2007.10.05 News Digest

Greetings all. Am trying a little experiment here. I have been thinking about how to integrate relevant current news into the blog. This week a friend forwarded me a semiconductor-news email which a large semiconductor company broadcasts to its employees.

This very long email simply included a series of cut-and-paste articles with links, from various sources around the world, with a comments here and there in brackets.

Thought I’d try the same format out here, Friday evenings or Saturday mornings, every couple of weeks for a while, if time allows and it seems to be working out.

From my end, have found the exercise this week useful. Personally, tend to skim articles. Having to pick and choose which articles to include, reformat, trim here and there, and comment, has slowed me down, which is a good thing. Have noticed lots of tidbits and angles, I’d missed the first time around.

Seeing a couple weeks worth of selected news all in one place is interesting too. This post is a bit on the long side, and figure many have already seen much of this, but figure the model is the big buffet. Walk on by or eat what you want. Also sometimes the second time around you find something new and tasty.

Have added brief comments here and there in [brackets] at the beginning of some articles after the titles, which are linked to the original articles.

Regular weekly post will be up Sunday evening. News Digest is just for Saturday/Sunday.

Have a nice weekend,
Savo

10.06.07 PS. Just added — SNDK, Memorex settle legal fight (thanks poofy); Gphone still on the way; and some GS MU comments. I have left out NAND spot/contract pricing. Need to figure a simple way to include that stuff. Also, am considering trying this same format for SNDK analyst comments next Fri/Sat as a lead-in to SNDK earnings the following week on 10.18

**** 10.05.2007 ****

SanDisk, Memorex settle legal fight

[I’m wondering how SanDisk will approach the issue of SSD controller IP. It would seem that SanDisk might hold most relevant IP. If so, SSDs might fall under SanDisk’s strategy of controller IP enforcement– in other words SNDK might not to go after the competing SSD controller companies but rather the companies producing the SSDs.]

Lengthy battle over memory cards comes to end outside court
BY CHRIS NELSON

SAN FRANCISCO — SanDisk Corp. and Memorex Products Inc. have agreed to play nice. The two companies, which have been embroiled in a bitter 6-year-old federal patent dispute over flash memory technology, put aside their differences last month after deciding that the case did not warrant a trial.

Milpitas, Calif.-based SanDisk agreed to drop its claim that Memorex’s CompactFlash cards — which Memorex had purchased from C-One Technology Corp., a Taiwanese manufacturer of components for mobile devices, and Pretec Electronics Corp., C-One’s Fremont, Calif.-based subsidiary and a defendant in the case — infringed on its patent.

SanDisk is headed by Eli Harari, 60, who serves as the company’s chief executive officer and chairman of the board of directors, and Sanjay Mehrotra, 47, who co-founded SanDisk and is currently its president and chief operating officer.

Judge Vaughn R. Walker signed off on the agreement Sept. 8 in the U.S. District Court-Northern District of California and vacated all orders, including claim-construction orders, related to the dispute prior to Aug. 28. (Claim construction is the art of translating patent claim jargon into plain English; claim construction disputes arise over both the definition of technical terms and semantic interpretation.)

Walker stipulated in the agreement that Memorex refrain from manufacturing or selling the flash-memory cards in the United States; he dismissed with prejudice SanDisk’s claims that Memorex had infringed on its patent and he dismissed without prejudice Memorex’s affirmative defenses against SanDisk.

“For the life of [SanDisk’s] patent, Memorex is enjoined from using in the United States, making in the United States, having made in the United States, selling in the United States, offering for sale in the United States or importing into the United States for sale, the accused CF cards,” Walker wrote in his order to dismiss the case. He also ordered the two companies to bear their own costs and attorneys’ fees.

The agreement came a little more than a month after the court dismissed SanDisk’s infringement claims against Ritek Corp., a Taiwanese consumer-electronics group specializing in optical-media products, flash memory, MP3 players, light-emitting diode displays and plastics; as well as Ritek’s patent-noninfringement and invalidity claims. Pretek remains the lone defendant in the case.

SanDisk and Ritek also agreed to bear their own legal fees – a stipulation of the settlement agreement they reached in late June. Under the agreement, Ritek became the sole SanDisk-licensed manufacturer of flash cards, USB drives and storage systems.

SanDisk filed suit against Memorex in October 2001, accusing the Cerritos, Calif.-based company of violating its U.S. patent on the “Flash EEprom System,” which SanDisk markets to consumers as CF cards. SanDisk included Ritek and Pretec in the lawsuit because Memorex had contracted with them to manufacture its flash-memory products. SanDisk also named Taiwanese firm Power Quotient International in the suit, but reached a settlement with it in 2002.

