Cypress Semiconductor Corp. has formed a subsidiary to develop magnetic RAMs using technology licensed from a start-up company located in Eden Prairie, Minn.
The creation of Silicon Magnetic Systems in San Jose was disclosed today at Cypress' annual meeting. The product line has the potential of developing into a $100 million business over the next few years, said T.J. Rodgers, chief executive officer.
Cypress will be competing with a number of companies, including IBM, Motorola and Infineon, to commercialize large density MRAMs. "They don't exist yet, and nobody's quite sure how to make them exist," Rodgers said. "I believe it's going to work and I believe we'll be first to make it work."
The company is pumping $22 million in research and development this year to bring a product to market, roughly 10% of Cypress' total R&D budget. The goal is to bring a working memory to Cypress' sales conference in August, he said. "I hope to have 256,000 bits by the end of the year."
Rodgers said that MRAM could offer the best features of static RAM and flash memory. Since it has a small cell, they can be made made big, cheap and fast, with infinite endurance, he said.
Cypress recently entered into a technology exchange agreement with NVE Corp. Under the pact, Cypress made an equity investment in NVE, and the companies gain rights to each other's MRAM technology.
Cypress invested $6.228 million in NVE in exchange for 3.433 million shares of NVE common stock, with an option to buy up to an additional two million shares for $3 per share. NVE will nominate a Cypress executive for election to its Board of Directors.
In addition to Cypress, NVE has technology agreements with Agilent Technologies, Motorola, and Honeywell International. NVE retains the right to license its technology to other companies.
Longtime Cypress executive Jeff Kaszubinski has been named CEO of Silicon Magnetic Systems.
Separately, Cypress is exploring several options to get into the manufacturing of 300mm wafers. "We're currently running at half capacity, but I anticipate a year from now we'll be straining" to meet demand, Rodgers said. Eventually, having 300mm capacity is "where we've got to be. If you don't do 12-inch, you're not a silicon company."
Building a dedicated 300mm-wafer fab on its own, however, isn't economically feasible, he said. "We'll need to partner to reduce the risk." The partner would likely be in a different type of chip business, so that there's less chance both companies will be hurt at the same time because of fluctuations in the market, Rodgers added.
Another option would be to make an investment in an existing foundry company, or add 300mm capability to its fab in Minnesota. At this point, the latter option is most likely to happen, with one of the other two approaches also adopted, Rodgers said.
On the subject of Bluetooth, Rodgers said that that market won't take off until the silicon can be sold for $5, half of the current price. "I think we can compete in Bluetooth at $5 and be real happy," he said. Cypress isn't shipping a product in that market yet, Rodgers said.