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1996 FACTS 1997 FORECAST
Market Size: $2,610 million Market Size: $3,000 million
Shipments: 359 million Shipments: 554 million
ASP: $7.27 ASP: $5.
OVERVIEW
In the semiconductor hierarchy, flash is a member of the non-volatile family (Figure 5-1).
Expanding the non-volatile memory family (Figure 5-2), flash memory represents a middle-of-the-
road alternative in terms of cost and functionality. Figure 5-3 looks more closely at how flash
memory compares with other non-volatile devices, specifically, the EPROM and EEPROM.
The flash memory market is one that ICE projects will be among the fastest growing semiconduc-
tor product segments through the year 2002. Though currently not as big as the DRAM or SRAM
markets, its sales growth makes it an important market to follow.
Over the last five years, the flash memory market matured at a rapid pace. Contributing to this
were new systems and products that are smarter, integrated, all-encompassing, and more eco-
nomical than ever before. Also contributing to flash market growth was the gradual acceptance
of industry-wide specifications. The flash industry has grown with the adoption of various inter-
face specifications—especially those relating to the PC card market.
INTEGRATED CIRCUIT ENGINEERING CORPORATION 5-
Source: AMD/ICE, "Memory 1997" 20588
Lower Cost Per Bit Increased Functionality SRAM
DRAM
NON-VOLATILE MEMORY (ROM)
Figure 5-1. Semiconductor Memory Hierarchy
Growth in the flash memory market is forecast to continue at an impressive rate as flash memory
devices are designed into many high-growth product segments including networking equipment,
wireless communication devices, and PC-related products (Figure 5-4). Other emerging markets,
such as digital cameras, represent additional growth opportunities.
While the flash market seems golden, a closer look reveals some wrinkles that still need to be
ironed out. For instance, among flash memory suppliers and customers, there exists a push for
change, but at the same time, a demand for stability. Vendors continue to juggle combinations of
new architectures, cell structures, and manufacturing processes to achieve the best in low power,
high density, easy programming, and cost-effectiveness. All are vying for domination or are
aiming their devices at specific application niches.
5-2^ INTEGRATED CIRCUIT ENGINEERING CORPORATION
Source: AMD/ICE, "Memory 1997" 20589
Lower Cost Per Bit Increased Functionality NVRAM
EPROM
FLASH
EEPROM
ROM
Figure 5-2. Non-Volatile Memory Hierarchy
Figure 5-3. Flash Finds Its Non-Volatile Niche
Typical Storage Use
Typical Number of Writes Densities Available
Flexibility
Cost Per Bit
Fixed programs
Write once
256K to 16M
Least Least
Most Most
In-system modifiable programs
Write up to 100, times 256K to 64M
Frequently updated programs and data
Write up to one million times 1K to 64K (serial) 64K to 4M (parallel)
EPROM Flash EEPROM
Source: Atmel/ICE, "Memory 1997" 20411B
5-4^ INTEGRATED CIRCUIT ENGINEERING CORPORATION
256Kbit Units (M) ASP ($) Price Per Mbit ($) Market ($M) 512Kbit Units (M) ASP ($) Price Per Mbit ($) Market ($M) 1Mbit Units (M) ASP ($) Price Per Mbit ($) Market ($M) 2Mbit Units (M) ASP ($) Price Per Mbit ($) Market ($M) 4Mbit Units (M) ASP ($) Price Per Mbit ($) Market ($M) 8Mbit Units (M) ASP ($) Price Per Mbit ($) Market ($M) 16Mbit Units (M) ASP ($) Price Per Mbit ($) Market ($M) 32Mbit Units (M) ASP ($) Price Per Mbit ($) Market ($M) 64Mbit Units (M) ASP ($) Price Per Mbit ($) Market ($M) 128Mbit Units (M) ASP ($) Price Per Mbit ($) Market ($M)
