MOS MEMORY MARKET INTRODUCTION GROWTH MATURITY SATURATION DECLINE (OBSOLETE) 16M DRAM 1M SRAM. HIGH SPEED CMOS/BiCMOS 16K SRAM 4M ROM 1M ROM

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1 1 THE MOS MEMORY MARKET Overview The MOS memory market detailed in Memory 1996 consists of DRAM, SRAM, EPROM, and flash memory devices. Market and technology trends for each product segment will be covered in separate sections. ROMs and EEPROMs will be referenced later in this section. The memory market is often looked upon to introduce new and innovative devices. Advances in technology help bring sophisticated new products to market. As electronic systems with new ICs are introduced, existing IC components move further along the product lifecycle. Figure 1-1 provides ICE s view of where many memory ICs are situated in the 1996 product lifecycle. SALES PRODUCT INTRODUCTION GROWTH MATURITY SATURATION DECLINE (OBSOLETE) RAMs 64M DRAM 4M SRAM 1M SRAM 16M DRAM 4M DRAM 1M DRAM 256K DRAM 1M SRAM 256K SRAM 64K SRAM 64K DRAM HIGH SPEED CMOS/BiCMOS 16K SRAM 256K SRAM 64K SRAM 16K SRAM 4K ECL SRAM 64K ECL SRAM 16K ECL SRAM ROMs 32M ROM 64M ROM 16M ROM 8M ROM 128K PROM 4M EPROM 16M EPROM 1M EEPROM 4M EEPROM 256K EEPROM 16M Flash 4M Flash 32M Flash 8M Flash 4M ROM 1M ROM 64K PROM 1M Flash 2M Flash 256K ROM 32K PROM 16K PROM 256K Flash 512K Flash 64K ROM 1M EPROM 256K EPROM 64K EPROM 32K EPROM 512K EPROM 128K EPROM 32K EEPROM 16K EPROM 64K EEPROM 16K EEPROM 4K EEPROM Figure 1-1. Memory Product Lifecycle (1996) 2175A INTEGRATED CIRCUIT ENGINEERING CORPORATION 1-1

2 Figure 1-2 shows the worldwide IC and MOS memory markets through 21. ICE believes MOS memory devices accounted for 42 percent of all ICs sold in, the highest level in semiconductor history. As shown in the figure, MOS memory products are forecast to grow to 36 percent of the IC market in the year 21. From to, the MOS memory market grew at an annual rate of 44 percent per year. From 1996 to the year 21 the MOS memory market is forecast to average 21 percent growth per year. During the -21 time period, the MOS memory market is forecast to have a cumulative average annual growth rate of 24 percent (Figure 1-3). 3, = Percent Memory of Total IC Market 25, Dollars (Millions) 2, 15,, 5, WW IC Market ($M) WW Memory Market ($M) Other IC Market ($M) Percent Memory of IC Market 33% 36% 4 26% 29% 31% 36% 34% 33% 33% 34% ,5 51,875 67,95 9,35 128,68122,48138,86162,52191, ,43292,876 12,35 14,84 21, 32,455 53,465 41,675 45,69 53,1 62,925 78,215,9 34,195 37,35 46,95 57,85 75,215 8,733 93,116 19,42 128,75 154,23 186,976 26% 29% 31% 36% 4 34% 33% 33% 33% 34% 36% 1899E Figure 1-2. MOS Memory Percent of Total Worldwide IC Market ($M) Figure 1-4 provides a complete review of the MOS memory and IC markets. Coming as no surprise, DRAMs were the catalyst for growth in the MOS memory market. The DRAM market grew very strongly in,, and. Through the balance of the decade, DRAMs will continue to be a driving force not only in the MOS memory market, but also in the total IC market. 1-2 INTEGRATED CIRCUIT ENGINEERING CORPORATION