SanDisk and Memorex began working toward resolving their dispute in mid-August – a surprising development considering that in early July, SanDisk chided Memorex and Pretec for not providing information that it had repeatedly requested of them. During their negotiations, SanDisk and Memorex learned that with the exception of a very small amount of sales, Memorex had stopped selling the disputed flash memory cards in 2002. This was reflected in a joint statement the two companies filed with the court Aug. 31.

“The revenue base on which any damages recovery would be calculated in this case is relatively modest. SanDisk and Memorex recognize that the economies of the case do not justify the fees and expenses of trial,” the companies said in a statement.

Flash memory is a type of computer memory that can be electronically erased and reprogrammed; it is considered nonvolatile, in that it retains stored information even when not powered. Flash memory is primarily used in memory cards and USB flash drives (thumb drives, handy drives, memory sticks, flash sticks and jump drives), which are used for general storage and transfer of data between computers and other digital products.

Flash memory products are an extremely competitive market that operates on very tight profit margins. SanDisk asserts that it is the only company in the world to have the rights to manufacture, distribute and sell every major flash card format. The company generated more than $3.3 billion in revenue last year, and employs approximately 1,083 employees worldwide.

****

SANDISK READIES 8 GB CARDS FOR MOBILE PHONES

By Tom Kaneshige, Senior Features Editor, CIO Decisions
10.05.2007 | SearchCIO.com

[Expect we’ll be hearing much more on the content angle over the next year. This week’s post will focus on SanDisk’s content strategy. As card capacity increases and as cards become accepted as digital media, SanDisk’s opportunities increase, particularly in mobile]

The first 8 GB removable memory cards for mobile phones will hit the market later this month from SanDisk Corp. The flash storage card maker is also negotiating with major content providers to preload their offerings, such as maps, on these cards.

Content is still key. If [SanDisk] had an exclusive relationship … then that can help them differentiate — Joe Unsworth, principal analyst, Gartner Inc.

The SanDisk Memory Stick Micro card, or M2, which doubles the previous high-capacity point, will primarily be used in Sony Ericsson mobile phones.

“Consumers will instantly have the same amount of storage as the largest-capacity iPhone,” Jeff Kost, senior vice president and general manager of the mobile consumer solutions division at SanDisk, said in a statement in August when SanDisk began testing the cards with phone manufacturers and mobile network operators.

A single, high-density card can store more than 2,000 digital songs or five hours of MPEG-4 videos, or more than 5,000 high-resolution pictures. On the business-user front, an 8 GB card can enable faster rendering of PowerPoint slides, Word documents, Excel spreadsheets and business applications such as customer relationship management tools. To date, mobile phones serving up business software have been hobbled by a lack of storage capacity, leading to slow access and a painful user experience.

However, Joe Unsworth, principal analyst at market researcher Gartner Inc. in Stamford, Conn., said he’s skeptical about the impact the card will have on businesses. “We don’t see that many removable cards being used and paid for by enterprises,” he said. “Enterprise applications [require] an awful lot. If you really needed that much, you probably have a notebook or wireless PDA.”

The main drawback to SanDisk’s 8 GB M2 card is that it’s proprietary to Sony Ericsson mobile phones and other Sony products via an adapter. “I don’t know the rollout of Sony Ericsson phones in the enterprise, but I would think that [companies] would be more likely on Motorola Qs or handheld PDAs,” Unsworth said.

Nevertheless, he said he’s impressed with SanDisk’s technological achievement. The M2 card is a technological feat: an 8-die stack on a card the size of a fingernail. “Putting eight gigabytes into that form factor is not something anybody can do,” Unsworth said, adding that the only other companies in the process of doing this are Samsung and Toshiba.

Preloading exclusive content, such as detailed maps or business applications, onto 8 GB M2 cards would also be quite a coup. To this end, SanDisk spokesman Mike Wong said SanDisk is in talks with some well-known companies, although he declined to reveal their names because negotiations were ongoing and under nondisclosure.

“Content is still key,” Unsworth said. “If [SanDisk] had an exclusive relationship with, say, Google or Yahoo Maps or Sony’s recording artists, then that can help them differentiate in an otherwise commodity market.”

Smartphones easy target for hackers, experts warn

Mapping is emerging as the killer mobile phone application; Finnish handset maker Nokia Corp. announced plans last week to acquire digital-map supplier Navteq Corp. for $8.1 billion. At least 2 GB are needed to store all the maps in the United States, Wong said.

