Hynix and Spansion Join Forces

Spansion and SK Hynix AllianceSK Hynix and Spansion have announced a strategic NAND alliance under which Hynix will serve as a foundry for low-density SLC NAND chips made for Spansion using Hynix’ advanced processing nodes.

These products, aimed at the embedded market, should serve to strengthen Spansion in a market in which the company thrives. In fact,  Spansion expressed this very well in their press release, citing: “Spansion’s recognized customer support and commitment for longevity of supply, which is highly valued in the embedded market, where Spansion has established relationships.”

The new chips will be manufactured in “4x, 3x, and 2xnm” process technologies.

The companies have also agreed to cross-license their patent portfolios.

You may be asking yourself: “What does Hynix get out of this?”  Although it’s quite clear that Spansion will be able to diversify its products to better support its embedded customers, it is not as obvious why Hynix would want to distract its efficient high-volume NAND flash manufacturing efforts to produce small volumes of low-density parts.

By cross-licensing Spansion’s patents Hynix gains access Spansion’s extensive patent portfolio including patents covering charge trapping flash.  Although today’s NAND does not use a charge trapping layer, it is highly likely that this technology will become almost universal to future flash processes.  It is an indispensable part of Toshiba’s BiCS and Samsung’s TCAT, both of which have been designed to extend NAND flash’s life past its scaling limit by building vertical structures.

These same patents are those licensed in June of last year by Samsung for $150 million. Spansion’s new management is taking advantage of the company’s strong patent portfolio to improve the company’s royalty stream (with Samsung) and its manufacturing strength and product portfolio (with SK Hynix.)

Both sides win!