3 12,, Dollars (Millions) 8, 6, 4, 2, - CAGR = 44% CAGR = 21% -21 CAGR = 24% MOS Memory Market ($M) Percent Change 12,35 4% 14,84 21% 21, 4 32,455 55% 53,465 65% 41, ,69 1% 53,1 16% 62,925 19% 78,2 15,9 24% 36% 1893D Figure MOS Memory Market WW IC Market ($M) WW MOS Memory Market ($M) WW Memory Percent Change Percent Memory of Total IC DRAM ($M) SRAM ($M) EPROM ($M) Flash ($M) ROM ($M) EEPROM ($M) Other Memory ($M) Total ($M) ,5 51,875 12,35 14,84 4% 21% 26% 29% 6,65 8,525 2,49 2,89 1,435 1, ,25 1, ,35 14,84 67,95 9,35 128, ,48 138,86 162,52 191, ,43 292,876 21, 32,455 53,465 41,675 45,69 53,1 62,925 78,2 15,9 4 31% 13,14 3,295 1, , , 55% 36% 23,42 3,755 1, , ,455 65% 4 4,835 6,75 1,385 1,86 1, , % 29,18 5,86 1,245 2,65 1, ,675 1% 33% 31,335 6,74 1,12 3,63 1, ,69 16% 33% 36,45 7,82 1,85 5,1 1,415 1, ,1 19% 33% 42,895 9,3 1,45 6,415 1,385 1, ,925 24% 34% 53,92 11,16 1,3 8,335 1,34 1, ,2 36% 36% 77,55 13,4 99 1,85 1,265 1, , F Figure 1-4. MOS Memory Market Forecast Figure 1-5 shows how DRAMs are forecast to remain dominant through the year 21. Flash memory devices are forecast to gain share of the total memory market through 21 (Figure 1-6). DRAMs will maintain roughly 7 percent of the memory product marketshare through the time period. The SRAM percent of total memory market will remain about level through the end of the decade. The ROM, EPROM, and EEPROM markets will remain flat or decline over the next five years. INTEGRATED CIRCUIT ENGINEERING CORPORATION 1-3

4 12,, 8, Dollars (Millions) 6, 4, 2, DRAM ($M) SRAM ($M) EPROM ($M) Flash ($M) 6,65 2,49 1,435 8,525 2,89 1, ,14 23,42 4,835 29,18 31,335 36,45 42,895 53,92 3,295 3,755 6,75 5,86 6,74 7,82 9,3 11,16 1, , ,385 1,86 1,245 2,65 1,12 3,63 1,85 5,1 1,45 6,415 1,3 8,335 77,55 13,4 99 1, D Figure 1-5. Dollar Volume of Select MOS Memory Market Segments MOS memory consumption was headed by the North American region. In, the North America region consumed 37 percent of all MOS memory products (Figure 1-7). The ROW region has become a greater consuming force in the world of MOS memory products. In, its share of market grew three percentage pointsall at the expense of the Japanese market. Taking advantage of low-cost labor, many foreign electronics manufacturers now conduct more of their business in countries that make up the ROW (China, Singapore, Taiwan, etc.). At the same time, indigenous industry continues to expand. Strong local economies led by demand for PCs and other electronics systems, will only lead to further consumption of MOS memory devices in the ROW region in the coming years. Figure 1-8 leaves no doubt that the Japanese companies remain the largest producers of MOS memory devices. However, the figure also points out how quickly production can increase or decrease. The ROW producers increased their marketshare six percentage points, while Japanese companies MOS memory production slipped seven points. 1-4 INTEGRATED CIRCUIT ENGINEERING CORPORATION

5 DRAM SRAM ROM EPROM EEPROM FLASH OTHER TOTAL: 76% 11% 4% 3% 3% 1% $53.5B DRAM SRAM ROM EPROM EEPROM FLASH OTHER TOTAL: % 14% 4% 3% 6% 1% $41.7B DRAM SRAM ROM EPROM EEPROM FLASH OTHER TOTAL: % 15% 3% 3% 8% 1% $45.7B DRAM SRAM ROM EPROM EEPROM FLASH OTHER TOTAL: % 15% 3% 9% 1% $53.B DRAM SRAM ROM EPROM EEPROM FLASH OTHER TOTAL: % 15% 1% 1% $62.9B 21 2 DRAM 73% SRAM 13% DRAM 69% ROM 1% SRAM 14% EPROM 1% ROM EEPROM EPROM 1% FLASH 1% EEPROM OTHER <1% FLASH 11% TOTAL: $15.9B OTHER 1% TOTAL: $78.B 17213J Figure 1-6. MOS Memory Product Marketshare ROW 19% Europe 18% $32.5B Japan 26% North America 37% ROW 2 Europe 18% $53.5B Japan 23% North America 37% 18912F Figure 1-7. MOS Memory Consumption by Region Between and, the Japanese companies share of MOS memory production decreased 1 percentage points, while the ROW producers increased 1 points. Apparently, no marketshare lead is safe in the IC industry, even in a market that seemed solidly in the grasp of the Japanese. Production trends by company are highlighted for each memory segment in the following chapters. INTEGRATED CIRCUIT ENGINEERING CORPORATION 1-5