The 8 GB M2 card will be able to store more detailed maps that can lead to location-based services, such as finding the nearest gas stations and restaurants.

While SanDisk won’t disclose specific details until the card’s official shipping announcement planned around the CTIA Wireless conference in San Francisco this month, Wong said the 8-gigabyte M2 card “will be priced at not more than a couple hundred dollars.” The card will be available through various retailers and online outlets worldwide.

**** 10.03.07 ****

Verizon to Launch IPhone Look-A-Like

Wednesday October 3, 3:01 am ET
By Peter Svensson, AP Technology Writer

[Voyager looks like a clunker: video: As one message board put it, “Screen not as big as an iPhone and it has that ridiculous slide out hamster sized keyboard.” But it does have a card slot for 8GB MicroSD card. King of MicroSD: SNDK]

Verizon Wireless to Launch IPhone Look-A-Like With a Difference

NEW YORK (AP) — In time for the holidays, Verizon Wireless is launching a cell phone that looks a lot like the hottest phone so far this year: Apple Inc.’s iPhone. Like the iPhone, the LG Voyager features a large touch screen, a camera and extensive multimedia, Web browsing and e-mail capabilities.

However, it one-ups the iPhone by folding open lengthwise to reveal a QWERTY keyboard and a second, non-touch sensitive screen. The lack of a hardware keyboard has been one of the main complaints about the iPhone.

The Voyager will connect to Verizon Wireless’ latest data network, providing speeds much higher than the AT&T network the iPhone uses. The Voyager also has direct access to Verizon Wireless’ online music store.

However, the Voyager will not come with a large built-in memory for songs and video, offering instead a slot for memory cards up to 8 gigabytes. Nor are its screens as large as the iPhone’s.

It’s an open question whether the Voyager can encroach on the iPhone’s cachet or match its ease of use. Apple has sold more than 1 million units since the phone-cum-iPod hit the market June 29.

In announcing its holiday lineup Wednesday, Verizon Wireless did not say how much the Voyager or three other new phones would cost. It also didn’t give a specific launch date, saying only that they would be in stores before Thanksgiving.

Verizon also showed off an LG phone called the Venus. It has two screens on its face, of which the smaller is touch sensitive, with controls for the phone’s music player and camera. The phone slides open to reveal a numeric keypad.

Verizon Wireless is also bringing out a version of the BlackBerry Pearl, with fast data network access. The slim e-mail oriented phone is already available on the slower networks of AT&T and T-Mobile USA. (Like Verizon, AT&T has a third-generation cellular broadband network, but it’s not used by the AT&T Pearl.)

The fourth phone in the lineup is the Juke, by Samsung. A small unit that flips open like a jackknife, it features an iPod-like wheel to control the music player.

****

Toshiba’s 3D memory, fuel-cell TV and Cell processors for PCs

10.03.07

[This is getting interesting. Toshiba’s 3D NAND memory has working samples. A fallback for SNDK if Matrix 3D doesn’t work out. Lots of angles. Gamesmanship with SNDK over Matrix? One to watch]

Posted by Michael Kanellos

CHIBA, Japan–BiCS. It’s the acronym that could extend Moore’s Law.

BiCS, which stands for Bit Cost Memory, is a three-dimensional flash memory chip developed by Toshiba in which transistors can be stacked vertically. Stacking vertically, ideally, will allow engineers to continue to add more transistors to a chip at a steady pace, which in turn means continual, steady improvement in electronics. Cost goes down, performance goes up, and everyone can continue to sell new products to willing customers.

The company has created working samples and discussed the technology at academic conferences, but is showing the concept for the first time to the broader public at Ceatec Japan 2007, the tech trade show taking place here this week.

The key is that the chip is rewritable: data can be inserted and erased, as it can on regular flash memory chips. Matrix Semiconductor, which was bought by SanDisk in 2005, has a 3D chip, but the memory cells aren’t rewritable. Whatever data is inserted the first time stays there forever.

The model pictured here helps explain how it works. The green layers are silicon gates. The empty spaces are sources and drains (the output terminals). The presence or absence of electrons going from the source to the drain are registered as ones and zeros and form the basis of computer data.

Those long, thin yellow poles are silicon piers. The piers control the flow of electrons. In a standard transistor, the surface area that connects the gate (the input terminal) and the silicon (which controls the flow of electrons) is relatively limited. Here, the entire circumference of the junction between the pier and the gate is used, increasing the surface area that connects the gate and the silicon and thereby improving performance.

