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Infineon adds a little flash

The chipmaker is entering the market for flash memory with the intention of becoming a dominant player within the next three years.

Infineon Technologies entered the flash memory market on Wednesday and set its sights on becoming one of the top three producers in its segment of the market over the next three years.

Best known as a manufacturer of dynamic RAM (DRAM) for computers, Infineon said it has begun production of TwinFlash, its first flash memory chip, at one of its plants in Dresden, Germany.

Flash, memory chips that can retain data when their power supply is switched off, is widely used in cellular phones and other electronic devices. However, the variety that Infineon manufactures, known as NAND, is more popular for handhelds, such as music players, memory cards for cameras, and key ring storage devices that connect to a PC via a Universal Serial Bus port--the interface between a computer and add-on devices.

NAND stands for "N and," a reference to how data is retrieved. The chips can hold far more data than NOR (N or) chips and are cheaper at comparable densities. NOR, used most often to store data in cell phones and set-top boxes, is less prone to data corruption.

Infineon is likely eyeing the successes of other DRAM makers, such as Samsung, in the flash market. For its part, Samsung, whose primary flash product is also NAND, became the top flash maker during the third quarter of 2003, thanks to a 50 percent year-over-year jump in sales, according to research firm iSuppli.

Indeed, Infineon indicated that the size of the market and the potential growth rates of flash products, as well as the relative ease of producing flash chips, were what appealed to the company.

Citing figures from research firm Gartner, Infineon pegged the flash market at $4.4 billion in 2004 and said that it is expected to be the fastest-growing segment of the overall memory market in the near future.

The company's TwinFlash chips, derived from a joint venture with Israeli company Saifun Semiconductors, can be produced using the same equipment as its DRAM, thus giving its manufacturing plans some flexibility, Infineon said.

"Infineon has expanded its memory product portfolio significantly by including flash and can now allocate its memory production capacities flexibly between DRAM and flash," Harald Eggers, CEO of Infineon's Memory Products Business Group, said in a statement. "The TwinFlash technology allows us to produce flash chips on the existing equipment used for DRAM manufacturing and consequently to enter a new market with basically no investment in manufacturing equipment," Eggers said.

Infineon's first TwinFlash chip offers a density of 512 megabits; however, the company says it will increase the density of its flash chips to 2 gigabits, over time.

Though the company is starting off slowly, its goals are lofty. Infineon said it aims to become one of the top three players in NAND flash chips by 2007.

Competition will be stiff. Aside from Samsung, the chipmaker will face a challenge from Toshiba, the second-largest NAND player, and NOR flash makers, such as Intel and the Spansion joint venture between Advanced Micro Devices and Fujitsu and Intel.