowest
times. In late 1995 and early 1996, SRAM suppliers were enjoying prosperity because demand for
their products outweighed supply. This situation was created when Pentium-based PC systems
started ramping in 1995. At that time, SRAM vendors were under the impression that up to 80
percent of Pentium-based PC systems would ship with cache memory. The anticipated demand
for cache SRAM caused suppliers to make as many parts as possible despite strained wafer fab
capacity. However, as the year progressed, more and more capacity, made available from a slug-
gish DRAM market, was given over to SRAM production.
Then, the nightmare started.
The acceptance rate of SRAM into level 2 (L2) cache in Pentium computers was much less than
expected. As it turned out, Pentium systems that shipped with cache SRAM were much less than
50 percent, not 80 percent as had been forecast. High-volume, low-end Pentium systems did not
need or use it.
Suddenly, SRAM supplies greatly exceeded demand and prices plummeted. Average selling
prices for cache memory dropped especially fast. For example, in mid-1995, a 1M synchronous
cache SRAM sold in the $20 range. By late 1996, the same device sold for less than $5.
For many vendors, the soft SRAM market made it too difficult to participate. The only alternative
was to exit the SRAM market altogether. Hardest hit were Taiwanese suppliers. Through 1996,
many of TaiwanÕs SRAM companies closed down after prices dropped due to the saturated market.
Figure 7-42 reviews the annual SRAM market from 1991-2001. After growing at a rather pre-
dictable rate for several years, the SRAM market exploded in 1995 with 62 percent growth. This
surge in 1995, as stated, was largely due to demand for anticipated synchronous cache memory.
ICE estimates the 1996 SRAM market was 21 percent smaller than in 1995. Forecasting out
through the next five years, ICE believes annual growth in the SRAM market will average 19 per-
cent. This factors out to an $11.3 billion SRAM market in the year 2001.
Quarterly SRAM dollar volume, unit volume, and ASP data from 1991 through 1996 is shown in
Figure 7-43. The rapid increase of ASPs that started in 1993 was due to many suppliers shifting
their manufacturing lines to run more profitable (at that time) DRAM products. Reduced SRAM
capacity resulted in reduced production of SRAMs, which led to increased prices.
The rapid decrease in average SRAM ASP during 1996 is attributed to many of these same sup-
pliers switching excess DRAM capacity back to the manufacture of SRAMs, which resulted in an
oversupply situation that characterized the market through most of 1996. ICE foresees a more
stable market and ASP conditions through 1997. Supply and demand are forecast to balance out
during the course of the year.
Figure 7-42. SRAM Market Growth
Figure 7-44 shows ÒmainstreamÓ unit shipments from 1991 through 1996. While high-density is
a key issue with several other memory products, it is not the highest concern for purchasers of
SRAM. In fact, as shown in the figure, the 64K and smaller category was the dominate category
in terms of unit shipments for many years. The 256K density had the highest shipment volume
beginning only in 1994. Also, the 1M density out-shipped 64Ks and became the second highest
shipped density in 1996.
Although density may not be a key issue with SRAMs, speed is. There are three speed classifica-
tions: very fast, fast, and slow.
Very Fast SRAMs
The very-fast SRAM market belongs to those devices with access times faster than 10ns. This seg-
ment of the SRAM market caters to high-end applications such as workstations or PCs with lead-
ing-edge processors. ICE estimates that approximately 60 percent of all SRAMs are made for the
PC market. Devices in this category are migrating toward denser and wider configurations and
also are moving from asynchronous to synchronous parts.
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
3.00
3.40
3.80
4.20
4.60
5.00
5.40
5.80
7.00
Figure 7-43. 1991-1996 SRAM Market
Very fast SRAMs are most often sold in 1M and 4M configurations. In 1996, OEMs moved away
from x8 products to devices with wider widths. Applications such as high-end PCs and certain
telecommunications uses require primarily x32 and x16 widths, respectively. As a result, compa-
nies such as IBM, Toshiba, and Mitsubishi developed high density (4M), wide (x16, x32), very fast
SRAM devices to meet the growing need in these markets.
Fast SRAMs
Fast SRAMs are those devices with speeds generally in the 10ns to 30ns range. In the fast SRAM
market, PC cache memory is the driving force. As microprocessors race to ever higher clock rates,
fast SRAMs represent a solid solution for retrieving memory at the rapid pace required by the
MPU. Here, as in the very fast segment, SRAM users and vendors are migrating toward syn-
chronous devices.
