Frequent readers of the Semico Spin know that I am a fan of ComicCon and attend it in San Diego, CA during my family vacation.  This is the fifth year in a row if I remember correctly which we attended.  As I say every year, there were more geeks than you can shake a light saber at.

 For those unfamiliar with ComicCon , it is the largest convention for comic books in the world.  However, it covers a great deal more.  Science fiction and fantasy TV and movies are heavily represented.  These are usually tied in with comics and animation.  There is also a strong tie in with video games.  For the first time in its history ComicCon was sold out for all four days with attendance of 125,000 each day.  It is the largest convention through out the year for the city of San Diego.

ComicCon 2008

 No, I did NOT go in costume, though there were plenty of interesting sights.  There were the usual Star Wars storm troopers of various types, including the Elvis storm trooper and this year the Burger King storm trooper.  At ComicCon one sees the rich source material for new entertainment.  This is very important for the video game market.  The fans of the sci-fi/comic genre want cutting edge graphics and special effects.  They represent a key segment of the video game market.  ComicCon is a venue for previewing many new upcoming games for the holiday season.
I can always count on my 18-year old son for in-depth research.  He spent the entire time in the video game area just like every other year.

 In 2007 one could find gaming, both consoles and PCs, in the central portion of the exhibit area.  This year all gaming was pushed to the far left side.  There was not as strong an emphasis on the hardware.  Last year I said that content was king.  It was even more so in 2008.  Various game vendors had demos for all of the gaming consoles, but the consoles themselves were not prominently displayed.

Last year Sony and Nintendo were quite prominent with their handheld games.  This year I could not find a single demo featuring PSP or Nintendo DS.  I guess the vendors see no need to keep promoting the platforms.

In 2007 Sony had several areas for different product lines including PS2, PS3, Sony Ericsson cell phones, PSP, and Blu-Ray.  This year Sony focused on upcoming movies from Paramount.  There was a PS3 area.  However, there were no signs of PS2 anywhere.  Clearly Sony is intent on phasing out this platform since there were no games featured for it.  Little mention of Blu-Ray except for DVD releases.  Sony has won that battle, no need to promote the hardware at this show.
There was an Xbox 360 booth.  It appeared that this was mainly for demoing the Xbox Live service.

The big story in the gaming area was Capcom.  Like last year, Capcom’s booth was an arena hosting tournaments played on the PS3 and Xbox 360.  The big news is the release of Capcom’s “Streetfighter 4” title.  In fact the “Streetfighter 4” presentation was in one of the larger rooms in the convention center holding over 1,000 people and was at capacity.  It was like being at a preview for a major Hollywood movie.

As always I could count on finding my son around the Maximum PC booth.  Several PC games on Alienware platforms were featured.  There were other PC games featured around the exhibit floor, most notably World of Warcraft.  At the Maximum PC booth there were tie-ins with hardware vendors such as Sapphire and Antec.  The big raffle item people were salivating over were the Intel quad core Extreme MPUs in boxed sets.  My son missed out on an MPU by a number or two more than once.  He had to satisfy himself with other PC components he won.

What was quite notable in the PC gaming area was the lack of any gaming laptops.  These platforms are advertised on line and are being promoted by Intel, AMD and their key customers.  However, at ComicCon 2008 it appears that gaming laptops have yet to catch on.  The gamers still love their big impressive desktop cases.  The fact is that this upper end of the PC market likes to get into the inner workings of a PC and be able to “supe-up” their machines like hot rodders.  A laptop does not lend itself well to this.

The last couple of years the gaming consoles and handheld consoles were heavily promoted.  It appears the hardware vendors have established their foothold and will grow based on the demand for new game titles. Based on what I saw at ComicCon 2008 this coming holiday season should see healthy activity for the video games.  The driving force will be content – new game titles and films.