The idea is similar to the tri-gate transistor and fin-fet transistors developed in labs by, respectively, Intel and IBM.

Toshiba has made samples on the 90-nanometer process. …

**** 10.02.07 ****

Microsoft unveils revamped Zunes

Changes include a complete overhaul of the device’s software and a redesign of Marketplace, which will offer 1 million unprotected songs.

[The good news: Some Zunes are going to consume NAND memory. The bad news: Competition for the Sansa. Am not too concerned at this point. MSFT has to buy its NAND from others. SanDisk will be able to undercut the Zune on price. Sansa should be able to hold its own as the preferred iPod alternative. Zune resembles the previous generation of iPod and the (most recent) Sansa View. Maybe a bit sleeker than the Sansa. MSFT also unveiled a new store for music downloads. MSFT has no answer to the iPod Touch and neither does SanDisk. These Zunes use MSFT Windows Mobile OS – see Fortune article ]

By Greg Sandoval
Staff Writer, CNET News.com
Published: October 2, 2007, 7:15 PM PDT

Microsoft has unveiled the second generation of Zune digital music players and will offer consumers 1 million unprotected songs on its online music store.

Microsoft announced on Tuesday that it will offer three new models of the Zune in November, including two equipped with flash memory. The 4GB and 8GB versions are iPod Nano look-alikes that will sell for a suggested retail price of $149 and $199 respectively. An 80GB player equipped with a hard drive will sell for $249. The pricing scheme for the devices exactly mirrors that of Apple’s iPods.

Some of the other changes include a complete overhaul of the device’s software and a redesign of Marketplace, Zune’s music store. Other interesting features include wireless syncing and the new Zune Pad, a touch-sensitive technology that enables users to slide their finger across the main navigation button instead of always having to click.

The 4GB and 8GB models represent Zune’s first foray into flash-based players and they will be offered in a palette of red, pink, black and green. The 80GB features a 3.2-inch screen and will be smaller and thinner than the original Zune 30GB player. The software upgrades will also replace the software in the 30GB models.

Zune devices will automatically sync when connected over home wireless networks. The feature is designed to ensure that owners always leave home with the latest content, such as podcasts.

The move to provide unprotected MP3 music on the Zune music store is unprecedented for Microsoft but does not come as a surprise. Not only is the company one of the major providers of digital rights management software, but executives there slammed Apple and its CEO Steve Jobs last February when he called on the music industry to abandon DRM.

Microsoft then reversed itself in April, saying it would eventually sell unprotected songs on Marketplace.

While 1 million songs may sound like a lot, Microsoft isn’t saying just how much of that music is coming from the four major music labels. Already, eMusic offers more than 2 million unprotected tracks from mostly independent labels. In May, Apple announced it had partnered with record company EMI to sell DRM-free music on iTunes. Apple hasn’t said how many unprotected tracks on iTunes are available.

Susan Kevorkian, an analyst with IDC, said that Microsoft is more interested in selling music players than it is with providing DRM software. She said that Microsoft began scaling back its DRM efforts last year in order to throw more resources at improving the Zune.

But are the new products enough to reel in Apple? The newest Zunes are a step up, but Microsoft watchers don’t think they offer anything better than the iPod.

“I would say they are holding their own,” Van Baker, a research vice president with Gartner, said of Microsoft’s venture into the music category. “Within that group (vying for the approximate 30 percent market share that Apple doesn’t own), I’d say they are a contender. Are they gaining on Apple or making up ground? I don’t think so.”
What’s new with Zune?

The problem is that the newest Zune models don’t offer anything demonstrably better than the iPod, the analysts said.

More than a year has passed since Microsoft began developing the music player and the company is still without a comparable video store to iTunes. Zune’s Marketplace will begin offering music videos, but it is still without TV shows. While Microsoft crowed about its new touch-sensitive navigation button, the new iPods come equipped with touch-sensitive screens.

And the new iPods now offer Wi-Fi–a feature that was supposed to set the Zune apart.

Kevorkian said her company last year had anticipated “a quicker refresh” to the Zune. She said that some of the reasons that may have slowed Zune efforts may have been some key departures in the unit’s management and that it was forced to rush the launch of its debut models.

“What we are seeing now are important incremental changes,” Kevorkian said. “What we’re waiting to see is more revolutionary changes, such as the ability to access the Zune music service via Wi-Fi. We think Microsoft will be a strong player in the portable flash player category. They have diversified their player platform and undertaken a major overhaul of their software, which is important way to development. There are people looking for an alternative to Apple, and Microsoft is likely going to win market share from other Windows-based media players. They are just behind right now.”