The Pentium Pro will initially have 256K of L2 cache memory and eventually 512K. The transition
to higher density cache will likely be slow and steady. The reason is cost. Doubling the cache
memory to 512K on a Pentium Pro nets about a one or two percent improvement in system perfor-
mance. The minimal performance gain is not justified by the extra cost (approximately $30 in 4Q96).
Figure 7-44. Annual Shipments of Mainstream SRAM
It is a different story in the PC-server market. Here, doubling cache memory can improve perfor-
mance five to 10 percent. In higher ticket items, the cost of adding additional cache memory can
be justified. Other markets for fast SRAM include multimedia computers and in networking
applications.
Slow SRAMs
Slow SRAMs are those that have access times slower than 30ns. These devices are beneficial
because of their low power consumption. Users also desire low standby current so that the device
does not lose both power between uses and data retention current. In 1996, approximately 70 per-
cent of the slow SRAM market was 5V parts, with 30 percent 3V devices. Some manufacturers
anticipate that 1.8V devices will be standard in the year 1999.
The driving application for slow SRAMs is cellular phones. Other end uses include all portable
data collection and storage devices.
Figure 7-45 shows ICEÕs estimate of
SRAM shipments by speed for 1996.
As shown, most fast SRAMs
shipped in 1996 were 256K and 1M
densities.
dramatic effect on cell size. Figure
7-46 shows cell sizes and other char-
acteristics of SRAM parts analyzed
in ICEÕs laboratory in recent years.
It is interesting to note that the die size of the only 4M part (ToshibaÕs CMOS SRAM date-coded
9509) was larger than an NEC 4M SRAM die analyzed a few years previous. In fact, ToshibaÕs 4M
cell size is actually larger than the cache SRAM on IntelÕs Pentium microprocessor.
As stated previously, cache SRAM represents one of the most active segments of the SRAM market
and offers good potential for growth. Depending on the applications, cache memory can increase
system performance by as much as 15 percent. Figure 7-47 depicts how cache memory has
become a more significant factor in PC systems. Most MPU bus speeds now require a second-level
cache built with fast SRAM to tap the full potential of the microprocessor.
Leading SRAM suppliers of 1995 and 1996 are shown in Figure 7-48. Slowing PC sales in the first
part of 1996 and plummeting SRAM prices throughout the year resulted in a reversal of finan-
cial fortunes for several SRAM vendors. The ÒhurtÓ was applied to both large and small SRAM
vendors.
64K
256K
1M
>1M
2%
15%
15%
1%
18%
31%
17%
1%
Figure 7-45. 1996 SRAM Unit Shipments Estimated by Speed
Nevertheless, most SRAM suppliers believe a rebound is due, especially for their cache memory
products, in 1997. Their optimism lies in the fact that Intel has been setting up a broad base of
cache SRAM suppliers to support the developing Pentium Pro microprocessor market.
SRAM consumption by geographic region is shown in Figure 7-49. A large portion of SRAM con-
sumption in North America was due to PC applications whereas SRAM consumption in Japan
and Europe was based more on consumer electronics and telecommunications related products.
HITACHI HM67W1664JP-12
Figure 7-46. Physical Geometries of SRAMs
Figure 7-47. Trend of PC Cache SRAM
Non Cache
With Cache
Standard SRAM
16-bit CPU
32-bit CPU
64-bit CPU
Sync. Burst SRAM
Year
SRAM production in 1996 is estimated to have remained firmly in control of Japanese suppliers
(Figure 7-50). With the strength of Hitachi, Toshiba, and NEC, ICE expects Japan to continue its
solid share of worldwide SRAM production.
Select SRAM vendor highlights are shown below.
Cypress
Cypress Semiconductor announced it would begin to ship slow-speed SRAMs in Japan. Japanese
vendors have shifted more of their SRAM production to fast-speed devices, which has tightened
supplies and created a new opportunity for the U.S. vendor.
1996 (EST) $4,805M
Figure 7-49. Worldwide MOS SRAM Consumption
Japan 21%
North America
1996 (EST) $4,805M
CypressÕs strategy is to become the supplier with the broadest portfolio of SRAM products. It has
developed several slow-speed versions of its high-speed SRAMs. Using its RAM3 SRAM process,
Cypress has combined high-speed with low standby power to its SRAM product listing.