Tony Massimini, Chief of Technology
tonym@semico.com

Why is it critical to look at DRAM and NAND memories together?  As the target application for memory technologies continues to shift away from desktop personal computing, the value propositions of memory technologies have also changed.  In this report, we examine the strategic issues of the total memory market where manufacturing and technology decisions decide the profitability and health of participants and end use implementers.

What immediate business impact do DRAM and NAND have? DRAM and NAND manufacturing decisions affect all aspects of the semiconductor and electronics markets.  Cost per megabit and consumption by the PC market used to bound the memory market that was predominantly DRAM.  The growth of cell phones and the consumer market transformed NAND Flash into the trendsetter for costs and manufacturing technologies. The impact of this shift in the value proposition of memory technologies is magnified by the observation that approximately 60% of the 300mm fabs belong to companies with heavy investments in memory production and almost 60% of semiconductor Capex goes towards tools for memory production. “Yet memory revenue still continues to fluctuate on a quarterly basis, and the profit margins for the past several years have continued to be low, making it difficult to fund this Capex,” stated Bob Merritt, Semico VP of Memory Products. 

Who are the Players?  DRAM and NAND Flash vendors have changed the manufacturing landscape and subsequently the memory market.  NAND Flash is the technology driver for memory manufacturers that previously were dedicated DRAM manufacturers.  Major memory vendors have accomplished some economies by having fabs capable of converting from DRAM to NAND Flash and vice versa.  Flexible capacity works when these two markets are out of phase, but when the cycles align, supply-demand challenges are extraordinary.  Memory manufacturers are looking at foundry agreements to increase flexibility and reduce Capex investment.  However, orchestration and concept are not always soothing music.

The end markets previously defined the differences between DRAM and NAND functionality, with NAND Flash implemented in consumer products and DRAM in computing.  With the introduction of SSD (solid-state drives), combined with USB, computing again becomes the major consumer of both DRAM and NAND. 

Why be interested in Memory?  DRAM and NAND are the major memory market today.  The development of new memories (and the adoption in applications of those new memories) will yet again extend the importance of the memory market to equipment vendors, electronics OEMs, semiconductor designers and manufacturers, system and software designers at a minimum. 

This report provides a tutorial on the characteristics of the types of memory, reviews and anticipates the applications for DRAM and NAND, breaks out the investment required to participate in this market, discusses the key participants, and highlights the disruptive and evolutionary memories that are the future. 

When are DRAM and NAND One Driver?  Viewing this from the perspective of the total semiconductor market, the DRAM and NAND markets are just one market to the OEMs.  They are dependant upon manufacturing decisions that determine supply that equates to price.  Semico presents an analysis of DRAM and NAND and how, both independently and cooperatively, these two memory types affect the market.  The memory market is one of perception regarding the exact status of supply and demand.  This could be a wonderfully graceful tango if it didn’t keep devolving into a particularly vicious game of musical chairs.

To purchase this study, or to receive a copy of the Table of Contents, including a list of exhibits, please contact Susan Cadel at 607-368-7600 or susanc@semico.com and reference CC315-08, DRAM and NAND Flash:  Doing the Memory Tango.

Several Semico analysts attended Semicon West this year.  Although the forecast for 2008 capital expenditures is for less spending, there was still a lot to get excited about at the show this year. 

We talked to a few companies with innovative improvements to image sensor technology.  Sarnoff has developed a back illumination technology that utilizes SOI wafers.  Tessera continues to find ways to improve optics with their wafer level camera technology that allows for high performance imaging combined with innovative packaging to produce an ultra thin camera module.  Digital camera technology will continue to grow in cell phone and standalone camera applications but it will also increase in numbers for industrial, automotive and medical applications as well.  These improvements from Sarnoff and Tessera will enhance and broaden image sensor applications.    

Novellus is expecting to win big as the memory manufacturers go into high production with their mega-fabs which can process 140,000 to 160,000 wafers per month compared to the 40,000 or 50,000 wafers per month that an average logic fab is capable of processing.  Even at 1 or 2 copper layers, that’s a lot of material and processing steps which translates into more equipment.  I have to keep reminding myself that these are also 300mm wafers!  If unit demand continues to grow at 10% CAGR, wafer demand could double!  Who says we don’t need 450mm wafers?

