Matrix's 3D memory chips target game devices

The Santa Clara, Calif.-based company formally announced on Monday the second generation of its unusual memory chips, which consist of several layers of transistors rather than a single plane.

Layering transistors cuts down on the surface area of the chip, enabling more to be popped out of a single wafer. That, in turn, reduces manufacturing costs. And the real estate on a silicon wafer isn't cheap, said Dan Steere, vice president of sales and marketing at Matrix. Producing an acre of conventional silicon transistors costs about $1 billion, he indicated.

Matrix's chips, in quantities of 1,000, cost about $9 each. Equivalent flash memory chips cost about $15 each.

"We can make memory chips that are a lot denser and therefore cheaper," Steere said. "If you have real expensive real estate, it makes sense to build skyscrapers."

The big difference is that consumers can record data to flash memory, erase it, and then re-record the data. In Matrix's chips, data gets recorded when a microscopic fuse between two wires blows. (See photo). Hence, the data can't be erased or recorded over, a significant disadvantage.

As a result, the potential market is much smaller. The company is primarily targeting industrial customers that want to record videos, songs or other files permanently onto a chip. Mattel, for instance, has adopted the chip to store cartoons on its Juice Box, a portable video player.

Another potential customer is Nintendo. The game giant invested $15 million in Matrix in early 2003, stating that the memory format supported the requirements of its Game Boy Advance device and that it hoped to use the chips in the future. Sony, Seagate Technology and Kodak are also investors.

Nintendo is slated to release its Nintendo DS handheld later this week. Steere would not comment on any deals with Nintendo.

An unnamed Japanese manufacturer that is not Nintendo, however, has already agreed to adopt the company's chips for a consumer electronics device, Matrix has said.

Although Matrix had to delay its chips for nearly two years, the announcement marks a milestone in the industry. Several universities in the 1980s experimented with the idea of three-dimensional chips, but most of the ideas sputtered. In 1998, Stanford University professor Thomas Lee and former Transmeta circuit designer (and former Stanford professor) Mark Johnson formed the company with the idea of reviving the concept.

Board members include Mike Farmwald, who co-founded Rambus, and former AMD President Atiq Raza.

The company actually started shipping its second-generation chips in July but did not provide many technical details. The chips are made on a 150-nanometer process, meaning that the average feature length is about 150 nanometers. (A nanometer is a billionth of a meter). The company manufactures its chips at Taiwan Semiconductor Manufacturing Co..

Matrix has already produced about a million chips in four months and is now producing a million a month.