Fujitsu
Fujitsu announced it would exit the SRAM market (as well as EPROM and ROM markets) and
instead focus its memory production on DRAMs and flash memory devices. With SRAM ASPs
sharply down, the value of FujitsuÕs SRAM production had shriveled. SRAM development work
at the company, however, will continue.
The company is among the leading suppliers of computers and has a need for SRAMs, especially
high-performance cache devices used in its supercomputers, mainframes, and servers. Fujitsu
stated that most of these parts are currently supplied by outside vendors.
Hitachi
Hitachi started production of two 1M synchronized high-speed SRAM models that are targeted
for engineering workstations and servers containing SPARC processors. The SRAMs have maxi-
mum access times of 4ns and are packaged in a plastic BGA, HitachiÕs first use of such packaging
technology for a memory device.
Integrated Device Technology (IDT)
Following a solid sales year in 1995, IDT was hit hard by the drop in SRAM average selling prices.
Pricing on several of its best selling commodity SRAMs dropped by more than 80 percent during
1996 and showed no sign of recovery. Adding to IDTÕs financial strain was the significant increase
in operating costs due to its new wafer fabrication plant in Hillsboro, Oregon that came on-line in
mid-year.
In a strategic shift away from its reliance on the PC market, IDT announced it would move aggres-
sively into the communications applications market. The company introduced an SRAM archi-
tecture called zero bus turnaround (ZBT) that it claims will double the current switching speed of
telecom and datacom operations.
Motorola
Motorola desires to expand its SRAM capacity despite the price drops and supply glut that
occurred in 1996. To improve its competitive position, Motorola will introduce several new prod-
ucts that take advantage of the companyÕs strength in DSP and communications technologies.
One of those devices was the companyÕs late-write fast SRAM that started shipping in 1M and 4M
densities in 4Q96. These devices are designed to operate at the same clock speeds as high-end
microprocessors, initially running between 143MHz and 200MHz with a road map to 500MHz.
Paradigm
Paradigm is another SRAM supplier that was hit especially hard by the drop in prices during the
year. Its 3Q96 revenue was 63 percent less than in 3Q95.
To return to profitability, the company revealed a plan to change its business model by becoming
a fabless high-speed SRAM supplier. It sold its San Jose fab in 4Q96 for $20 million. The company
hopes that by being a fabless supplier, it will better withstand fluctuations in the market, reduce
fixed manufacturing costs, and be provided with additional working capital.
Toshiba
Toshiba continued to pursue the high-speed and low-voltage SRAM business when many others
slowed or halted development efforts. Hoping to get a jump on its competition, the company
announced several new high-speed cache SRAM chips in 4Q96 that will keep pace with next-gen-
eration processor, including IntelÕs Klamath, the successor to the Pentium Pro.
THE DRAM MARKET
The DRAM market has been through many up and down cycles as shown in Figure 7-51, but few
suppliers recalled demand ever being as strong over such a long period of time as it was during
the period from 1992-1995. For the huge DRAM market to grow by such large percentages over a
several year period was quite remarkable.
However, as the graph shows, good times donÕt last forever. Certainly, 1996 was evidence of that.
Excess capacity and plunging average selling prices resulted in an estimated 38 percent decline in
the DRAM market. Fortunately, recent DRAM market history shows that negative growth has
lasted one or, at the most, two years, while positive growth periods have been three or four-plus
years in duration.
1977-1980 1981-1984 1985-1989 1991-1995
4.4X 5.91X 5.65X 6.18X
4.4X 5.91X 5.65X 6.18X
Figure 7-51. DRAM Market History
Figure 7-52 shows DRAM market trends on a quarterly basis beginning in 1991 and extending
through 1996. The dramatic upswing in market size and ASPs beginning in late 1992/early 1993
contrasts sharply with market conditions in 1996. The market and ASP plots first reflect the
unprecedented worldwide demand for DRAM memory and the industryÕs inability to adequately
supply the market with all the units it demanded. In 1996, with plentiful DRAM capacity, ASPs
plummeted and caused the market to severely erode as well.
The DRAM market grew from 14 percent of the total IC market in 2Q91, to a high of 35 percent of
the total IC market in 4Q95 when ASPs for 4M and 16M devices peaked (Figure 7-53). Amazingly,
in the span of one short year, the DRAM market contracted to represent only 16 percent of the total
IC marketÑa value not seen since the late 1991/early 1992 time frame!