6 North American 2% European 4% North American 21% European 4% ROW $32.5B 23% Japanese 53% $53.5B ROW 29% Japanese 46% 2173B Figure 1-8. MOS Memory Production Listed in Figure 1-9 are marketshare figures for the top five worldwide MOS memory suppliers in. Together, the five firms accounted for half of all MOS memory sales during the year. ICE shows that Samsung continued as the leading supplier of MOS memory devices in and even increased its marketshare. Fueled by strong DRAM demand, its MOS memory sales surged well beyond its level. Likewise, Texas Instruments sizable DRAM sales (wholly-owned and joint-venture) moved it into a topfive slot among MOS memory suppliers in. Rank Company Sales ($M) Marketshare (%) Company Sales ($M) Marketshare (%) 1 Samsung 4,6 12 Samsung 7, NEC 3,44 11 NEC 5, Toshiba 3,4 1 Hitachi 5, Hitachi 3,15 1 Toshiba 4, Mitsubishi 1,83 6 TI 3,555 7 Other 16, ,825 5 Total 32,455 53, P Figure 1-9. Total MOS Memory Market Leaders The ROM Market Memory 1996 focuses mostly on headline-grabbing memory products. ROMs and EEPROMs, though no less important, do not generate nearly the excitement and splash of DRAMs, SRAMs, and flash memory devices. Still, they are important segments in the overall memory market and are briefly reviewed in the following paragraphs. 1-6 INTEGRATED CIRCUIT ENGINEERING CORPORATION

7 Read-only memories (ROMs) represent the least expensive type of semiconductor memory. They are used primarily for storing data in electronic equipment such as laser printer fonts, dictionary data in word processors, and sound-source data in electronic musical instruments. ROMs are also used extensively in video game software. The ROM market grew well through the first half of the 199 s, coinciding closely with a jump in PC sales and other consumer-oriented electronic systems (Figure 1-1). 2, 1,8 1,6 Market Units ASP Millions of Dollars and Units 1,4 1,2 1, ASP ($). Market ($M) 1,25 1,225 1,625 1,89 1,965 Units (M) ASP ($) Source: WSTS/ICE, "Memory 1996" 267A Figure 1-1. ROM Market History However, as noted in Figure 1-11, growth in this segment is forecast to drop significantly in 1996 before it slowly dwindles in size through the remainder of the decade. The primary reason for the decline is that the biggest market for mask ROMsvideo gamesis moving toward CD-ROM-based machines. Following several years of unit growth, ROM shipments appear to have peaked as well. Unit shipments were flat in and (Figure 1-12) and ICE anticipates a drop of approximately 2 percent in ROM unit shipments during INTEGRATED CIRCUIT ENGINEERING CORPORATION 1-7

8 2,5 2, Dollars (Millions) 1,5 1, Total Market ($M) 1,25 1,225 1,625 1,89 1,965 1,43 1,43 1,415 1,385 1,34 1,265 Percent Change 2% 3 16% 4% 27% 1% 3% 5% Source: WSTS/ICE, "Memory 1996" 2348D Figure The ROM Market Units (Millions) Total Units (M) Percent Change 13% 11% 1% Source: WSTS/ICE, "Memory 1996" 268 Figure ROM Unit Shipments 1-8 INTEGRATED CIRCUIT ENGINEERING CORPORATION

9 Despite the fact that high-performance game and other ROM applications are dwindling, demand for high-density ROMs has increased. As shown in Figure 1-13, ROM unit shipments are migrating toward high-density devices. While most ROM manufacturers have kept their ROM production at the 4Mbit level, UMC in Taiwan and Samsung in Korea among othersintend to develop mask ROMs beyond the 32Mbit density. Sharp, in late, began volume production of its 64Mbit ROM device Units (Millions) M M 13* 212* 297* M M * Includes 4M densities. Source: WSTS/ICE, "Memory 1996" 269 Figure ROM Unit Shipments by Density Although the rate of increase was slower than other volatile and non-volatile memory technologies, ROM average selling prices (ASPs) increased in the first half of the decade as densities trended higher (Figure 1-14). A smaller market moving toward higher densities will likely cause ASPs to trend upward in the second half of the decade. Low-voltage ROMs penetrated the market and have become increasingly popular in portable systems. Sharp, the leading ROM supplier, has added numerous 3V versions to its high-density ROM portfolio. Sharp also introduced a novel memory device that combines ROM and RAM on one chip. A customer can choose RAM or ROM on a page-bypage basis, solving memory mapping headaches for small, handheld systems. INTEGRATED CIRCUIT ENGINEERING CORPORATION 1-9

