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m140
Somewhat slanted article. Seems like author poorly researched all the publicly ...
Old Dog
Problems with getting FRAM on CMOS up and running? Who would have thought it. I ...
FRAM customers mad over IBM foundry delays
Mark Lapedus
4/22/2011 12:25 PM EDT
SAN JOSE, Calif. - Amid ongoing problems with its foundry ramp with IBM Corp., Ramtron International Corp., a supplier of ferroelectric-based memory, on Thursday (April 21) reported total revenue of $10.6 million for the first quarter of 2011, compared with $15.8 million for the same quarter last year.
Net loss for the first quarter of 2011 was $2.4 million, or minus $0.09 per share, compared with a net income of $415,000, or $0.02 per share, for the first quarter of 2010. First-quarter 2011 results included stock-based compensation expense of $347,000, and an income tax benefit of $1.4 million.
It's been a tough time for Ramtron. In January, the company accepted the resignation of Ramtron CEO Bill Staunton. At the time, Eric Balzer, Ramtron’s CFO and a member of the company’s board, was named CEO.
And for some time, IBM has been struggling with its foundry ramp for Ramtron-a move that has created a shortfall in sales and angered customers. In 2009, Ramtron entered into a foundry services agreement with IBM. The companies installed Ramtron’s FRAM semiconductor process technology in IBM's Burlington, Vt.-based wafer manufacturing facility.
At that time, Ramtron expected to generate first production wafers during 2010 on IBM’s 0.18-micron wafer manufacturing process. IBM became Ramtron’s second foundry supplier for its FRAM semiconductor products, along with Texas Instruments Inc.
To date, IBM has failed to deliver. IBM was supposed to make products on a foundry basis for Ramtron by the end of 2010. IBM is ramping up a ''FRAM-on-a-CMOS process.''
In the meantime, TI is picking up the foundry slack for Ramtron. Fujitsu Ltd. is still making products on a foundry basis for Ramtron as part of an older deal, but Ramtron is phasing out Fujitsu.
During a conference call on Thursday (April 21), Balzer described Ramtron’s first quarter as being ''strong operationally but weak financially due to supply constraints.’’
Balzer said that he has been ''personally monitoring the supply chain’’ concerning the foundry ramp with IBM, but the delay in bringing up foundry production has hurt the memory maker.
Most of Ramtron’s customers are ''staying with us,’’ but ''they are not pleased what’s happening,’’ he acknowledged.
On the conference call, one analyst even said: ‘’I’m pissed that I lost so much money on the stock.’’ The analyst apparently held shares in Ramtron. On Jan. 19, Ramtron's shares were selling at $3.13. On Friday (April 23), the stock was hovering at $2.39.
Ramtron is still working on ''bringing up the IBM manufacturing line,’’ but to date, the company is only ''sampling prequalification devices’’ from IBM’s fab, he said.
The most recent devices from IBM’s foundry fab ''are not as robust as we like,’’ he said. Ramtron hoped the FRAM devices would pass extended test times of 1,000 hours, but ''we lost one bit in the memory,’’ he said.
Balzar said that this was ''not acceptable’’ for Ramtron. The company is ''making final process improvements to strengthen device retention performance,’’ he said. ''Next silicon due to be tested over next six weeks.’’
“We made significant progress during the first quarter toward relieving our current supply constraints,” said Balzer in a statement. “With our wafer capacity effectively doubling this quarter, we are now working to expand our test capacity to support the increased wafer volume. Once we bring our wafer production into equilibrium with our test capacity during the second quarter, we will be in a position to satisfy our solid backlog of orders and resume revenue growth.”
Going forward, the outlook is mixed. “Based on the progress we have made to resolve supply chain issues and continued strong demand, we are confident that we will meet our guidance for revenue of $25 million for the first half of the year,” added Balzer.
