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Intel and Micron team up for flash fab

New NAND chip plant

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Intel and Micron will start building a new fabrication plant for NAND flash chips by the end of the year, according to a DigiTimes report.

Toshiba will have a new flash fab coming online in Japan in early 2011, and building should start this month. Samsung also has a new fab in South Korea coming online next year. Flash fabs cost a lot of money and manufacturers are reluctant to invest in them unless they can see a certain demand for the capacity. The industry swings between flash chip scarcity and over-supply when manufacturing capacity is out of step with demand.

The most recent bout of over-supply led to industry consolidation with, for example, Micron buying Numonyx earlier this year.

In the past couple of years there has been a surge in smartphone sales with a significant increase in flash demand. The use of flash in storage for other gadgets has also increased.

Toshiba has bought into Violin Memory and Samsung investing in Fusion-io, both signs that flash fab operators want to secure upstream channels for the output from their fabs. There has also been the recent rise in the tablet form-factor device, led by Apple's iPad, which is flash-based, for now.

Intel is working with disk drive manufacturer Hitachi GST to develop a solid state disk (SSD). Micron flash is being used by storage vendors such as Nimbus Data. Seagate has developed the Momentus XT, a hybrid flash and spinning disk drive and Toshiba is is considering a similar product. A common view of drive array futures is that a two-tier product will emerge, with the most active data held in flash and the rest stored in bulk capacity SATA drives.

Altogether it looks as if there has been a significant and sustainable increase in flash demand with growth continuing.

Intel and Micron partner in IMTF with the two companies sharing output from their fabs. They will be convinced that the industry will not return to over-supply with a NAND chip glut destroying manufacturers' profitability.

Intel has just reported its best ever quarter and can well afford the investment. ®

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