Microsoft has always said that the Zune was a long-term project, predicting in 2006 that it could take years and hundreds of millions of dollars to go toe-to-toe with Apple. The company surpassed its initial sales goal by selling more than 1 million Zunes by June.

“What we’ve done in the past year is establish the Zune brand,” said Jason Reindorp, marketing director for Zune. “It’s starting to mean something to people. That isn’t easy to do. Microsoft had a very realistic view of what it would take to get into the marketplace and differentiate itself and be successful. We look at these things in terms of years, not months.”

Interestingly, Microsoft usually likes to compare its efforts with Zune to that of the company’s foray into the video game sector. With the Xbox, Microsoft seized market share from Sony and Nintendo very early. Are there any similarities between Xbox’s early efforts and Zune’s?

“No, absolutely not,” Baker said. “Xbox had Halo. If it wasn’t for Halo, Xbox probably wouldn’t exist. But that’s the game industry, where one incredible franchise can drive an entire platform. Against Apple, Microsoft is up against a dominate service worldwide and it’s going to be tough to knock them down if Microsoft doesn’t bring something uniquely different to market. If Microsoft can’t do that, they can only compete on price and that only buys so much time.”

****
Micron Reports Q3:07 Goldman Sachs Comments
[from 10.02.07 GS MU analyst report. Lots to say about MU, but am leaving it at this for now]

Implications

There is no change to our Neutral stock rating. While valuation prevents us from being overly negative, Micron’s fundamentals will remain weak until the DRAM industry reduces capacity growth. 2008 capex reductions by Micron, Qimonda, Nanya, Inotera, and ProMOS are a significant positive, but we believe that it will take several quarters before excess DRAM supply is worked down. Separately, while Micron continues to reduce fixed costs, it still generates industry low margins. As a result, when the DRAM
cycle begins to recover (likely in mid’08), we would recommend focusing on a company like Infineon (covered by Simon Schafer) to leverage the DRAM upturn through its stake in Qimonda. We would also note that management made an interesting comment about SSD adoption reaching 5-10mn units in 2008, which has very positive implications for SanDisk.

**** 09.26.07****


Up next for Apple: the return of the Newton

09.26.07

[This product is rumor and speculation, but would make a lot of sense for Apple. Such an ultra-thin tablet and its competition, would be big consumers of NAND. Another Apple product along the same lines which might even arrive sooner: An Ultra-thin Apple Subnotebook. Am expecting it to also be flash-based.

One of the interesting angles to watch is where SSDs come into the game. For the iPhone and iPod Nanos, Apple uses individual NAND chips with the controller or controller functionality handled separately. The closer we get to a laptop, the more sense SSDs would seem to make]

By Kasper Jade Published: 10:00 AM EST

Apple Inc, which helped spawn the PDA market with its Newton MessagePad line in the early ’90s, plans to give the concept another go with a modern day reincarnation of the old fan favorite based on the company’s new multi-touch technology, AppleInsider has learned…

Externally, the multi-touch PDA has been described by sources as an ultra-thin “slate” akin to the iPhone, about 1.5 times the size and sporting an approximate 720×480 high-resolution display that comprises almost the entire surface of the unit. The device is further believed to leverage multi-touch concepts which have yet to gain widespread adoption in Apple’s existing multi-touch products — the iPhone and iPod touch — like drag-and-drop and copy-and-paste.

newton-reincarnation-070925.jpg

Artist rendition showing approximate size ratio to existing Apple handhelds | Artwork by audiopollution.

More broadly characterized as Apple’s answer to the ultra-mobile PC, the next-gen device is believed to be tracking for a release sometime in the first half of 2008. Assuming the project remains clear of roadblocks, sources believe it could make an inaugural appearance during Jobs’ Macworld keynote in January alongside some new Mac offerings. Still, manufacturing ramp and availability would seem unlikely until closer to mid-year [2008], those same sources say.

As AppleInsider has hinted in recent months, the next-gen PDA will signal the advent of a fifth core business segment (fourth if you discount Apple TV) for Apple, but at the same time represent just smidgen of what’s to come from the company’s new multi-touch platform, which has already proven to be a game-changer.

[For discussion see MacRumors: 274 comments at this time]

****

Toshiba exec: NAND is sold out

[Pretty convincing comments that demand for NAND is very high. High demand = stronger NAND prices = a better business environment for SNDK]

09.26.07

TOKYO — Toshiba Corp. is unable to meet demand for its NAND flash memory devices and is sold out until December, according to Shozo Saito, president and CEO of the company’s semiconductor unit.