In addition, this year we seemed to have talked to more companies who are finding ways to improve defect detection and cleaning steps.  Qcept is a privately held company that was founded in 2002.  They have a product that can scan wafers and utilize software enhanced imaging to detect non-visual defects.  They already have seven tools installed.  Both Novellus and ATMI focused their presentations on their cleaning solutions. 

Of course, the solar displays were probably the most popular but one of the most unique and ground-breaking presentations we had was from a company call Quantum Sphere.   The company manufactures materials for electrode systems and can lower the cost and raise the performance of products such as batteries, fuel cells, and hydrogen generation.  A few of their biggest application breakthroughs are still proprietary but expect to hear some new announcements from this company in 2009.

All in all a very good SemicoWest show.¼br> ¼/p>

During the week of June 16^th, 2008 at the VLSI Technology Symposium, there were a lot of compelling papers presented.  One in particular caught my attention because the findings had a very subtle underlying message.  I’m referring to the Intel paper on floating body cell (FBC).  The floating body cell is not new.  Intel talked about a non-planar floating body cell in 2006.  This year Intel touted a much smaller device using a planar design on SOI.   The device could have 3-4x more bits per area.  The benefit is faster computational rates.   

It is well known that Intel does not currently use SOI for volume production. When considering the use of SOI for microprocessors, Intel has long claimed that its benefits diminished with each technology node shrink.  The floating body cell announcement endorses the use of SOI but of course leaves a few openings for Intel to continue to walk a fine line around SOI.  The buried oxide (BOX) thickness in Intel’s device is only 10nm compared to >100nm for many SOI uses.  Intel feels that this technology is suitable for the 15nm node and beyond.  IBM and ISS both have an SOI memory technology which they’ve shown as beneficial at 45nm and 32nm process technology. 

One of Intel’s key statements is that FBC could “potentially be less costly” than embedded DRAM.  Very few companies can reach the economies of scale in manufacturing that Intel and commodity memory vendors reach.   Intel will continue to study the cost impact.   The real message here is that all leading edge logic companies endorse SOI’s technology benefits. 

-Joanne Itow

.  

So far in 2008, the NAND market has not experienced the “Apple effect” seen in previous years, despite the upcoming 3G iPhone (with up to 16GB of storage) and the SSD option for the MacBook Air.  Consumer confidence is low due to the repercussions of the US sub-prime mortgage crisis and consumer disposable income is hampered by rising prices at the gas pumps.  These factors are having a dampening effect on consumer electronics sales.  Despite slower growth in NAND sales this year, the market can still be characterized as a growth market.  NAND unit shipments are expected to reach 3,528.5 million units in 2008 compared to 2,508.6 in 2007.  NAND revenues will grow 13% in 2008 compared to 25% in 2007. 

Removable flash applications—cards for cell phones, digital cameras and other devices, USB drives—drive the bulk of today’s NAND market.  NAND growth through 2012 will be driven by the computing segment — USB drives, hybrid drives, and solid-state drives going into notebooks, UMPCs, servers, mobile and enterprise storage and data centers.  These markets will drive high gigabyte growth, which will need to be fed by NAND manufacturers.  SanDisk/Toshiba, Samsung, Hynix and IMFlash are all racing to conquer 40nm production for the cost advantages it will bring. 

The report presents a detailed NAND forecast, highlighting important market events and trends, as well as upcoming changes in capacity and an applications analysis.  NAND and NOR are compared in terms of revenues, units, gigabytes, and ASP.  Finally, quarterly price information from our NAND price survey is followed by the appendix, which contains all the data represented in charts throughout the report. An Excel spreadsheet also contains all the data in the report.