Total Market ($M) Total Units (M) ASP ($)
9
52 5
34 9
102 2
47 1
25
11 — — — — — — — — — — — — — — — —
270 26
15
65 10
48 32
245 9
106 7
166
10 — — — — — — — — — — — — — — — —
640 73
20
64 12
43 45
243 12
102 18
253 5
149
12 — — — — — — — — — — — —
865 112
25
69 22
66 82
357 33
223 50
550 20
390 3
177
29 — — — — — — — —
1, 235
30
75 34
90 105
373 55
316 85
744 40
600 9
334
59
20 — — — —
2, 359
19
37 25
44 125
250 80
232 145
602 118
972 38
689 3
114 1
61 — — — —
3, 554
12
21 15
21 115
184 75
169 195
614 150
893 85
935 12
216 12
533 — — — —
3, 671
5
8 10
12 95
133 55
99 230
575 190
836 155
1, 27
381 35
1,
22
4, 802
— — — — — — — —
80
100 40
60 215
409 180
585 240
1, 80
880 90
2, 5
300
6, 930
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 — — — — — — — —
50
58 25
31 200
320 165
429 255
1, 150
1, 200
4, 20
840
8, 1,
— — — — — — — —
30
33 15
17 170
238 150
330 235
893 250
2, 360
6, 55
1,
11, 1,
Source: ICE, "Memory 1997" 20590B
Figure 5-5. Flash Memory Market Forecast
The flash memory market finished 1996 at $2.6 billion. Growth in 1996 (40 percent over 1995) was
a continuation of the good times in the flash memory market. Although growth rates are projected
to moderate in the next five years, ICE nevertheless projects a cumulative average annual growth
rate of 30 percent for the flash memory market from 1997 through the year 2002, when the market
size is forecast to be $11.3 billion (Figure 5-7). Further, ICE believes flash dollar volume, as a per-
cent of the total MOS memory market, will increase slightly through 2002, while other memory
segments (excluding DRAMs) decline in their share of the memory market.
Figure 5-8 displays the flash memory market by density. In terms of dollar size, the 4Mbit and
8Mbit densities represented the “sweet spot” of the flash market in 1996. ICE anticipates a strong
move to higher density devices in 1997. For this reason ICE forecasts the 8Mbit and 16Mbit mar-
kets to be the largest of all flash densities in 1997.
FLASH MEMORY UNIT SHIPMENTS
Shown in Figure 5-9 is ICE’s forecast of total flash memory unit shipments for the 1992-2002 time
period. Much like the dollars portion of the flash market, unit shipment growth exploded during
the first half of the decade. Naturally, as the volume of shipments increases, the growth rate will
tend to diminish. Still, the unit growth forecast from 1997 through the year 2002 calls for steady
growth that averages a healthy 18 percent.
INTEGRATED CIRCUIT ENGINEERING CORPORATION 5-
Market ($M) Units (M) ASP ($)
Millions of Units, Dollars
ASP ($)
Source: ICE, "Memory 1997" 20597A
0
100
200
300
400
500
600
700
1Q94 2Q943Q94 4Q941Q952Q95 3Q954Q951Q96 2Q963Q96 4Q961Q
195 22
190 26
219 29
260 36
315 41
393 50
543 70
610 75
647 76
636 77
674 94
654 111
650 120
Market ($M) Units (M) ASP ($)
Quarter/Year
Figure 5-6. Quarterly Flash Memory Market
Figure 5-12 plots the ASPs of several flash memory densities through the year 2002. Later in the
decade, ASPs for each generation will decline, generating more applications that incorporate flash
memory chips. This, in turn, will help increase unit sales and create a larger flash memory market.
FLASH MEMORY BIT VOLUME
Flash memory bit volume for the complete market and for specific densities is provided in Figures
5-13 and 5-14, respectively. Total bit volume growth appears to rise exponentially in the second
half of the time period shown. Even though growing at a more “relaxed” rate through 2002, the
bit volume numbers show explosive growth. This pace of growth is almost identical to that expe-
rienced in the DRAM market when it was this size.