Saito confirmed reports that Toshiba can only meet 70 percent of its order demand from customers. The company, which is turning the remaining business away, also sees a disappointing flat-to-down scenario in terms of average selling prices (ASPs) for NAND.
On the bright side, “demand is very strong,” Saito told EE Times in an interview at Toshiba’s headquarters here this week.

“We plan a huge ramp” to meet soaring demand, he said. He is a corporate vice president for Toshiba and the president and CEO of Toshiba’s semiconductor company.

Much of the NAND demand is coming from the embedded market, which includes MP3 players, USB drives and other products, he said. The flash card represents a smaller portion of the demand. ”Toshiba is focusing on the embedded market,” he said.

Overall, NAND is booming again after a downturn. From late last year until earlier this year, NAND prices fell like a rock and demand was poor.

What a difference a few quarters make. Worldwide NAND bit growth is expected to reach 162 percent in 2007, compared to 200 percent last year, he said. He predicted that the overall IC market could grow by 5 percent in 2007 and 10-to-12 percent in 2008.

Meanwhile, the NAND market is slowing to a minor degree. NAND bit growth is expected to jump 120 percent in 2008 and 115 percent in 2009, he said.

As reported, Toshiba, the world’s second-largest NAND supplier, is moving into production at a new 300-mm fab in Japan. Toshiba and its NAND partner, SanDisk Corp., recently opened Fab 4, a 300-mm fab venture at Toshiba’s Yokkaichi operations, near Nagoya, Japan.

This fab venture, called Flash Alliance Ltd., broke ground last summer. Current estimates say the fab could produce 67,500 wafers a month by the fourth quarter of 2008.

The first NAND parts from the fab are based on Toshiba’s existing 56-nm process. It will also produce parts based on its 43-nm technology.

The Toshiba executive confirmed that the company is in the planning stages for the next fab — or so-called Fab 5. It has not been decided where the company will build the fab, he said.

There are continued rumors about a new 300-mm fab venture between Hynix and SanDisk. Some said it is already a done deal. SanDisk has dismissed the speculation, but it raises questions about its relationship with Toshiba.

****

SMIC’s flash efforts stall, says analyst

[Looks like Saifun’s tech, NROM quadbit, isn’t cutting it as NAND competition. At one time, many thought NAND wouldn’t be scalable below 50 nm and NROM would. Times have changed, NAND doesn’t appear to have that problem while NROM might.
Remember that debate about NROM vs x4 for 4 bit/cell tech? Looks like Dov had it right at least in – direction. We’ll need to see x4 rolled out before its conclusive.

In any case this isn’t to say that NROM won’t be competitive with some NOR applications. Suspect that NROM is used for embedded memory in specialized TSEM controller chips. SMIC has recently been added to the SNDK controller wafer list, so maybe their NROM expertise is proving useful for specialized SNDK controllers too.]

09.26.07

TOKYO — Semiconductor Manufacturing International Corp.’s efforts to enter the flash-memory market have apparently stalled, according to an analyst.

In 2005, Israel’s Saifun Semiconductors Ltd. disclosed a foundry alliance with Chinese foundry provider SMIC. Last year, SMIC (Shanghai) decided to enter the memory card market help with help from Saifun.

SMIC extended its license to use oxynitride flash memory technology so that it can develop and manufacture memory cards. NROM flash memory from Saifun (Netanya, Israel) stores up to four bits per memory cell.

The Saifun-SMIC arrangement has stalled. This is based on an analyst report about Saifun’s upcoming quarterly results.

Saifun ”is likely to be highlighted by continuing weakness in the NOR flash market, with Spansion facing price pressure and the slower-than-expected NROM product ramp at SMIC,” said Daniel Amir, an analyst at Lazard Capital Markets, in a report.

Overall, though, Saifun is expected to meet its forecast. ”Following our meeting we expect the company to post in-line revenues and EPS for 3Q of $9.9 million and $0.13, respectively,” he said. However, ”our channel checks suggest it is unlikely that an additional licensee will come on board in 2007.”

