IMFT to 34nm NAND production: Micron and Intel, two partners in NAND Flash Manufacturing IMFT JV, announced an industry-leading 34nm NAND flash product launch yesterday, in a 172 sq mm 32Gb MLC NAND flash die, that catapults them into the process geometry lead among NAND makers, and thus completes the IMFT Business Launch phase, which began 11/05 with the announcement of their IMFT Joint Manufacturing venture.

They have working 34nm silicon in the hands of key customers and flash controller makers, and will ramp the process and product, using essentially the same 50nm tooling, beginning immediately.

In the meantime, they have marshaled the considerable resources of both players, usefully absorbed idle capacity at Micron’s Manassas, Boise and Lehi fabs, and built out Manassas and Lehi with state-of-the art 300mm/50nm process tools. They also have brought a greenfield fab shell to “equipment readiness” in Singapore, established a NAND market presence for both parties, incl. flushing out former NAND suppliers from Micron’s down-channel retail “Lexar” brand flash chips. Both companies’ sights are set clearly on the nascent SSD marketplace. Intel’s very deep IP portfolio and experience in EPROM/Flash multilevel cells is now combined with Micron’s penchant for low cost manufacturing, to make a formidable competitor in the NAND Flash marketplace. In the present quarter, 2Q08, IMFT’s partners, Intel and Micron, are expected to sell more than $500M in NAND flash, taken to market ~50-50 by Intel and Micron. This is still way behind Samsung, Toshiba/SanDisk and Hynix in volumes, but safely in fifth place, with arguable advantages in process ground rules and technical know-how, plus product quality and QOS for the demands of the SSD marketplace.

They have come a long way in a short time, but, as if oft said, “The past is merely prologue” for what lies ahead. For chips, and especially memories, “What will you do for me tomorrow?” always combines with “past performance is no guarantees of future returns.”…so what they have is now an even start.

IMFT is now in the running in the NAND Flash market in a big way, if not in total volume and market standing, then certainly in terms of demonstrated technology. They have come a long way from a dead start and empty fab shells only a little more than 24 months ago.

Fabs and capacity: Micron has a higher percentage of their NAND flash capacity running on 300mm wafers than any other NAND maker, having upgraded their existing 200mm capacity, exc. Boise, which remains 200mm. Increasingly, the superior production of 300mm wafers is seen as a sine qua non of memory manufacturing, and more for NAND than DRAMs, which continue to have legacy and differentiated products that can be made cost-competitively on back generation tools and processes.

Today, Micron has about 100K/mo. wafer starts (300mm =), in its Lehi, Boise and Manassas fabs. With Singapore, which is now slated to start ramping by mid-2009, they will be adding 60K/month more when fully ramped in mid-2010.

Production volume: With most of their output today being built with 50nm processes (the remaining 15% is 72nm), IMFT appears to have about 13-15% share of GB shipments and a similar fraction of NAND revenues. Their GB fraction is somewhat depressed by their late entry into MLC NAND flash, based on their share of wafer starts, but this will be worked through in coming months, and subject to their customers’ requirements for either MLC or SLC. One of Intel’s and Micron’s strategic target markets is SSDs, which themselves are caught somewhere between needing SLC and satisfied with MLC, provided performance and endurance issues are suitably hidden behind controller and error-management software in the controller.

Downstream channels: SanDisk claims the high ground here, with the only silicon-maker recognizable name to the general public besides “Intel”. But Lexar, which became a part of IMFT at its conception, is a substantial player on the retail shelves of Best Buy and Circuit City, and Crucial (Micron’s internet downstream DRAM DIMM provider) both give IMFT/Micron direct lines into the retail channel. This can give them more assured homes for their product output, end-market pricing flexibility, the ability to manage their inventories with price adjustments at the retail channel. This is NOT seen as a way to ‘cut out the middleman’s profits’, as some claim, since Micron IS the middleman and the middleman always has to get paid, whoever it is. It is much more a “product flow control issue”…

Process and technology; controller technology, MLC: The initial pooling of interests between Intel and Micron when IMFT was launched had both parties putting in some funding, Intel putting in its NVM IP, Micron transferring NAND designs to Intel (some kind of contribution-balancing and financial shenanigan for patent protection and ‘contribution balancing’), and Micron transferring ownership of a nearly-unused Lehi fab (built in 1995, and moth-balled 1/1/96), the vacant half of their Manassas Fab (bought from Toshiba in 2002 to make DRAMs and never fully built-out), as well as an offer of their original Boise, Idaho fab to make NAND on 200mm wafers. They steadily brought their technical horsepower to market, one stage at a time, moving from 72nm process (well behind the market) to 50nm about 18 months ago (arguably leading edge) to their 34nm process announced 5/29. They delayed the ramp of MLC NAND until early this year, though the basic technologies were understood well before that, so as not to confuse the technical challenges they faced at any given time.

Both parties have flash controller capabilities and Micron has been shipping Managed NAND since the beginning of the IMFT Venture. They will sell raw NAND wafers, die and packaged NAND modules, plus NAND assemblages with controllers, depending on the customer and application. They also have a stable of third party NAND flash controller makers with whom they work. The sense within the industry is that controller makers MUST have access to the NAND silicon to make important design decisions such as use of ECC and wear-leveling strategies.

All in all, this has been a remarkable feat for IMFT, investing into a market of plummeting flash prices, bringing up and stabilizing all the various technical processes, and getting into competition even with a years-late start, against some of the most agressive technical horsepower in the industry today.

Now the real action starts.