“However, R&D investments are expected to remain above historical levels as we work as quickly as possible to bring up our new manufacturing line. As a result we anticipate a break even or slightly profitable second quarter. Our outlook for the full-year remains unchanged with anticipated total revenue of $65 to $70 million and GAAP net income of $0.10 per share,” Balzer concluded.
Net loss for the first quarter of 2011 was $2.4 million, or minus $0.09 per share, compared with a net income of $415,000, or $0.02 per share, for the first quarter of 2010. First-quarter 2011 results included stock-based compensation expense of $347,000, and an income tax benefit of $1.4 million.
It's been a tough time for Ramtron. In January, the company accepted the resignation of Ramtron CEO Bill Staunton. At the time, Eric Balzer, Ramtron’s CFO and a member of the company’s board, was named CEO.
And for some time, IBM has been struggling with its foundry ramp for Ramtron-a move that has created a shortfall in sales and angered customers. In 2009, Ramtron entered into a foundry services agreement with IBM. The companies installed Ramtron’s FRAM semiconductor process technology in IBM's Burlington, Vt.-based wafer manufacturing facility.
At that time, Ramtron expected to generate first production wafers during 2010 on IBM’s 0.18-micron wafer manufacturing process. IBM became Ramtron’s second foundry supplier for its FRAM semiconductor products, along with Texas Instruments Inc.
To date, IBM has failed to deliver. IBM was supposed to make products on a foundry basis for Ramtron by the end of 2010. IBM is ramping up a ''FRAM-on-a-CMOS process.''
In the meantime, TI is picking up the foundry slack for Ramtron. Fujitsu Ltd. is still making products on a foundry basis for Ramtron as part of an older deal, but Ramtron is phasing out Fujitsu.
During a conference call on Thursday (April 21), Balzer described Ramtron’s first quarter as being ''strong operationally but weak financially due to supply constraints.’’
Balzer said that he has been ''personally monitoring the supply chain’’ concerning the foundry ramp with IBM, but the delay in bringing up foundry production has hurt the memory maker.
Most of Ramtron’s customers are ''staying with us,’’ but ''they are not pleased what’s happening,’’ he acknowledged.
On the conference call, one analyst even said: ‘’I’m pissed that I lost so much money on the stock.’’ The analyst apparently held shares in Ramtron. On Jan. 19, Ramtron's shares were selling at $3.13. On Friday (April 23), the stock was hovering at $2.39.
Ramtron is still working on ''bringing up the IBM manufacturing line,’’ but to date, the company is only ''sampling prequalification devices’’ from IBM’s fab, he said.
The most recent devices from IBM’s foundry fab ''are not as robust as we like,’’ he said. Ramtron hoped the FRAM devices would pass extended test times of 1,000 hours, but ''we lost one bit in the memory,’’ he said.
Balzar said that this was ''not acceptable’’ for Ramtron. The company is ''making final process improvements to strengthen device retention performance,’’ he said. ''Next silicon due to be tested over next six weeks.’’
“We made significant progress during the first quarter toward relieving our current supply constraints,” said Balzer in a statement. “With our wafer capacity effectively doubling this quarter, we are now working to expand our test capacity to support the increased wafer volume. Once we bring our wafer production into equilibrium with our test capacity during the second quarter, we will be in a position to satisfy our solid backlog of orders and resume revenue growth.”
Going forward, the outlook is mixed. “Based on the progress we have made to resolve supply chain issues and continued strong demand, we are confident that we will meet our guidance for revenue of $25 million for the first half of the year,” added Balzer.
“However, R&D investments are expected to remain above historical levels as we work as quickly as possible to bring up our new manufacturing line. As a result we anticipate a break even or slightly profitable second quarter. Our outlook for the full-year remains unchanged with anticipated total revenue of $65 to $70 million and GAAP net income of $0.10 per share,” Balzer concluded.
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goafrit
4/24/2011 9:19 AM EDT
Interesting. I thought IBM is out of this business.