The annual DRAM market history and forecast through the year 2001 is displayed in Figure 7-54.
After growing at a cumulative annual growth rate of 58 percent from 1991-1995, ICE forecasts the
DRAM market to ÒcoolÓ to a 24 percent CAGR from 1996-2001. In 1995, the DRAM market was a
$41 billion market. Following the ÒcorrectionÓ year of 1996, ICE does not anticipate the DRAM
market growing to that size again until 1999.
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
11,000
12,000
13,000
4.00
5.00
6.00
7.00
8.00
9.00
10.00
11.00
12.00
13.00
14.00
15.00
16.00
17.00
18.00
19.00
20.00
Figure 7-52. 1990-1996 DRAM Market Trends
Figure 7-55 provides a look at the unit shipments for the key DRAM densities during the 1991-
1997 time period. The 1M density followed a long, slow decline on its way out of the market spot-
light after peaking in 1991. 4M shipments topped out in 1995. Despite the fact that PC users are
moving to 16M devices, huge numbers of 4M devices were again shipped during 1996. Higher-
density, 16M devices are forecast to out-ship all other densities in 1997. ICE anticipates that the
peak shipment year for 16M DRAMs will be 1997.
2Q 3Q 1Q
Figure 7-54. DRAM Market Trends
6,605 8,525 13,140 23,420 40,835
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
20012000199919981997199619951994199319921991
13033T
Year
M ill
io n
s o
f D
o lla
–38% 2% 30%22% 34% 35%
DRAM Market ($M)
ASP trends for several DRAM densities are provided in Figure 7-56. It is interesting to note the
fact that demand at the 4M level kept ASPs elevated and essentially flat for four years (1992-1995).
As witnessed in the 1M generation during 1989-1990 and in the 4M generation during 1995-1996,
when ASPs fall, they fall fast and they fall far. A bit unexpected, perhaps, was the way that prices
for the 16M generation (which stayed at approximately four times the 4M DRAM ASP) followed
right in step with the 4M decline.
As Figure 7-57 shows, the ASP decrease during 1996 was anything but gradual. Monthly ASPs for
4M and 16M DRAMs fell dramatically during the year. ICE estimates 4M DRAM ASPs fell 75 per-
cent and 16M DRAM ASPs 78 percent during 1996.
Although there may be some momentary upticks in pricing, ICE does not anticipate DRAM ASPs
to solidify during 1997. Additional fab capacity and continued demand will keep pricing pressure
on all densities of DRAM during the upcoming year. The DRAM buyersÕ market should continue
throughout 1997.
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
2,200
1997199619951994199319921991
Year (EST) (FCST)
Figure 7-55. DRAM Unit Shipments (By Density)
A comparison of annual DRAM bit volume and market growth (Figure 7-58) shows that DRAM
pricing is very dependent on wafer fab capacity. DRAM bit volume is shown increasing by at least
70 percent each year from 1994 through 1997. On the other hand, market growth was very strong
in 1994 and 1995 when DRAM wafer fab capacity was in short supply. Overcapacity in 1996
forced ASPs downward and the market collapsed. In 1997, bit volume is forecast to remain strong,
but ICE believes there will continue to be an excess supply of DRAM fab capacity, which, in turn,
will keep ASPs from rising and result in the market growing only two percent.
Figure 7-59 shows the annual increase in DRAM bit volume during the 1991-2001 time period.
During this time, annual DRAM bit volume is forecast to increase an average of 69 percent per year.
1.45
1.70
3.01
11.72
205.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
10.00
11.00
–40
–30
–20
–10
0
10
20
30
40
50
60
70
80
1994 1995 1996 (EST)
74%
Figure 7-59. DRAM Bit Volume (1012)
0
50,000
100,000
150,000
200,000
250,000
300,000
20894BSource: ICE, "Status 1997"
Bit Volume Percent Change
Figure 7-60 summarizes the DRAM market size, unit shipments, and ASPs for five of the most
popular DRAM densities. Although it will ship many more units than any other density, ICE esti-
mates that 4M DRAMs lost their market dominance to the 16M density in 1996. ICE estimates that
despite the fact that DRAM unit shipments increased nine percent in 1996, the DRAM ASP
declined 44 percent and the overall market slid 38 percent.
