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Thomson to use 3D chips in storage cards

The company gives a strong endorsement to chip start-up Matrix Semiconductor by incorporating its products. Execs say the price tag will make the cards stand out.

A European electronics giant will begin to incorporate 3D memory chips from Matrix Semiconductor in portable storage cards, a strong endorsement for the chip start-up.

In the second half of this year, Thomson Multimedia will incorporate Matrix's 3-D Memory in memory cards that can be used to store digital photos or music. Alhough the cards plug into cameras, Thomson is also working on card readers that will allow consumers to view digital photos on a television, said David Geise, Thomson's vice president of accessories products.

What makes the Thomson/Matrix cards different from competing flash cards from Sony and Toshiba, though, is price, executives say. Because of Matrix's chip design, a 64MB Thomson card will cost about as much as camera film does today, or close to $10, according to Matrix estimates. To further strengthen the relationship with film, the cards will be sold under the name Technicolor Digital Memory Card.

Similar flash memory cards from other companies cost $38 or more--though consumers can erase and rerecord data on them, unlike the Matrix cards. As a result of their price, consumers buy very few of them. Thomson, by contrast, expects to market its write-once cards in retail outlets such as Wal-Mart.

"These will be much cheaper than flash cards," Geise said. "We view the price equation (with standard film) as being very competitive."

Matrix's memory chips contain many more layers of circuits than competing semiconductors because of an intricate web of vertical electrical connections and layers of microscopic films incorporated into the chip. By building up rather than just out, Matrix can shrink the chip footprint and thus squeeze far more chips out of a single wafer, cutting costs dramatically.

"There is no wasted space in the silicon," Tom Lee, one of the company's founders and a Stanford University professor, said last month. Lee likened the design of Matrix's chips to origami sculptures.

The concept of 3D chips, though, has floated around Silicon Valley for years without ever hitting commercial nirvana. Several universities conducted 3D chip experiments in the 1980s, but the experiments failed because the chips required exotic materials or contained unusual designs.

Matrix was founded in 1998 when fellow company co-founder Mark Johnson asked Lee about the 3D experiments from 20 years ago that never seemed to materialize.

Chip designers also have found ways to shrink transistors and beef up the performance with more conventional designs. Intel and Advanced Micro Devices, for instance, will shrink the size of their flash memory chips this quarter, which will drop costs, increase memory capacity and increase volume.

Still, the fact that Thomson has agreed to adopt the chips to some degree shows that at least one major company considers the project commercially viable. Sony and Eastman Kodak are also investors in the company.

The first Technicolor cards will offer 64MB of memory; versions with 128MB and 192MB will appear later. The first Matrix 3-D chips will contain 64MB. Taiwan Semiconductor Manufacturing Co. is producing the chips on behalf of Matrix.