Elpida, the world's fourth largest DRAM supplier, is looking to follow the business model of the top three DRAM suppliers by adding a NAND flash product line, if its talks with Spansion come to fruition.
Spansion is mainly a NOR flash supplier but, shortly before it entered Chapter 11 bankruptcy proceedings in February last year, it announced a product for addressing the NAND flash market which is currently booming and under-supplied.
Spansion's NAND product is called ORNAND2. It doesn't address the high density end of the NAND business, but is a single-level cell technology which uses a 1.8V power supply, instead of the 3V used by MLC NAND, and has a fast read speed and fast write (6-8Mbyte-per-second) speed compared to MLC, and a higher number of read/write cycles (100k cycles compared to 30k cycles for MLC).
ORNAND 2 is useful in handsets. In addition, Elpida might make use of Spansion's multi-level cell technology - which goes up to four bits per cell, to develop dense NAND.
Since NAND can be run down the same production lines as DRAM, it is a very complementary product to DRAM. The top three producers of DRAM - Samsung, Hynix and Micron - all make NAND as well as DRAM.
Spansion was formed from the merger of the flash businesses of AMD and Fujitsu and has a large presence in Japan.
Elpida's possible purchase of Spansion seems to extend only to IP - including the Milan-based R&D centre - and does not include Spansion's Japanese fab at Aizu which filed for protection in Japan in February 2009
Spansion filed for Chapter 11 in the US in March 2009 but was hoping to be out of bankruptcy proceedings by the end of last year.
Spansion had about 40% of the NOR flash market, and was selling over $350m worth of NOR flash a quarter last year, and had built up cash balances of over $200m at the end of Q209.
The talk that the purchase price being discussed for Spansion is only in the $30-50m range suggests that Elpida does not want the NOR flash side of Spansion.