As was the case through the first portion of the 1990Õs, DRAM consumption (Figure 7-61) was led
by the North American region with an estimated 38 percent of the 1996 market. Consumption of
DRAMs in the ROW region (mostly Asia-Pacific countries excluding Japan) first surpassed JapanÕs
consumption in 1992. Strong consumer electronic consumption in the developing economies of
the region along with PC-related work (assembly, packaging, test) will continue to increase con-
sumption in this region.
Japan 20%
North America
Although their marketshare has dropped considerably since 1991, DRAM production remained
firmly in the hands of Japanese companies (Figure 7-62). The biggest threat to JapanÕs production
lead comes from the ROW region (specifically, Korean companies), which continued to build more
facilities at home and abroad to harvest additional marketshare.
Shown in Figure 7-63 is ICEÕs esti-
mate of the leading DRAM suppli-
ers for 1996. One reason why the
top ten players accounted for the
overwhelming majority of sales was
that marginal players fled the
market or switched to producing
other ICs once DRAM profit mar-
gins became extremely lean. And
why not? Even though the loss was
painful, large DRAM suppliers
units in 1996, yet come up with
about $1-$2 billion less in revenue.
For the small or marginal DRAM
supplier, a proportionate reduction
more devastating.
Japanese Companies
Figure 7-63. 1996 DRAM Sales Leaders
20875BSource: ICE, "Status 1997"
(EST, $M) Company
Amid the weakened DRAM market, suppliers looked for other ICsÑany ICÑthat returned a
greater profit margin than standard DRAMs. One device that caught the attention of a host of
vendors including IBM, Fujitsu, Hitachi, Hyundai, Micron, NEC, and Samsung was the synchro-
nous graphics RAM (SGRAM). And for good reason: margins for SGRAMs ran as high as 30 per-
cent more than standard DRAMs. Moreover, PC OEMs began to implement the part instead of
VRAM for video/graphics applications. With more acceptance and healthy profit margins, sev-
eral DRAM vendors rallied behind the part.
Along with developing and marketing more profitable DRAM devices, several vendors in recent
years have elected to expanded their product offering of non-memory ICsÑespecially those tar-
geted for emerging applications. For instance, each of KoreaÕs three leading IC suppliers is heav-
ily involved in developing telecommunications, multimedia, and logic chips. Samsung also
introduced a cell-based ASIC line that includes up to 1M of on-chip DRAM. Texas Instruments
continued to expand its DSP efforts and many Japanese firms continued to broaden their influence
in the RISC microprocessor and microcontroller markets.
Specialty Memory
A typical PC sold in 1996 devoted roughly 98 percent of its silicon area to memory. Nearly all of
that memory was DRAM. PC makers have started to realize that 24MB (even 32MB) should be
the standard amount of memory for 32-bit operating systems. High-speed processors need that
much memory to operate to their full potential. According to a Samsung study, a 200MHz
Pentium Pro PC with 32MB of memory performed 44 percent faster than a system with 16MB. For
64MB, the speed boost was 63 percent. For Samsung, the results show that PC OEMs should be
building their systems with 32MB of memory.
While the amount of memory is one issue, the type of DRAM is also becoming a critical element for
vendors to consider. Until recently, all DRAMs were made using the same fast-page mode (FPM)
architecture. But, with faster processor speeds and more video/graphics applications the need for
new and improved DRAMs architectures emerged. Numerous alternatives now exist including
enhanced DRAM (EDRAM), multi-bank DRAM (MDRAM), and intelligent RAM (IRAM).
Though there are numerous alternatives, three architectures appear to be the main contenders to
grab the largest share of the specialized memory market. Figure 7-64 shows three newer archi-
tecturesÑextended data out (EDO) DRAM, synchronous DRAM, and Rambus DRAMÑand how
they are forecast to influence the market in the coming years.
EDO DRAM
EDO DRAMs are an extension and enhancement of fast-page mode devices. They represent a
cheap, quick way to increase microprocessor and system performance. In 4Q96, Samsung intro-
duced a 4M EDO DRAM family that featured access times of 35ns, 40ns, and 45ns. The high-den-
sity and fast access times that characterized the family make them ideal for hard drive, graphics
boards, and printer applications. Also, TaiwanÕs Powerchip Semiconductor introduced, and
started to ship in volume, its 16M EDO DRAM in 4Q96.