10 Dollars Total ASP ($) Percent Change 6% 2% 14% 3% Source: WSTS/ICE, "Memory 1996" 261 Figure ROM ASPs ($) Another interesting ROM development targeting the multimedia market is the Record- On-Silicon (ROS) device from Siemens. With a 5-percent reduction in die area compared with conventional ROM, the company claims the ROS could halve the cost of conventional ROM and push into markets for non-semiconductor storage, such as compact disks and photographic film. Few details of the technology are available now, but a 64Mbit version of the device is planned to be introduced in Japanese IC makers continued to hold a tight grip as ROM market leaders (Figure 1-15). Together, Sharp and NEC held the largest shares of the ROM market in and. Not all Japanese IC vendors are staying in the ROM business. Fujitsu, for example, announced its intentions to withdraw from the mask ROM business. It plans to cancel development efforts of its 32Mbit and other next-generation devices, and will stop producing and shipping its current line of 16Mbit and smaller products in ROM consumption by geographic region is shown in Figure The ROW region, where numerous ROM-intensive electronic games are manufactured, greatly increased its share of the ROM market in. 1-1 INTEGRATED CIRCUIT ENGINEERING CORPORATION

11 Rank Company Sales ($M) Marketshare (%) Company Sales ($M) Marketshare (%) 1 Sharp Sharp NEC 38 2 NEC Samsung Toshiba Toshiba Hitachi Hitachi Samsung Other Total 1,89 1, Q Figure ROM Market Leaders 8 North America Japan Europe ROW Consumption (Percent) North America Japan Europe ROW A Figure Regional ROM Consumption (Percent) INTEGRATED CIRCUIT ENGINEERING CORPORATION 1-11

12 The EEPROM Market The market forecast for electrically erasable programmable read only memories (EEPROMs) is shown in Figure In the EEPROM market grew 23 percent, following 2 percent growth in. For the time period, the CAGR for EEPROMs is forecast to be 16 percent. Due in part to military use, North America was the largest regional market for EEPROMs in (Figure 1-18). 1,8 1,6 1,4 Dollars (Millions) 1,2 1, Total Market ($M) ,6 1,225 1,48 1,755 Percent Change 2% 23% 4% 9% 14% 16% 21% 19% 2347C Figure EEPROM Market Growth North America 51% $885M Europe 24% Japan 1 ROW 13% Source: WSTS/ICE, "Memory 1996" 16792H Figure EEPROM Market by Region 1-12 INTEGRATED CIRCUIT ENGINEERING CORPORATION

13 EEPROMs offer users excellent capabilities and performance, and are available in either a serial or parallel design. Parallel EEPROMs are generally faster, are available in higher densities, offer high endurance and reliability, but are more costly on a price-per-bit basis than their serial counterparts. Until recently, parallel EEPROMs found little interest beyond the military market. Serial EEPROMs, though generally less dense and slower than parallel devices, are much cheaper. ICE believes that in, serial EEPROMs accounted for 9 percent of the $885 million EEPROM market (Figure 1-19). The largest serial EEPROM density shipping in volume was the 64Kbit device. such as Atmel, Xicor, and SGS- Thomson supplied the large majority of these devices. Serial EEPROM 9% Parallel EEPROM 1% $885M Figure EEPROM Market 2413A The largest parallel EEPROMs built in volume during were 1Mbit devices. They were used extensively, although not exclusively, in military applications. Parallel EEPROMs are of particular interest in the military because they offer more flexibility than other kinds of solid-state memory. Specifically, parallel EEPROMs can be erased bit by bit, whereas other types of memory such as flash can only be erased in larger block segments at one time. Parallel EEPROMs are found in military applications such as flight controllers, vehicle control systems, field communications equipment, secure radios, command and control systems, radar, and guidance subsystems. The lightness, ruggedness, and fast performance of parallel EEPROMs make them well suited for harsh environments. Consumer-oriented applications represented the largest end-use of serial EEPROMs in (Figure 1-2). Consumer applications span a wide variety of electronic systems but essentially involve systems where touch or push programmability exists. Office 7% Automotive 8% Computer-Related 7% Military/Aerospace 7% Industrial 15% 75M Telecom 2% Consumer 36% 1952C Figure 1-2. Serial EEPROM Applications (Units) INTEGRATED CIRCUIT ENGINEERING CORPORATION 1-13

14 Leading EEPROM suppliers are shown in Figure SGS-Thomson, Atmel, Xicor, and Microchip Technology continued to make strides in the market. EEPROM suppliers such as Information Storage Devices (ISD) also showed revenue increases. ISD s sales increased ten-fold from - as vendors of mobile telephones, games, pocket recorders, and greeting cards gobbled supplies of its devices that store analog signals in non-volatile memory cells. For these and other companies that manufacture them, the EEPROM business should not suffer as much as other segments of the memory market during Rank Company Sales ($M) Marketshare (%) Company Sales ($M) Marketshare (%) 1 SGS-Thomson SGS-Thomson Atmel Atmel Xicor Xicor 11 4 Microchip 6 8 Microchip National 45 6 National ISD 4 6 ISD 55 6 Other Total P Figure EEPROM Market Leaders 1-14 INTEGRATED CIRCUIT ENGINEERING CORPORATION