KINGSTON INCREASES RAMBUS CAPACITY
Kingston, Toshiba supply
chain pact to lop weeks off
DRAM production cycle
By Jennifer Baljko Shah
Electronic Buyers' News
(06/12/00, 05:49:18 PM EST)
Kingston Technology Co. today will take the wraps off
a new supply-chain management program that aims to
shorten the DRAM wafer-to-module cycle time by
several weeks and potentially stir the industry's
competitive pot.
Building on its existing relationship with chip maker
Toshiba America Electronic Components Inc.,
Kingston will bring many of the steps associated with
the packaging, test, and assembly process in-house,
a move that is expected to shave more than six weeks
from the cycle and improve flexibility in meeting
end-user demand, executives from the two companies
said.
?Typically, semiconductor [manufacturers] make the
wafer and send it somewhere else to slice it up into
separate components. From there, it goes to another
facility where the leads are put on or the pin
configuration is done,? said John Sutherland, a
Kingston fellow. ?That chain of events takes eight to 10
weeks. We've built a facility that brings those
processes into one place. We estimate that we can
get from the wafer stage to the module stage in seven
to 10 days.?
Kingston, Fountain Valley, Calif., will provide Toshiba
with manufacturing services that extend from the
receipt of silicon wafers through die packaging and
testing to the assembly and testing of
customer-specified memory modules.
The wafers, which will be fabricated at Toshiba's fab,
Dominion Semiconductor LLC, in Manassas, Va., will
be packaged at a Fountain Valley facility that is being
referred to as Kingston's Payton Project, the
companies said. The chips will then be transferred to
an adjacent Kingston building for module assembly
and test, with finished product shipped directly to U.S.
customers or exported to other countries. The process
is expected to take days rather than weeks.
Kingston, which has invested $100 million in the
Payton facility and plans to spend another $200
million to $300 million on additional equipment, will
initially produce a million SDRAM and PC-100 devices
a month, Sutherland said. Later this year, that number
is expected to reach 6 million units and include
Rambus-based products. The facility successfully
turned out its first lots for Toshiba on June 2,
Sutherland added.
Though the project's first pass is targeted at the North
American market, Kingston is planning to add similar
capabilities in Taiwan and Ireland to address the
Asian and European markets.
The ultimate goal behind these advanced supply-chain
management services is to meet time-to-market
requirements with as much flexibility as possible,
Sutherland noted.
?We think this represents a significant change to the
way memory products will go to market,? he said. ?In
the industry, there is resistance to change. There is
the notion that when you find something that works,
you don't want to mess with it. But there are
interesting changes under way in the market,
particularly when it comes to time-to-market issues.?
According to observers, the undertaking represents a
change of direction and will be closely watched by
others.
?This is a totally new and interesting concept for the
DRAM industry,? said Sherry Garber, an analyst at
Semico Research Corp., Phoenix. ?Kingston is
changing the definition of what used be called a
third-party supplier and is definitely looking more like
a partner. It's a very innovative project, but it's also
very ambitious. Certainly, though, other companies
will be looking at how Kingston will be able to do this.?
For Toshiba, the deal is the next step in a
long-standing relationship with Kingston and an
opportunity to focus on its core competency of
technology development, according to Stephen
Marlow, vice president of memory operations at
TAEC's Semiconductor Group in Irvine, Calif.
Kingston has conducted just-in-time manufacturing
and order fulfillment of modules for a number of
years, and about 18 months ago, the companies
began discussing the best way to solve supply-chain
challenges such as reducing cycle time.
As a result of those talks, Kingston agreed several
months ago to take on additional supply-chain
management, global-logistics, testing, and
order-processing responsibilities for Toshiba's global
DRAM business in Asia, Europe, and North America.
The two companies have begun addressing these
more complex issues. ?Our fundamental competency
lies in technology development, component
development, and wafer fabrication. ... Our ultimate
goal is to improve our flexibility to our end user
through shortened lead times, faster response time,
and seamless global interfaces,? Marlow said.
?Kingston is in a class by itself as a module-making
company. Their capabilities go beyond module
making and into a supply-chain management
environment.?
Adding this capability boosts Kingston's supply-chain
expertise, Sutherland said. While Kingston is planning
to offer this capability to other chip makers, he
declined to say who the potential customers might be.
?We're doing this as a service to the semiconductor
companies that we make modules for,? he said. ?We
want to be known as the supply-chain wizard. Our
motto is becoming, 'Give us a supply-chain problem,
and we'll find a way to solve it.'?
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