IM Flash readies S'pore facility

IM Flash readies S'pore facility

Summary: update Micron-Intel NAND flash joint venture initiates hiring for Singapore facility. Analyst notes IM Flash needs to ramp up wafer capacity or lose market share this year.

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update SINGAPORE--IM Flash Technologies may finally be opening its delayed Singapore facility, a move an analyst said will be necessary to sustain market share.

One year after the NAND flash company closed shop, a recent hiring blitz may signal a comeback in the island-state. The joint venture between Micron and Intel on Saturday set out a two-page color recruitment advertisement in local broadsheet The Straits Times. On offer were 61 job positions, including process integration engineer, fab support engineer, AMHS (Automated Material Handling System) engineer, HR executive and system administrator.

IM Flash's Singapore fab, the first outside of the United States, had been due to open in December 2008. But in May that year, the company's executive officer Rodney Morgan said the facility would be delayed till mid-2009 due to factors such as the global economic downturn.

By October 31, 2008, a local report headlined that the company had abandoned plans for the S$4.8 billion (US$3.4 billion) plant, retrenching some 800 workers in the process.

Signs of a u-turn surfaced earlier this year, when Lazard Capital Markets' managing director and senior research analyst Daniel Amir wrote in a January research note that IM Flash had begun ordering tools for the Singapore fab. EE Times also reported in February that lithography tools had been ordered, with delivery expected in the second or third quarter of 2010. The ramp-up in capacity is expected to come in 2011, EE Times said, citing an unnamed analyst.

A spokesperson from Micron confirmed the moves. "IM Flash Singapore is moving forward with start-up activities, including placing purchase orders and preparing the facility for tool installs, most of which will commence in Micron's fiscal year 2011," which commences Sep. 1, he said.

The spokesperson noted that the exact timing of the ramp-up in production is "still being determined", and added that Micron is fully committed to "ramping the facility".

Ramp-up timely
Analysts view IM Flash's move as timely, given the developments in the market.

According to Gregory Wong, president of Forward Insights, the Singapore facility is necessary as IM Flash is "maxed out" on the current capacity of its fab--a 300mm facility in Lehi, Utah. Demand for NAND flash, he noted, has been driven by the smartphone segment, as well as from devices such as the Apple iPhone, iPod and iPad.

"Others, such as Samsung and Toshiba, can add incremental capacity through existing facilities, and all of them are doing so," he said. "However, because [IM Flash] has no way to increase wafer capacity this year, it will lose market share this year.

"IMFT needs to ramp up [the Singapore fab] to recapture market share and to service demand since [it is] constrained to meet customer demand."

Joseph Unsworth, Gartner's research director for NAND flash semiconductors, said NAND flash will achieve a year-on-year sales growth of 32 percent in 2010, and 21 percent next year.

On IM Flash's reported capacity ramp for 2011, he said: "Preparations for mass production to begin in early 2011 would be ideal because the fabrication would be relatively mature leading into the seasonal holiday build in 2011, and would also be able to commence production directly onto a 25-nanometer process geometry."

Using 25nm process technology would "yield the best cost structure" in the industry, explained Unsworth.

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