To purchase this study, or to receive a copy of the Table of Contents, including a list of tables and figures, please contact Susan Cadel at 607-368-7600 or susanc@semico.com and reference the NV101-08 or NAND Market – Where’s Apple?  To buy online, visit our website at:  http://semico.com/studies/category.asp?id=8#1086

The legal issues between Rambus and the DRAM manufacturers continues to move through the US court systems. Rambus won a patent infringement lawsuit three months ago against Hynix for the sale of Jedec-standard DRAM.  While Hynix is the first DRAM manufacturer to be addressed, Rambus is also pursuing patent infringement claims against most of the remaining DRAM manufacturers. Yesterday Rambus requested a court-mandated license from Hynix for past shipments of Jedec-standard DRAM sold from 2001 to 2007 and permanent injunction to stop Hynix from shipping DRAM into the US during the appeal process of the patent-infringement verdict.

Even if the courts decide to deny or delay this injunction requested by Rambus, the possibility of other disruptions to the US supply of Jedec-standard DRAM still looms on the horizon as other DRAM manufacturers take their turn in the box. 

And the alternative?  One investment company estimates that the cost to Hynix will be as much as $550 million.  Presumably most of the remaining DRAM manufacturers would also owe a similar ratio of penalties relative to their volume shipments. 

Semico’s recent report “The Introduction of DDR3 and the Rambus Tipping Point” anticipated that the issues between Rambus and the DRAM manufacturers would ultimately lead to this kind of show-down.  Semico believes that OEMs will inevitably see higher DRAM costs in the future as a result of the current litigation path that is being followed.  Other short-term impacts are also identified in the report. 

There is no such thing as too thin, too rich, too much horsepower or too much data transmission speed.  That is why semiconductor companies spend millions of dollars developing faster ICs, network processors and countless other ways of increasing transmission speed.  But, there might be a less expensive alternative. 

 On June 23, 2008 NetExÒ, announced its HyperPipe™ bandwidth optimization technology enabling ISPs, phone and cable providers to deliver next-generation wideband services over existing broadband IP networks.  HyperPipe™ is a software solution that accelerates traffic on an IP network.  The software intercepts TCP packets, which are then aggregated and sent over the network optimized to achieve greater throughput.  HyperPipe protects data packets from variations in line quality conditions that cause latency, jitter, and bit errors that constrain the speed of typical IP networks by requiring packets to be re-sent.   Semico Spin 

Although the just announced HyperPipe™ technology applies to wired or fiber optic connections, there is no reason that the underlying technology could not be applied to wireless networks.  The need for speed on WiMAX or other wireless networks could be satisfied with much less expense than by using faster, more expensive semiconductors manufactured on advanced technology nodes. 

The holy grail in wireless ICs is a cost-effective one chip solution.  The challenge has been the integration of all digital and analog functions, including RF, on a single SoC.  To date, this has only been accomplished for relatively low-power, short-range networks.  As the range increases, the amount of transmission power required also increases, requiring separate RF power components (Power Amplifiers, RF Switches and RF Filters).  This determines the level of integration that can be achieved.  Today, most wireless solutions utilize separate RF components to provide the transmission power required.  But things are changing. 

Over the next five years, unit shipments for wireless semiconductors for PANs, LANs and WANs will increase at a CAGR (compound annual growth rate) of more than 20%, much higher than the CAGR for total semiconductor shipments.  According to Semico Research Corp. there will be key segments such as WiMAX that will experience over 90% CAGR.  That growth prospect is attracting new players who are hoping to get a piece of the action with innovative solutions.  These players include large, established manufacturers as well as small, startups. 

 “The market is ripe for revolutionary change,” says Morry Marshall, Semico Vice President of Emerging Technologies.  In a recently completed study called “Front End Integration in Wireless Applications” Marshall provides functional block diagrams to establish baselines for the level of integration provided by alternate solutions available today for Bluetooth, Wi-Fi and WiMAX networks. The study then forecasts the level of integration that will be achieved within the next five years for each of these applications, identifying the areas of opportunities.  Marshall argues “The very expensive 45nm and 32nm process technologies are not the only alternatives, there are some disruptive technologies that will pave the way for exciting growth”.    