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elctrnx_lyf
4/24/2011 9:53 AM EDT
Is ramtron is the only company who is making FRAM's? It would be good if the technology can be licensed to other companies if this can bring any benefits to the electronic products.
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Ran de Silva
4/24/2011 4:49 PM EDT
Everspin actaully make a superior product FRAM called MRAM and some of the products are pin compatible.
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Sanjib.Acharya
4/24/2011 10:55 AM EDT
Even though the device failed this time, I'm interested to know: is passing "extending test times of 1000 hours" would be enough? What would be the expected data retention time for this FRAM devices?
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Cooltechguy
4/24/2011 8:55 PM EDT
@goafruit: IBM is one of the largest fab companies- next time you play with your PS3, XBox or Nintendo Wii think about what company makes the chips :)
Very smart move by IBM to leave the consumer PC business... after all more game consoles are sold than PCs
-disclaimer I am a former IBMer
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Neo1
4/25/2011 12:38 AM EDT
Either IBM is not serious about this business or there are some process QC issues for the above said batches. I cannot in any way understand why IBM would want to scuttle a business which it can dominate if it became cost effective.
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BillSalmond
4/25/2011 7:42 AM EDT
IBM has problems recruiting and retaining engineers in Burlington. This may be one of the reasons for their failure to perform on FRAM.
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wilber_xbox
4/25/2011 12:52 PM EDT
@BillSalmond, How do you know about the IBM problems in Burlington? If Ramtron is using 0.18um process then what issues can be there considering it is quite old semiconductor node.
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Old Dog
4/26/2011 10:41 PM EDT
Problems with getting FRAM on CMOS up and running? Who would have thought it. I mean it's so simple to take an existing 0.18um IBM CMOS process and us it as the underlay chip technology and the take a completely foreign 0.35um process and for the last 3 metal layers to come out with desired FRAM.
Just because the equipment that was supplied by Ramtron operated with a different operating system, different programs (using different programing languages than those on the IBM site) having no way to communicate with existing on site equipment or operators; there shouldn't be any long term manufacturing problems introduced from the start now should there.
Of course if one adds on some of those little recurring oversights that designers seem to keep having time to production keeps slipping. Can anyone remember the that simple little question that no one asked when low K dielectrics were the new production rage back in the late 1990's? Can anyone say Silk? How about Black Diamond? How about 1 billion dollars plus thrown away by the industry before someone finally asked what the coefficient of expansion and contraction was for these new wonder dielectrics compared to the other materials in the connecting layers of the chips?
One would think that after wasting over 100 million alone a IBM Burlington on trying to make chips using Silk work that that simple quarry would be added as a must ask question when designing a chip. Oops. Some one forgot.
That said Ramtron has a valid complaint with the extended time that IBM is taking to address all the little and big problems that have surfaced in attempts to ramp production of a product that works in according with the desired specifications.
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m140
4/28/2011 2:25 AM EDT
Somewhat slanted article. Seems like author poorly researched all the publicly available information on Ramtron's supply constraints.
Note that the major reasons for their total supply constraints were actually commented by the Ramtron CEO at the Third Annual Green Technology in Boston on March 8th, 2011.
Ramtron actually has a link to this webcast on their own website ( http://www.ramtron.com/investor-relations/calendar-events/ )
Here is the direct link to Conference webcast: http://www.wsw.com/webcast/kbro22/rmtr/
Note major reasons for supply constraints to their clients was commented at ~34:40min mark of conference webcast by Ramtron's CEO.
Net of reasons stated by CEO:
(a) Ferroelectric RAM (F-RAM) Process & Tooling very unique (not standard CMOS)
(b) Ramtron did not give adequate forecast of expected growth to their foundries. i.e. CEO states that Ramtron "gave heads up 9 months too late" to their Si Foundry in Dallas
(c) Back End Test capacity in Asia was not adequate to support demand, but they are now working towards improving.
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