INTEGRATED CIRCUIT ENGINEERING CORPORATION 5-
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
Year
Dollars (Millions)
Source: ICE, "Memory 1997" 20591B
256Kbit 512Kbit 1Mbit 2Mbit 4Mbit 8Mbit 16Mbit 32Mbit 64Mbit 128Mbit Total Market ($M)
Figure 5-8. Dollar Volume of Select Flash Memory Densities
FLASH MEMORY PRICE PER MEGABIT
Figure 5-15 compares price per megabit values for several densities of flash memory. One issue
that is often raised when considering how quickly and how large the flash memory market will
grow is the price per megabit compared to a DRAM part of an equivalent density. The thought in
some circles is that flash memory devices will eventually replace DRAM main memory in PC
applications. The logic driving this thought is that flash memory devices will be cheaper on a per
megabit basis than DRAMs beginning with the 16Mbit generation.
FLASH MEMORY CONSUMPTION AND PRODUCTION
Flash memory consumption (Figure 5-16) was dominated by the North American region during
1995 and 1996. In the course of one short year, however, Japan’s consumption of flash memory
devices increased greatly. That region’s thirst for portability and consumer applications led to the
dramatic increase in flash consumption during 1996. With its emphasis on smart cards and
telecommunications, the European and ROW regions will likely increase their share of the 1997
flash memory market.
5-8^ INTEGRATED CIRCUIT ENGINEERING CORPORATION
Total Units (M) Percent Change
Year
Units (Millions)
Source: ICE, "Memory 1997" 20592B
Percent Change
Units (Millions) Percent Change
Figure 5-9. Flash Memory Unit Shipments
FLASH MEMORY SALES LEADERS
The leading flash memory suppliers for 1995 and 1996 are shown in Figure 5-18. In 1996, several
additional players entered the flash market and competition between suppliers heated up. As a
result, Intel’s flash memory business, which sailed along through the first half of 1996, dropped
sharply in 3Q96 due to pricing pressures. Nevertheless, Intel managed to increase its flash busi-
ness 22 percent during the year. The scenario was somewhat the same at AMD. That company’s
flash memory revenue increased marginally despite a significant upturn in unit shipments. Both
Intel and AMD will likely be the front-runners in the flash memory business again in 1997.
Atmel, Solid State Technology (SST), and Sharp each enjoyed large percentage gains in their flash
IC business in 1996. Atmel was one of the first suppliers to offer low-voltage flash IC devices and
Sharp ramped production of its internally designed flash ICs in 1996. The sales figures shown for
Sharp reflect only that revenue generated from sales of its in-house-designed flash memory devices.
Other companies, including several Taiwanese suppliers (see Figure 5-19), became more active in
the flash market during 1996 and anticipate another year of solid flash memory sales in 1997.
Additional flash highlights on a company by company basis are provided below.
5-10^ INTEGRATED CIRCUIT ENGINEERING CORPORATION
ASP ($)
Source: ICE, "Memory 1997" 20595B
Total ASP ($) Percent Change
Year
Percent Change
Total ASP ($) Percent Change
Figure 5-11. Flash Memory Average Selling Price
Advanced Micro Devices (AMD)
Amid very weak MPU sales, AMD experienced a rough year financially. However, flash memory
sales provided one of the few bright spots. Although revenue growth was slower than anticipated
in 1996, demand and shipments remained very solid and the company remained optimistic about
its future in this product segment. In fact, in 1Q97, AMD witnessed a 20 percent increase in sales
of its flash memory devices.
Architecturally, AMD’s flash devices are similar to Intel’s. However, rather than varying voltages
for read and write as Intel does, AMD offers the single-voltage-only option for both functions.
AMD maintains that single-voltage parts offer OEMs a simpler solution and believes that the
single-power-supply flash memory (i.e., read/program voltages of 5V/5V, 3V/3V, etc.), will be
the approach that wins out in the marketplace.