Semico Research Corp. study RF101-08, “Front End Integration in Wireless Applications,” is available for immediate shipment.  .  For more information or a copy of the Table of Contents, please contact Susan Cadel (susanc@semico.com, 607-368-7600).

An Amicus Brief was filed by three major OEMs this week in the ongoing legal activities between Rambus and the memory manufacturers.  What would concern these OEM about events that occurred almost 10 years ago?

Semico has neither the legal expertise nor the desire to comment on these ongoing cases.  However some aspects of the settlements could come to a conclusion by the end of this year.  We can comment on the potential impact on the memory supply and demand equilibrium.

Legal issues related to this long-running conflict have occasionally burst into flame and then died down in the intervening years.  Most importantly, no clear path to resolution has yet been suggested that would not place a considerable burden on some of the participating parties. One possible outcome is some level of restriction against unlicensed memory manufacturers shipping JEDEC-standard DDR memory products within the US.  Another is penalties against unlicensed memory manufacturers who had shipped JEDEC -standard SDRAM and DDR memory into the US in the past.

Semico believes that there is adequate DRAM material to support manufacturers throughout the balance of 2008.  However, it doesn’t really help the DRAM manufacturer or the OEM if that supply is waiting offshore but cannot be shipped to the US manufacturing location.  Nor is it useful to focus on the first memory manufacture to become the test case, since the conditions would eventually apply to all the manufacturers in turn.  With a supply chain so finely tuned to the supply and demand of the computing equipment manufacturers, any uncertainty in the supply side is unsettling to the OEM relying on just-in-time deliveries from inventory in close proximity.

“Regardless of the severity of the outcome, we believe that the majority of the disruption will fall on the price and availability of DDR3,” stated Bob Merritt, VP of Memory at Semico.  Any DRAM manufacturer, microprocessor manufacturer, or OEM who may be impacted by the crossover between DDR2 and DDR3 should order this report.

This study examines DRAM price elasticity, DDR3 schedules and the amazing ability of the DRAM market to turn around virtually instantaneously.

To purchase this study, or to receive a copy of the Table of Contents, including a list of exhibits, please contact Susan Cadel at 607-368-7600 or susanc@semico.com and reference VM104-08 or DDR3 and the Rambus Tipping Point.

This report focuses on DRAM modules in the server segment and some of the memory packaging density that is achieved.  Servers drive the DRAM density and much of the packaging technology.  This is one segment where DRAM is not keeping up with monolithic density demand.  Packaging has become more important in the semiconductor industry as greater functionality is put into smaller spaces.  This is true in the server segment where Blades are very compact but require huge amounts of memory.

Computing’s server segment accounted for 25 percent of the bits shipped in 2007, which will rise to 36 percent of total bits shipped by 2012.  As the server memory size increases, it requires higher density DRAM and DRAM modules.  No longer does the software require memory capacity beyond the product available at the lowest price-per-megabit in the PC segment.  It is now the high-end server segment that demands modules in densities exceeding 4GByte while 1Gbyte is the industry sweet spot. 

The DRAM module market consumes between 83 and 88 percent of the total DRAM bits sold.  The computing segment accounted for about 70 percent of these bits in 2007.  Total server unit growth is projected to have a CAGR (compound annual growth rate) of 9 percent while the average Gigabytes per system will have a CAGR of 48 percent.  This is definitely a segment driving demand as examined in the Semico study. 

This report profiles the top module vendors competing on low-profile packaging, stacking capabilities, cooling techniques and power consumption.  While other segments of the DRAM end-use markets function mainly on cost-per-megabit, the server segment challenges suppliers on technology.   

To purchase this study, or to receive a copy of the Table of Contents, including a list of tables and figures, please contact Susan Cadel at 607-368-7600 or susanc@semico.com and reference the VM103-08 or Feeding the Beast:  Servers Consume High Density DRAM Modules