China Fabless: Going it alone, GigaDevice targets 'no-growth' NOR flash market

BEIJING – While most of China's fabless industry is pursuing apps processors, GigaDevice Semiconductor Inc. is targeting a market most have forsaken: NOR flash memory.

In a recent interview with EE Times, GigaDevice CEO and President Yiming Zhu proclaimed the NOR flash memory segment “a $3 billion market [per year] with no growth.” Market researcher IC Insights backs that assessment, citing a 25 percent decline in the NOR flash market in 2011. “While the market for NAND flash memory is forecast to top the growth list, NOR flash is forecast to be at the bottom of the list with the biggest percent decline in sales for 2012.” IC Insights predicts a 14 percent drop in the NOR flash market in 2012.

So why go after a shrinking market?

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That's good news for a small fabless company, but not so much for larger memory makers. NOR flash no longer appears to be the focus for either Micron or Spansion. At Micron, sales of NOR flash products were only 10 percent of total net sales for its most recent quarter. Spansion appears preoccupied with its partnership with Nuance Communications, a move designed to accelerate voice recognition innovation for embedded technologies. 

Meanwhile, Taiwan-based NOR flash makers like Windbond and Macronix are in a tougher spot, Zhu said, because they bear the burden of huge fab investments. “If you need to worry about when to buy new equipment at your fab to make new memory products, your decision on new technology [or] products tends to get delayed,” he said. That’s why IDMs are less agile than fabless companies.

Gigadevice sees a widening gap between the big IDMs (Micron, Spansion) and smaller flash makers (Winbond, Macronix). It hopes to fill the void.

Zhu defended GigaDevice's strategy this way: "If you can succeed in a market that everyone already thinks difficult and/or is getting out of, you win," adding, "Demand for NOR flash won’t disappear. It’s not a business that’s going to die.”

Based here, GigaDevice was founded in 2005 and has been profitable since 2010. It’s expected to ring up $150 million in revenues this year. “Since 2009, we are on the fast track and we double [or] triple our revenue every year,” claimed Zhou.

It offers a range of high-speed, low-power NOR Flash products, including: serial peripheral interface (SPI) flash, NOR MCP and parallel flash memories designed into embedded, consumer electronics and mobile communications devices. Samsung has been a NOR flash customer for two years. GigaDevice supplies 70 percent of the NOR flash memory chips used by Samsung's PC unit. They are used as BIOS chips inside the PCs.

Origins

Zhu founded GigaDevice with “a couple of guys who only know about memory.” The Tsinghua University graduate earned a master’s in electrical engineering at SUNY-Stony Brook in 2000, then spent eight years working in the U.S., including a stint at memory designer MoSys.

He eventually realized that China, which has done some development work, had no indigenous memory makers. In 2008, DRAM maker Shandong Sinachip Semiconductors was founded in Jinan with an R&D center in Xi’an. Sinachip acquired Qimonda’s China R&D center in 2009.