Kingston factory to shorten memory chain

Irvine A cunning plan by memory firm Kingston Technology means that a $100 million investment in clean room technology will shorten the supply chain for modules from eight weeks to 10 days.

John Tu, co-founder of the firm, talked yesterday about how its Payton subsidiary, which involves clean room technology and a capital investment of $100 million promises to bring less volatility in the topsy-turvy world of DRAM.

He said: "The problem is that inventory is always the killer. As a result of the Dell model, supply chain management became far more efficient. We realised that we must improve our own company. Our partners, the semiconductor companies, are very good at designing wafers and chips but they’re also involved in all the back end processes. That is at the core of their inefficiencies. They should stay at the core of what they do well."

So what's happening in the Payton fab, next door to Kingston's module factory, in a re-fitted Ricoh building?

Wafers are being shipped into the clean room part of the plant, and then cut, tested and packaged by the firm. The DRAM companies, first Toshiba, but then others, are allowing Kingston to organise this back end process, which is essentially a built to order operation.

The factory will do this not only for SDRAM, but for Compact Flash memory, Rambus memory and DDR, according to Kingston.

Rambus MPGA packaging will start in December and although it's not entirely clear when the six million integrated circuit (IC) capacity gets mopped up, there's some state of the art kit in the building.

Toshiba, for example, outsourced the 14 steps of the back end process to different locations worldwide. Kingston will perform all those functions in-house at Dayton.

The machinery in there can cope not just with eight inch wafers but with 12-inchers when they come on stream.

The packaging process will short circuit the supply chain by bringing all of the different stages in producing the memory chips under one roof.

Kingston claims it has dug into its own pockets to start up the mini-fab, and has had no third party investment from Toshiba, its first customer. And just because Tosh is its first customer, doesn't mean that other Dramurai won't follow, insists Tu and other senior Kingston executives.

Six million integrated circuits. And the former AST factory next door can produce 50,000 modules a day when it's running at full capacity. Time to get your calculator out and go figure. ®