**** 09.25.07****

Amazon.com Launches Public Beta of Amazon MP3, a Digital Music Store Offering Customers Earth’s Biggest Selection of a la Carte DRM-Free MP3 Music Downloads

Amazon MP3 Offers Over 2 Million Songs From More Than 180,000 Artists and Over 20,000 Labels, Including EMI Music and Universal Music Group

[This trend towards removing DRM on music is very interesting and plays to SNDK strengths]

SEATTLE–(BUSINESS WIRE)–Sept. 25, 2007–Amazon.com, Inc. (NASDAQ:AMZN) today launched a public beta of “Amazon MP3,” a new digital music download store with Earth’s biggest selection of a la carte DRM-free MP3 music downloads. Amazon MP3 has over 2 million songs from more than 180,000 artists represented by over 20,000 major and independent labels. Amazon MP3 complements Amazon.com’s existing selection of over 1 million CDs to now offer customers more selection of physical and digital music than any other retailer.

**** 09.24.07****

TV on Cellphone Screens? No thanks, say Europeans

09.24.07

HELSINKI (Reuters) – Europeans’ interest in watching mobile television is as tiny as cellphone screens, a new study showed on Monday, even though the industry has been buzzing about offering TV on handsets for years.

Mobile operators hope that mobile TV could encourage users to spend an extra 5 to 10 euros a month, compensating for declining revenues from voice calls, but mobile television and video downloads ranked close to the bottom of consumer interest in a Gartner study in Europe.

Only about 5 percent of Europeans expressed interest in watching television or video on their cellphones in the next 12 months, the study said. At the same time some 20 percent of Asians said they would watch TV on their phone screens.

“I think the main reason is the compromise you are making on the device you need to carry to watch TV — either too big if you want a nice experience or too small and you do not have a good experience,” said Carolina Milanesi, a Gartner analyst.

Also lack of consensus on business models, variety of different technologies and shortage of airwaves has been hampering takeup of mobile TV.

Because spectrum availability is not a problem in many Asian countries, commercial DVB-H broadcasts have already started in India and Vietnam, with Malaysia, the Philippines and Indonesia also set to open networks this year.

In Europe, three countries have started commercial networks.

Research firm Informa has projected entertainment services — games, music, TV, adult content and gambling — would grow to $38 billion by 2011 from around $18.8 billion in 2006.

Music has been the main driver for mobile entertainment so far, but players in the field have expected a boost from mobile television — a conclusion thrown into doubt by the study.

****

LCD crunch causes handset shortages

09.24.07

[If the LCD crunch becomes serious, orders for embedded flash could slow. Am not too worried though for SanDisk.]

TOKYO — Amid an apparent LCD crunch, there is suddenly a shortage of handsets in the U.S. market.

The apparent shortage ”is in the millions of units,” said Matthew Hoffman, an analyst with SG Cowen Securities Corp., in a recent report.

”We have confirmed with multiple contacts at the distributor and handset OEM level that key U.S. operators are now scrambling to procure enough handsets to meet expected demand in the U.S. for 4Q07,” Hoffman said. ”We expect this sudden change in the environment — from excess to shortage, especially in GSM — will be positive for handset pricing and unit sales in the short term.”

There are various reasons for the shortfall. ”There are conflicting stories about the reason for the tightening of supply — one contact pointed to an issue with LCD supply — but the problem seems to be most acute in the GSM channels, especially T-Mobile USA for 4Q ’07. AT&T handset sales remain up double-digits quarter over quarter,” he said.

Some handset vendors are doing better than others. ”With Samsung’s strong product line-up reportedly sold out for the next few months, we look for [Nokia and Motorola] to be in position to reap higher unit sales,” he said.

”With supplies suddenly tighter, we expect OEMs to get more selective about mix. New models like the Motorola RAZR2 — a device we have been lukewarm on — may see increased interest as a result of the situation we see evolving in 4Q ’07,” he added.
The apparent shortage is in the millions of units.

n Details on Situation. There are conflicting stories about the reason for the tightening of supply – one contact pointed to an issue with LCD supply – but the problem seems to be most acute in the GSM channels, especially T-Mobile USA for 4Q07. AT&T handset sales remain up double-digits q/q.

**** 09.21.07****

Samsung sees profit rise in chip business in 2nd half

09.21.07

Seoul, Sept. 21 (AP): South Korea’s Samsung Electronics Co. expects strong demand and cost cuts to boost second-half profit in its chip business, it said on Friday.

The profit margin for its NAND flash memory chips _ used in digital consumer products like cameras and music players _ is rising sharply, while that for DRAM, or dynamic random access memory chips used in personal computers, is increasing moderately, the company said in material prepared for a CLSA-sponsored investor relations meetings in Hong Kong.

Samsung, the world’s largest maker of memory chips, expects the global NAND market to be more favorable in the first half of next year due to strong demand for high-density music phones and video MP3 players.

