Spansion Takes Charge of the NOR Market

Executives at Spansion have been busy recently, opening a new fab and sealing deals that will help the company cement its lead in the NOR market. The new fab in Japan, SP1, is the world’s only 300mm dedicated NOR facility. The company has reduced its time to market from 42 months at 110nm to 31 months at 65nm, with a goal of shrinking to 21 months at 45nm. The company plans to ship volume production of 65nm MirrorBit devices by late this year, and 45nm by late 2008. While the company is still not turning a profit, it is in the best position of any leading NOR vendor to do so. The move to 300mm 65nm production will enable Spansion to enjoy a cost lead over its competitors.

An increasing percentage of Spansion’s sales come from its MirrorBit devices. This makes the acquisition of Saifun Semiconductor a natural move to better control the IP related to the company’s success. Saifun’s NROM IP is the basis for MirrorBit, and is also licensed to Macronix, NEC, SMIC, Sony, and Tower. The move will help Spansion with future design projects, but more importantly will eliminate the licensing and royalty payments it currently pays to Saifun. Spansion paid US$17.6 million in calendar year 2006 for licensing and design services to Saifun. This will help with Spansion’s cost reduction efforts, and provide a new source of revenue from the other licensees.

The Saifun acquisition led to the surprising announcement this week of a foundry agreement between Spansion and SMIC to produce 300mm, 65nm MirrorBit products at SMIC’s China facilities. Although disappointing for TSMC, this agreement will help Spansion further expand its reach with Chinese consumer and communications electronics manufacturers.

We hope that Spansion can use the momentum from these initiatives to expand the market for NOR and finally achieve profitability.