For many OEMs, EDO DRAMs are a temporary solution to improve speed until a final decision
is reached regarding whether to use SDRAM or other DRAM alternatives in a system.
Synchronous DRAM
As the name implies, synchronous DRAMs work in synch with the microprocessor clock to
retrieve data stored in memory much more quickly than an asynchronous, fast-page mode
DRAM. SDRAM prices were at or nearly-even with EDO DRAMs toward the end of 1996. That
made them attractive to PC manufacturers. The PC buying spree that often characterizes the
Christmas holiday season may have initiated the era for SDRAMs in 1996.
Fast Page Mode
Figure 7-64. DRAM Shipments by Architecture (Percent, $)
Manufacturers including Hitachi and Texas Instruments believe the move to SDRAMs started in
4Q96 and have ramped production of these devices. Hyundai also put its weight behind syn-
chronous DRAMs and sampled a series of 16M devices in various configurations during 4Q96.
The company also provided engineering samples of 64M SDRAMs. Additionally, Hyundai agreed
to cooperate in the development of the next-generation 64M SDRAMs with Fujitsu.
At one point, SDRAMs commanded a price premium over EDO and fast-page mode DRAMs. In
1996, these devices were also hit by steep price declines even though the market for them had not
yet matured. In mid-96, many leading Japanese DRAM manufacturers stated that price premiums
associated with SDRAMs were only five to ten percent more than EDO DRAMs, which experi-
enced their own severe price erosion.
Rambus DRAM
The Rambus DRAM (RDRAM) continued to make inroads in the graphics arena. The Rambus
DRAM provides a wide path for fast data transfer between the memory and the processing seg-
ments of a system.
Rambus licensed the top five DRAM manufacturers (and several others) to use its technology. The
company charges a flat Òengineering feeÓ to customize its interface to a memory vendorÕs exist-
ing product. Vendors then pay royalties based upon the actual selling price of the Rambus DRAM.
Frustrated by disappointing royalty revenue and a weak memory market, Rambus reportedly put
pressure on its licensees to design more products that use its technology. Most DRAM vendors,
on the other hand, claimed they bought the technology to use as an alternative depending on
which direction the memory market went in the coming years.
An alternative to the Rambus DRAM is SyncLink technology. SyncLink provides many of the
same benefits (i.e., high bandwidth for speedy data transfer) as Rambus technology. However,
SyncLink does not require a license or royalty payments. Many of the same companies that signed
on with Rambus also promote SyncLink. Siemens (which does not support Rambus) signed on
with SyncLink in 4Q96.
4M DRAMs
Although the 4M DRAM market declined an estimated 62 percent in 1996. 4M devices outpaced
other DRAM densities in terms of unit shipments. ICE estimates that 1.5 billion 4M units were
shipped in 1996, a decline of nine percent.
Though the luster faded from the 4M market, PC OEMs and consumers wishing to upgrade their
system memory took advantage of the long-overdue low prices and filled their computers with
additional memory, extending the demand for 4M devices through 1996 (Figure 7-65).
Another reason that the 4M density continued to ship in high volume was that several vendors
transitioned to EDO versions rather than stick with fast-page mode devices. Samsung and Oki
were two vendors to announce high-speed, wide (x16, x32) 4M EDO DRAMs.
At Micron, the company built 4M DRAMs using its new 0.35µm process technology. It stated the
process was very cost effective and that the company could easily transition to 64M manufactur-
ing whenever that market develops.
Mitsubishi enhanced its 4M DRAM portfolio by announcing a version that operated on 2.7V. The
device is scheduled to begin sampling in January 1997. Built using an 0.8µm process, the new chip
features 70ns access time and is targeted for battery-powered, portable applications such as PDAs,
camcorders, and mini disk players.
ICEÕs estimate of the top 4M DRAM suppliers in 1996 is shown in Figure 7-66. Revenue gener-
ated by 4M DRAM suppliers in 1996 dropped sharply. As previously stated, watching ASPs fall
and missing out on several hundred million (even more than one billion) dollars worth of revenue
had to sting many of the suppliers of 4M DRAMs in 1996.
