AMD, Hyundai settle flash squabble

Electronic News, Nov 25, 1996 by Crista Hardie

San Jose, Calif.--A legal settlement that avoids pending litigation between Advanced Micro Devices and Hyundai Electronics America over flash memory trade secrets has also cleared the way for the companies to duke it out for a share of that market, even though some industry observers are projecting the flash segment may become as oversupplied next year as the DRAM market is today.

Terms of the settlement are under seal, but are said to include injunctive relief protecting AMD's flash memory technologies.

A preliminary injunction by the Superior Court for Santa Clara County earlier prohibited five former AMD employees from performing certain job duties at Hyundai that could compromise AMD's flash memory "recipes" (EN, April 15). Upon settlement of the basic issues recently, Hyundai withdrew its appeal of that order.

Because of the confidential terms of the settlement, neither company would discuss specifics of the suit. Suffice it to say that "AMD is thrilled" with the outcome, said Gary Weiss, intellectual property litigator with Orrick, Herrington and Sutcliffe, the firm that represented AMD in the case.

Hyundai, also satisfied with the results, indicated its flash memory development efforts have not been deterred.

"Nothing in the settlement prevents us from moving full steam ahead. We have aggressive plans to introduce several generations of flash products in the coming months," said Steve Grossman, senior VP of marketing for Hyundai's flash division, in an interview. Mr. Grossman is one of the dozen or so AMD employees recruited by Hyundai last year, and one of the defendants in AMD's second amended complaint, which is not under court seal.

"As a result of the settlement, Hyundai agreed not to use (AMD's) legitimate trade secrets. That actually makes things very clean for us, because we know precisely what we can and can't do. And, in general, our policy is to respect other companies' trade secrets."

Under the April 5 preliminary injunction, Arthur Wang, Yuan Tang, Shengwen Luan, J.C. Young and Ken Miu were enjoined from disclosing AMD-proprietary information that could help Hyundai recruit AMD personnel, and from disclosing the recipes for AMD's CS-29, CS-39, CS-49 flash manufacturing processes and other patent-pending technologies. In addition, they were enjoined from working on any phase of Hyundai's S-1 and S-2 processes dealing with specific design techniques for single-voltage NOR-type flash devices.

Hyundai's Mr. Grossman said that company did not need the processes named above to proceed anyway. "So it doesn't have any affect on our plans or our employees," he said.

In early 1Q97, Hyundai plans to introduce a family of single-voltage NOR-type devices at the 0.8- and 0.6-micron levels, processes which Mr. Grossman said were developed by Hyundai in Korea prior to the Flash Memory Division's being established (EN, June 12, 1995), but will be marketed here by the flash division.

The U.S. division, which was set up to challenge the flash market leadership of Intel and AMD, is more tightly focused on developing single-voltage NOR-type devices at the 0.35-micron level--the technology AMD apparently was concerned about. Those devices are slated for introduction around the end of 1997, Mr. Grossman said.

Meanwhile, the flash memory market could use a hot new application to reignite it. A year ago, flash was in short supply, so a number of suppliers budgeted huge investments to bring on flash capacity, while newcomers--like Hyundai--also jumped into the market. According to an International Data Corp. report, however, flash memory next year may be as oversupplied and underpriced as DRAMs have been this year if PC and cellular phone consumption slacks off (EN, Sept. 30).