SST controls the market for 512-kbit and lower-density flash, with roughly a 60 percent share, according to Web-Feet Research Inc. (Monterey, Calif.). At the 4-Mbit density, it provides roughly a third of all units.

But as a fabless company that relies on foundries, SST has been unable to compete in the market for the higher-density devices required by cellular-handset makers, said Jason Feinsmith, business director for the standard memory group at SST (Sunnyvale, Calif.). Only about 2 percent of SST's sales of $275 million in 2002 went to the cell phone market, where the average weighted density of flash memory consumption that year was 45 Mbits.

Having developed self-aligned 0.18-micron CMOS technology that delivers a competitive memory cell size, SST is now ready to take on the larger flash suppliers, Feinsmith said.

"We haven't had the high-density products until now. But we do have relationships with many of the cell phone manufacturers in Asia because we supply them with low-density flash for other products. We are looking to serve the low end of the cell phone market, particularly in Asia," Feinsmith said.

The company's Mul

ti-Purpose Flash Plus (MPF+) family of devices includes an erase-suspend/erase-resume feature. A suspend and erase function can be completed in just 4 milliseconds. Feinsmith claimed that competing NOR devices require many seconds to complete the function, presenting "a manufacturing bottleneck."

But SST faces some competitive challenges, said Jim Cantore, principal flash memory analyst at research firm iSuppli Corp. (El Segundo, Calif.). For one, a dozen companies already supply 32-Mbit devices to the cell phone market.

"SST has to get away from the low-density devices because it is hard to make money there. Because 60 percent of their existing sales are to Hong Kong, China and Asia outside of Japan, they do have regional strengths. But they still will have to fight for market share," Cantore said.

Jim Handy, director of nonvolatile-memory services at Semico Research Corp. (Phoenix), said the MPF+ family of parts is "a good thing for the company." Handy estimated acombined market of 910 million units for 32-Mbit and 64-Mbit NOR flash devices in 2003.

Semico said contract prices for 32-Mbit NOR flash parts dropped 30 percent this quarter, to below $3, and the 64-Mbit part dropped almost 25 percent, to less than $6. "This drop came at the worst possible time for SST," Handy said.

The spot market price has been $3.50 for a 64-Mbit device and $2.70 for a 32-Mbit device, according to iSuppli. "Even on a good day, pricing for flash has been very, very crummy lately," iSuppli's Cantore said.

SST plans to begin volume production of the 32-Mbit devices in the third quarter, at foundries Taiwan Semiconductor Manufacturing Co. Ltd. and Vanguard Semiconductor. The 16-Mbit and 64-Mbit chips will ship later this year.

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