M ill
io n
s o
f U
n it
ASP
Units
$11.50
125.5
$2.90
127.9
110
120
130
140
150
160
Figure 7-65. Lower Prices Extend 4M DRAM Demand
The Òbig fiveÓ suppliers from Japan (NEC, Hitachi, Toshiba, Mitsubishi, and Fujitsu) initially
reduced 4M shipments in 1Q96. By the end of the year, each had lowered 4M output by approx-
imately one-third. Other Japanese manufacturers such as Oki slashed 4M DRAM production 60
percent in 1996 compared to 1995. Though there was plenty of demand for 4M DRAM devices,
these and other suppliers quickly shifted to 16M production.
16M DRAMs
16M DRAM demand took a sharp upswing in 1996 as prices dropped for this density as well.
Greater affordability and availability of the wide configurations helped to jump start this market.
Figure 7-67 compares the rise in 16M DRAM demand with the fall of ASPs during the first three
quarters of 1996.
Figure 7-68 shows ICEÕs estimate of the leading 16M DRAM suppliers during 1996. Samsung
established an early lead in this segment and has managed to maintain its leadership as this
market has matured. NEC, meanwhile, desired to match SamsungÕs aggressive 16M DRAM
schedule. It planned to transition all its U.S.-based DRAM manufacturing to 16M production by
the end of 1996.
There remains much uncertainty about whether suppliers will reduce 16M output and shift to
64M production or whether 16M production will be reduced to drive up ASPs. Micron, for one,
believes that although margins are very thin, suppliers may have to get used to the idea of less-
than-expected profits for some time. The company expects that the 16M market will be around
for at least as long as the 4M generation.
In the meantime, vendors continued working on ways to bring new and improved versions of the
16M device to market. Fujitsu accelerated its drive to shrink 16M DRAM size in order to lower
production costs. The company currently manufactures 60mm-square chips using a 0.36µm
process. It hopes to reduce that to a 40mm-square chip using a 0.28µm process by early 1998.
Others 50%
Micron 12%
Hyundai 11%
Figure 7-66. 1996 Leading 4M DRAM Suppliers (EST)
Production of 16M DRAMs began in earnest in Taiwan during 4Q96. Nan Ya Technology started
volume shipments of a 16M (4 x 4) EDO DRAM family from its new 200mm fab. The devices are
manufactured using 0.4µm technology. The company plans additional configurations for 1997.
While it obtained its technology from Oki and will produce DRAMs for the Japanese company,
Nan Ya will also sell its products on the merchant market using its own logo.
TaiwanÕs Powerchip Semiconductor also initiated 16M EDO DRAM production and expected to
be producing devices at the rate of one million units per month at the end of 1996. Powerchip,
formed in late 1994, obtained it 16M and 64M DRAM technology from Mitsubishi. It will sell 50
percent of its output to the Japanese company, with the remainder dedicated to several Taiwanese-
based firms.
Figure 7-68. 1996 Leading 16M DRAM Suppliers (EST)
$15,765M
Others 32%
Samsung 21%
NEC 15%
Toshiba 10%
Hitachi 13%
Hyundai 9%
M ill
io n
s o
f U
n it
ASP
Units
$43.25
47.7
$9.70
106
0
20
40
60
80
100
120
Figure 7-67. Lower Prices Increase 16M Demand
Hyundai is bullish on the synchronous DRAM market and in 4Q96 released its 16M SDRAM.
Configured in x16, x8, or x4 versions, the device is expected to help improve Pentium Pro perfor-
mance by as much as 20 percent compared to conventional EDO DRAM. Hyundai plans to
expand its SDRAM product line in 1H97 with the introduction of a 64M SDRAM.
Some DRAM suppliers looked to more lucrative opportunities such as combining memory and
logic on a single chip. Though there are several crucial technological and manufacturing hurdles
to overcome, the idea of memory and logic on one chip is intriguing to OEMs and suppliers.
Immediate benefits of incorporating both technologies on one chip include higher bandwidth
(great for graphics applications) and the obvious board space savings. Figure 7-69 shows a sam-
pling of DRAM/Logic devices that have recently been introduced.
64M DRAMs
While the 16M DRAM is in the growth stages of its lifecycle, the always forward-looking IC sup-
pliers have already ramped limited production of 64M DRAMs. The marketÕs first 64M DRAM
engineering samples, fabricated in 0.32µm processes, emerged from DRAM leaders NEC and
Samsung in 2Q95. Since then, other vendors have added their parts to the list of available 64M
DRAMs. Figure 7-70 shows various characteristics of 64M DRAMs examined by ICE during 1995
and 1996.
