Saifun Semiconductors (SFUN)

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M-Systems, Saifun don't rule out future collaboration

22.5.06 | 08:44 By Omri Cohen

The new quad-bit technology that M-Systems (Nasdaq: FLSH) announced this month attracted vast attention at the CIBC investments conference in Tel Aviv on Sunday. Analysts, institutional and other investors and reporters filled the halls to hear the word from the Israeli company and its rival, another Israeli company, Saifun Semiconductors (Nasdaq: SFUN).

Rivals? The main message the two companies had to deliver was that they aren't rivals at all. In fact, they may collaborate in the future; "These are complementary technologies, not competing ones," says Saifun's chief financial officer, Igal Shany.

His counterpart at M-Systems, Ronit Maor, was more cautious in respect to Saifun, but would say that if Saifun's technology achieves a strong presence in the market, collaboration should not be ruled out.

Less than two weeks ago M-Systems unveiled a breakthrough "impossible" quad-bit technology called 4x, which Maor called the latest and most important technological innovation from the house of M-Systems. It allows storage of 4 bits in each NAND flash memory cell, without need to upgrade production facilities.

Ronit Maor: The result is cheaper production processes at fabs - a savings of 30% - and greater profits.

Cells like that have been created before but their quality was abysmal, she explains: the new M-Systems development, based on an advanced controller, produces satisfactory quality.

Saifun offers another flash technology, NROM, allowing the storage of 2 bits per memory cell. In December it launched the Quad NROM, which also allows storage of 4 bits per flash cell. On the day M-Systems announced its breakthrough Saifun stock tumbled by 7%, prompting analysts to note that investors simply don't realize the technologies do not compete and could in fact complement one another.

Maor says that M-Systems is in negotiations to sell licenses to several NAND flash manufacturers and vows the company will be announcing at least one contract by year-end. The Israeli company would get royalties for each chip made using its technology. Right now Toshiba and Hynix make components for M-Systems.

Maor generally avoided talking about Saifun, but Shany had no such reticence: much of his address was devoted to M-Systems. "The only flash technology in the world that can contain 4 bits per memory cell is ours. M-Systems is not flash technology," he spelled out.

http://www.haaretz.com/hasen/spages/718522.html

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