Flash memory maker Spansion has started production of 65nm, 300mm wafers at a new fab in Aizu Japan for NOR flash memory chips, aiming to move to 45nm next year to keep ahead of coming competition.

The move is vital to take on the combined might of Intel and STMicroelectronics in the Numonyx NOR flash joint venture that will be launched later this year with headquarters in Switzerland. All three companies are making NOR chips, primarily for mobile phones.

Sapnsion's new fab, SP1, will be able to handle 20,000 300mm wafers a month at full capacity, but that will depend on market conditions, says Bertrand Cambou, CEO of Spansion. The initial production is low with just a few hundred wafers going through the plant at the moment making Mirrorbit NOR flash chips by December, but the company is ramping to 2000 wafers a month, an investment of £1.25bn.

The 65nm process was developed at Spansion's Silicon Development centre in Sunnyvale, California, (which cam from processor maker AMD when the flash operation merged with Fujitsu's flash business) and copied exactly to the fab in Aizu.

Half the fab is being used at the moment, and it has a flexible high speed wafer handling system that allows equipment to be placed anywhere in the fab, allowing more space to be used and throughput to be increased, says Jim Duran, executive vice president and director of operations.

Spansion claims to be the largest NOR flash memory supplier with 32% of the market in the first half of this year, with 22 per cent of the market for the Mirrorbit products. Intel at 22 per cent and STMicro at 14 per cent provide Numonyx with a potential market share of 36 per cent. But NAND flash giant Samsung is also expanding in the NOR market with 13 per cent, up from 8 per cent in 2005.

Spansion