64M DRAMs arrived on the market in volume in 1H96,Ña time when overall memory prices were
dropping quickly. Several companies, responding to the rapid decline in prices for 16M devices,
disclosed plans to ramp up 64M DRAM production. While the move makes sense in the short-
term, it is not without risk. If too many suppliers ramp up too quickly, the price-per-bit of 64Ms
could drop quickly and deprive the overall industry of the high margins it has come to expect at
the beginning of a DRAM product lifecycle.
"Media Chip"
32-bit RISC processor (54 Mips at 66MHz) and 16M DRAM. Device is built using 0.45µm, two-layer metal technology. Die size: 153.7mm2. Available now.
Parallel-image processing (PIP) RAM for real-time image processing applications. PIP-RAM integrates 16M DRAM and 128 8-bit processors. In development stage.
Prototype optimized for 3-D graphics. The device integrates four 2M DRAM macros and four pixel processors.
Source: ICE, "Status 1997" 21211
Figure 7-69. Companies Explore DRAM/Logic on Same Chip
Moreover, some have argued that
there may not be that many high-
volume applications for 64M
DRAMsÑat least not yet.
Nevertheless, the 64Ms keep
review of year-end 1996 production
targets for some of the leading 64M
DRAM manufacturers.
from Japan and Korea have dedi-
cated substantial funding for 64M
DRAM development, Taiwanese
cant role in the 64M DRAM market
as well. Figure 7-72 reviews a few
of the plans by Taiwanese compa-
nies regarding 64M DRAM production.
Hitachi Die Size: 445 mils x 800 mils = 356K mils2
Feature Size: 0.35µm Memory Cell Area: 0.9µ x 1.8µ = 1.62µ2
Package: 34-pin 500 mil plastic SOJ
Mitsubishi Die Size: 416 mils x 810 mils = 337K mils2
Feature Size: 0.35µm Memory Cell Area: 0.9µ x 1.8µ = 1.62µ2
Package: 34-pin 500 mil plastic SOJ
Samsung Feature Size: 0.32µm Access Time: 50ns or 60ns Package: 34-pin 400 mil plastic TSOP or SOJ
NEC Die Size: 251K mils2
Feature Size: 0.35µm Package: 34-pin 400 mil plastic SOJ
Fujitsu Die Size: 360K mils2
Feature Size: 0.35µm
Feature Size: 0.35µm Access Time: 60ns
19810ASource: ICE, "Status 1997"
Samsung
21206ASource: ICE, "Status 1997"
A sampling of highlights from the 64M DRAM market are shown below.
¥ Fujitsu moved its 64M DRAM ramp schedule forward. It has decided to boost output to 1.5
million units per month by the end of 1997. It plans to cancel 16M DRAM production at its
Gresham, Oregon plant and instead launch 64M fabrication.
¥ Hitachi and the Singapore government formed a joint venture that will invest nearly $1 bil-
lion to build a 64M DRAM fab in Singapore. The facility will have the capacity to produce
20,000 200mm wafers per month using 0.35µm process technology. Production is slated to
begin in the second half of 1998.
¥ Toshiba initiated shipments of its 64M DRAM available in 16M x 4, 8M x 8, or 4M x 16 orga-
nizations. EDO and synchronous versions of the device are in final development and slated
to be introduced in 1Q97. Toshiba uses a trench memory cell design for its 64M DRAMÑa
design that will also be used for its 256M DRAMs. The company will also begin using
0.25µm process technology to produce the 64M DRAM as it results in a nearly 50 percent cost
reduction compared to the 0.35µm process.
Company Design
Development First
Shipments Comments
ProMOS Technology, based in Hsinchu, is the name of the joint-venture between Mosel-Vitelic and Siemens. Siemens will hold a 38 percent share, Mosel- Vitelic 62 percent.
Will sell DRAMs under its own logo, but with technology licensed from Oki. Building its initial 200mm wafer fab near Taipei.
Japan's Mitsubishi and Kanematsu have one-third ownership in Powerchip.
TI sells the output under its own logo. Spending $1.2 billion to build a 64M DRAM fab in Taipei. Operations are due to begin in the spring of 1997.
Formerly government sponsored Industrial Technology Research Institute. First Taiwan-based company to develop and show a full

Section 7 MOS Memory Market Trends

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