INTEGRATED CIRCUIT ENGINEERING CORPORATION 5-
Year
Source: ICE, "Memory 1997"^ 20596B
256Kbit 512Kbit 1Mbit 2Mbit 4Mbit 8Mbit 16Mbit 32Mbit 64Mbit 128Mbit Total ASP ($)
128Mbit 64Mbit 32Mbit 16Mbit 8Mbit 4Mbit 2Mbit 1Mbit 512Kbit 256Kbit
ASP ($)
Figure 5-12. Flash Memory ASPs By Density
In another move, AMD began selling bare-die versions of its flash chips in response to requests
from its non-volatile-memory customers for a known-good-dice program. Over the long term,
about 10 percent of AMD’s flash sales will be in die format. How quickly the company reaches
that level depends on customers’ willingness to use the die.
The joint manufacturing venture that AMD shares with Fujitsu was set to switch to 0.35μm
process technology from its current 0.5μm line at its No.1 facility in 2Q97, effectively doubling the
line’s production capacity to 20 million 4Mbit equivalent units per month. The companies also
planned to begin installation of 0.35μm equipment at their No. 2 facility in 2Q97 and launch pilot
production there in mid-1997. FASL produces 2Mbit through 16Mbit flash chips that operate on
5V and 2Mbit through 8Mbit chips that operate on 2.7V-3V. Figure 5-20 provides a glimpse of
AMD’s scheduled increase of production capacity for flash memory devices.
INTEGRATED CIRCUIT ENGINEERING CORPORATION 5-
^19921993199419951996199719981999200020012002 Year
Bits x 10
12
20598B
256Kbit 512Kbit 1Mbit 2Mbit 4Mbit 8Mbit 16Mbit 32Mbit 64Mbit 128Mbit Total Bit Volume (10 12 ) Source: ICE, "Memory 1997"
Figure 5-14. Flash Memory Bit Volume By Density
The partnership between AMD and Fujitsu continues to work well for both companies. The FASL
(Fujitsu-AMD Semiconductor Ltd.) agreement initially gave each company exclusive rights to sell
flash chips in specific regions of the world—AMD in North America, Taiwan, and most of Europe,
while Fujitsu claimed Japan and the United Kingdom. However, due to eroding prices and dwin-
dling market share in 1996, the two companies modified their agreement late in the year. Now,
both companies can sell their flash devices anywhere in the world without regard to geographic
region. Together, the firms are aiming for a 40 percent share of the world market.
Atmel
Atmel has been a leader in the flash memory business as well. Its flash memory devices afford the
user the ability to erase information in small, bit increments rather than in large blocks or sectors
offered from most other vendors.
5-14^ INTEGRATED CIRCUIT ENGINEERING CORPORATION
Source: ICE, "Memory 1997" 20602B
256Kbit 512Kbit 1Mbit 2Mbit 4Mbit 8Mbit 16Mbit 32Mbit 64Mbit 128Mbit
Price Per Mbit ($)
Year
128Mbit 64Mbit 32Mbit 16Mbit 8Mbit 4Mbit 2Mbit 1Mbit 512Kbit 256Kbit
Figure 5-15. Flash Memory Price Per Mbit By Density
5-16^ INTEGRATED CIRCUIT ENGINEERING CORPORATION
Others 10%
Atmel 12% (^) AMD 21%
Intel 36% Fujitsu 8%
20614D Source: ICE, "Memory 1997"
Intel AMD Atmel Fujitsu Sharp SST SGS-Thomson Others Total
1995 Sales ($M) 945 550 305 210 150 93 91 266 2,
1996 Sales ($M)
Percent Company Change
1996 $2,610M
SGS-Thomson 3% SST 4% Sharp 6%
Figure 5-18. Flash Memory Sales Leaders
Figure 5-17. Regional Flash Memory Production (Percent)
Year
Production (Percent)
North America Europe Japan ROW
Source: ICE, "Memory 1997" 20604A
INTEGRATED CIRCUIT ENGINEERING CORPORATION 5-
Figure 5-19. Taiwan Joining Flash Bandwagon
Company Flash Plans
Macronix
UMC
Winbond
Has sold 1Mbit and 4Mbit flash parts for several years. Designing products around a single-voltage architecture developed by AMD. Rapidly ramping 5V, 16Mbit, and 8Mbit flash devices. Exploratory phase.
