Spansion announces that it has ramped its 300mm NOR flash fab at Aizu in Japan to 25,000 wafers a quarter. Spansion says it is the only 300mm fab making NOR.

Intel and STMicroelectronics have been trying to get out of the NOR business for over a year by putting their flash operations into a joint venture called Numonyx.

"Intel don't have a cost structure in place today to compete with us," according to Bertrand Cambou, CEO of Spansion, "they have to sell at below cost to compete."

In the first half of last year, Intel alone lost about $600 million on its NOR flash business. Spansion claims that its Mirrobit technology, based on Saifun's NROM technology, is an inherently cheaper technology to manufacture than the Intel-ST traditional floating gate technology.

Spansion's manufacturing cost advantage over its rivals, which all use 200mm, will continually increase the more the 300mm line at Aizu produces.

The cost advantage of 300mm over 200mm is 30 per cent. That cost advantage will improve again by 50 per cent later this year when it moves to 45nm before its rivals.

Furthermore, the cost advantage of using Spansion's Mirrorbit technology, compared to the floating gate technology used by rivals, adds another 40 per cent cost advantage for Spansion over its chief rivals Samsung and Numonyx.

Numonyx, which has started off strapped for cash, has no immediate route to moving to 300mm technology. Its 300mm fab at Catania is just a shell, and the joint venture is due to start life with a big debt which may prevent it from facilitising the fab.

Another advantage for Spansion over its rivals is that, according to Cambou, his rivals are trapped in a technology which won't scale.

"I believe floating gate will be severely compromised below 45nm," said Cambou, "it may do 40nm but if you go below that there will need to be big trade-offs."

By contrast, Mirrorbit will scale to 25nm and beyond, he reckons.