Samsung sees also a strong increase in shipments of its flat-panel TVs in the third quarter of this year and “even better” performance in the fourth.

Sales this year of liquid crystal display televisions are expected to double on year to 12 million units, it said.

Samsung reported in July that its net profit in the quarter to June 30 fell 5 percent from a year ago on price declines for computer chips. But it said then as well that a rebound in the market would bolster earnings.

Samsung earned 1.42 trillion won (US$1.55 billion; euro1.12 billion) in the second quarter, the company said in the July earnings report. Sales rose 3.7 percent during the quarter from the same period last year.

Shares of Samsung Electronics were down 2.2 percent at 534,000 won mid-afternoon in Seoul. They are down 22 percent since hitting 687,000 the day the earnings report was issued.

The shares were boosted that day to their highest level for the year on a news report that U.S. investor Carl Icahn may be considering a bid for the company.

****

NAND flash controller market improves slightly in September, but pricing still issue
from Digitimes

09.21.07
The NAND flash controller IC market has shown signs of a rebound in September amid easing of shortages of the memory type, but price wars among Taiwan-based controller suppliers remain an issue, according to Wallace Kou, president and CEO of Silicon Motion.

Supply of NAND flash is no longer an issue, but there is still a wide gap between spot and contract prices, he pointed out. Demand from Apple for NAND flash is now not as strong as previous months, and the major issue the market now faces is how to maintain a balance between supply and demand, Kou commented.

Kou said Silicon Motion expects revenues for the third quarter to stay flat or rise slightly compared to the second quarter.

NAND flash controller IC design houses had a dismal summer this year, as the NAND flash market was hit by serious shortages. Major NAND flash makers used their own controllers to produce their own memory cards, seriously squeezing the market for the IC design houses, industry observers said. Many designers saw their shipments drop as much as 50% compared to the peak of their shipments, the observers noted.

Despite signs of a rebound in September, NAND flash controller IC designers expect only slight growth in shipments and revenues for the month, as the memory market for the fourth quarter is still shrouded in uncertainty, the observers said.

As it is still uncertain whether the major NAND flash makers will stick to the policy of making their own memory cards, the designers have to consider diversification or seek to become suppliers for the major memory makers, the observers said.

**** 09.19.07

Google Gphone still on the way, say sources
from Digitimes

Google will definitely launch its own-brand handset but has yet to finalize the handset’s specifications, OS, production contractor and operating partners, according to sources at Taiwan handset makers.

Although market rumors previously stated that Google is likely to use an EDGE solution developed by Texas Instruments (TI) for its planned handset, recent developments indicate that Google is also evaluating the possibility of launching a 3G handset initially.

TI’s handset chipsets will find their way into the Google phone should the company decide to roll out an EDGE-compliant handset, but Qualcomm could turn out to be the winner if Google decides to bet on a 3G model, the sources noted.

However, the choice of a 3G platform might force Google to postpone the launch of the so-called Gphone to the first half of 2008 instead of the latter half of this year as expected due to the change of platform and problems related to licensing of patented technologies, the sources indicated.

High Tech Computer (HTC), meanwhile, is being marked as the manufacturing contractor for the Gphone due to the company’s expertise in ODM and brand business and its mutual cooperation with a number of telecom carriers worldwide, said the sources.

Google may also try to launch a handset running on a self-developed OS, to compete with Windows Mobile and Symbian platforms, the sources speculated.

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One Response to 2007.10.05 News Digest

  1. Poofypuppy says:

    Hi Savo,

    Here’s an news item released today about the litigation against Memorex…

    [Judge Vaughn R.] Walker stipulated in the agreement that Memorex refrain from manufacturing or selling the flash-memory cards in the United States; he dismissed with prejudice SanDisk’s claims that Memorex had infringed on its patent and he dismissed without prejudice Memorex’s affirmative defenses against SanDisk.

    “For the life of [SanDisk’s] patent, Memorex is enjoined from using in the United States, making in the United States, having made in the United States, selling in the United States, offering for sale in the United States or importing into the United States for sale, the accused CF cards,” Walker wrote in his order to dismiss the case. He also ordered the two companies to bear their own costs and attorneys’ fees.

    http://www.indusbusinessjournal.com/ME2/dirmod.asp?sid=&nm=&type=Publishing&mod=Publications%3A%3AArticle&mid=8F3A7027421841978F18BE895F87F791&tier=4&id=818FA184DACA4EAC90B0988516EDFFB9

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