SGS-Thomson in flash deal backing AMD

Electronic News, June 20, 1994 by Katie Hottinger

SUNNYVALE, CALIF.--SGS-Thomson Microelectronics and Advanced Micro Devices will sign an agreement today to ensure alternate sourcing of AMD's single-volt Am29Fxx Flash architecture and develop future 5-volt and 3-volt Flash products.

The agreement, the first of its kind between the two competitors, is one they both believe will make the sector architecture an industry standard among customers looking for single-volt operation. The technology has already obtained JEDEC standard approvoal, AMD said.

AMD entered an agreement with Fujitsu in 1992 through which the Japanese company signed on to second-source the technology (EN, July 20, 1992). It is scheduled to be on-line with the technology and producing volume quantities of the chips this year.

"With three guys like us, there will be no other standard," said Steven Grossman, marketing director for AMD's Non-Volatile Memory Division, referring to production by AMD, Fujitsu and SGS-Thomson.

AMD and SGS-Thomson suggested the Am29Fxx architecture will eventually carry the bulk of future flash business, citing Scottsdale, Ariz.-based market analysis firm In-Stat which said the technology will garner about half the flash market's projected $2 billion in sales by 1997. In addition, In-State projects flash based on Intel's mixed 5- and 12-volt 28F architecture will fall from $800 milion by the end of this year to less than $600 million by 1997.

Among the advantages of its architecture, AMD claims: a reduction of system-level costs by eliminating the need for an additionl power supply or DC/DC converter; a sector erase architecture allowing frequent update of sectors in applications requiring large amounts of memory and protection of code blocks in embedded applicatoins; and embedded algorithms to automate the erase and program operations on-chip, freeing the CPU from dedicated control during write operations.

Intel, for its part, is less pessimistic about the future of its own architecture, and points to AMD's plans to continue producing devices based on the 28F architecture it calls out-moded.

"It's interesting," an Intel spokesperson said. "They're wanting to establish a new standard for flash, but at the same time are continuing support for Intel-based products. It looks like they're hedging their bets."

AMD and SGS-Thomson, which did not disclose the financial details of the agreement, said it was their customers--looking for a relatively inexpensive, single-volt flash devices--who suggested the two approach each other to ensure supply of the part.

"We independently found customers wanted a solution like this," SGS-Thomson said. "We began discussing a few years ago a single-volt flash solution. In the end, the customer wants something cost-effective, a commodity-driven product."

"We have the same customer base," Mr. Grossman added. "The customers came to us and asked us to approach SGS-Thomson. The world wants people who can really produce a lot and SGS has some customers who need a lot of the product."

AMD and SGS-Thomson predict that as a result of their agreement, single-voltage flash will become a true commodity part, with its cost per megabyte falling beneath that of DRAM by the end of the year.

Mr. Grossman also foresaw licensing of the technology by Japanese memory producers, that have yet to become serious players in the flash market. AMD and Intel have so far dominated the market, combining to make up about 80 percent of the flash business, Mr. Grossman said. Atmel is the third largest flash producer.

"This deal will help (the Japanese) out," Mr. Grossman said, "because now they'll know the type of architecture to produce."

Walt Lahti, an In-Stat analyst of the non-volatile memory market, said in light of Intel's unforeseen shortage of flash devices a year and a half ago (EN, Nov. 23, 1992), the alternate sourcing of AMD's flash technology will find favor of some customers looking for assured supply.

"From a user standpoint, there is an advantage to using a technology that works and has an alternate source," Mr. Lahti said. "(The AMD and SGS-Thomson deal) will have some impact, but it's not going to put Intel out of business.