Wikipedia defines “learning curve” as “a graphical representation of the changing rate of learning for a given activity or tool.” Learning curve theory is often referenced in the continuing efforts to reduce the average manufacturing cost of individual components, and the semiconductor utilization of the theory leads to an anticipation of decreasing manufacturing costs as a function of the number of units manufactured in a measured increment of time.
This concept is tied to another equally important, but often overlooked, role of Standards Setting Organizations (SSOs) to facilitate an infrastructure of support so that design activities can precede the actual availability of the next-generation product. This insures that there is an established level of demand waiting as the new device ramps into production.
The combination of these two elements traditionally established a series of applications for new memory products, by which progressively higher volume applications transition to the next generation of memory product as the price per bit declined. Although the highest volume application to convert was typically the desktop PC, that application tended to delay conversion to the newest and highest density product until the per bit cost was equivalent to the previous DRAM product generation. This tends to be the common approach to increase the market share for any new product, and the decline in the price per bit of the memory technology is eventually a function of the total number of components manufactured and the fundamental manufacturability of the technology itself. The concept leads to the careful selection of a market entry point and the identification of a series of applications with increasingly higher volume demand and increasingly lower cost targets.
The previous blog ($300M Investment in Crocus’ TAS-MRAM) described a major investment by RUSNANO in support of TAS MRAM. How does this measure up against the traditional approach described above? Let’s revisit the practical marketing aspects of the learning curve theory. Although the technical benefits of learning curve theory are well documented for established high-volume products, the theory is less effective as a tool for predicting the success of new technologies—particularly when those new technologies are being used to support new OEM applications.
The recent TAS MRAM fab commitment by RUSNANO marks a different approach in which a grand strategy is envisioned that includes a substantial up-front investment rather than waiting for the growth in volume that traditionally resulted from the replacement of the previous generation of products with ones of roughly similar performance attributes. The MRAM technology still has to demonstrate the manufacturing efficiencies and performance attributes to satisfy the needs of OEMs. The distinction in this case, however, is that the initial growth in manufacturing and R/D knowledge will occur at a faster rate than can be obtained by relying only on learning curve benefits and the application-by-application replacement of an existing high-volume product.
The potential impact we see from the RUSNANO investment in TAS MRAM is that this high level of investment may also encourage enough support among potential OEMs to commit to the new technology at an earlier phase in the product development cycle. As has been demonstrated by the increased usage of NAND to replace DRAM in some server architectures, the ability to influence the architecture of potential new OEM designs can be based on a broader set of criteria than the existing level of knowledge and specs.
It is this ability to potentially influence or stimulate new architectural designs that has now been introduced. Data sheet comparisons of performance specs are always meaningful, but let’s not forget that the objective with new technologies is to influence the OEM’s future designs and new applications, and not necessarily to create a superior set of performance attributes for existing applications.
We believe that the next phase of commercialization of new memory technologies has now begun. OEMs have a basic understanding of the potential of the technologies as well as a perception of the fundamental shift in target applications for the new and emerging memory technologies, and the forward edge of competition is now shifting toward the manufacturing infrastructure.
www.convergentsemiconductors.com - Global Analysis of Memory Strategies and Issues