Offers 256Kbit and 1Mbit flash devices based on its proprietary EEPROM-like "split-gate" architecture licensed from Silicon Storage Technology. Winbond is increasing production of its 5V, 2Mbit devices with 70ns access time. Source: ICE, "Memory 1997" 20419A
Source: AMD/ICE, "Memory 1997" 20605
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
Year
1Mbit Equivalents in Millions
Figure 5-20. Total AMD Flash Capacity
Mitsubishi plans to raise output of its 8Mbit DINOR-type flash memories to two million units per
month by the end of 1997. The company plans to increase its flash memory offerings in 1997 and
will focus its product line on low-voltage (2.7V) offerings. Additionally, it plans to develop a 1.8V
flash memory prototype by the end of 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.
Intel
The flash memory market 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 provide read
and write voltages ranging from 3V to 12V. Intel maintains that this feature gives its customers
more choices of programming 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, Intel’s ETOX V process is similar to the 0.35μm process used for its micro-
processors. It provides a 44 percent die size reduction over 0.6μm for an 8Mbit flash memory
(Figure 5-21).
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 16Mbit.
INTEGRATED CIRCUIT ENGINEERING CORPORATION 5-
Courtesy of Intel/ICE, “Memory 1997” 22583
0.8μ 8Mbit (28F008SA) 104mm 2
0.6μ 8Mbit (28F008SA) 63mm 2
0.4μ 8Mbit (28F008SC) 35mm 2
Figure 5-21. Intel’s Flash Memory Die Size Reduction
A new generation of SmartVoltage devices was sampled by Intel in 2Q97 that stored both code and
data in a single component without using special on-chip circuitry. By utilizing a software inno-
vation, the new Smart3 Advanced Boot Block flash devices eliminate the need for EEPROM-based
data storage in many embedded systems. The devices are targeted for space-constrained appli-
cations such as new, streamlined digital cellular phones.
As shown in Figure 5-22, portable and wireless applications were the main end-use markets that
Intel served in 1996. Wireless applications included products such as pagers, handsets, cellular
phone base stations. “Emerging” markets include digital cameras, voice recorders, and automo-
tive (navigation/map information) applications. The company believes its Smart3 Advanced Boot
Block technology will broaden its influence in these market during 1997. Volume production,
beginning with a 16Mbit device, is slated to begin in 3Q97.
Intel introduced the first of its long-awaited multi-level cell (MLC) flash devices in 1H97. A
64Mbit device was slated to be the initial product in this line. MLC stores two bit of data on one
flash cell (compared to one bit of data per cell now), effectively doubling the storage density with-
out increasing die size. Intel believes four bits of data per cell are very possible and hopes to even-
tually store 16 bits of data in a single cell. If yields are satisfactory, Intel could quickly move
several steps ahead of its competition in bringing down the cost per bit of flash memory.
Despite the many new flash product introductions, Intel claimed that its popular, higher-density
flash memory devices were “sold out” through 1997. As a result of the heavy demand, Intel had
to defer orders for its 4Mbit, 8Mbit, and 16Mbit devices. The tightening supply through 1997
stems from especially high demand in the communications market.
Flash production capacity increased greatly at Intel during the past few years after the company
spent several billion dollars to upgrade existing facilities and build completely new flash-dedi-
cated fabs (Figure 5-23). It is now positioned, along with its flash manufacturing partner Sharp,
to capture additional worldwide business in this field.
5-20^ INTEGRATED CIRCUIT ENGINEERING CORPORATION
Figure 5-22. Intel’s 1996 Flash Business by Market Segment
Emerging 26%
PC Related 37%
Wireless 37%
Source: Intel/ICE, "Memory 1997" 22584
