AMD announced a years ago it was selecting M-Systems Flash Disk Pioneers (Nasdaq: FLSH)’ technology as its preferred technology for data storage on its MirrorBit platform. I can imagine the M-Systems board meeting at which CEO Dov Moran joyfully announced the agreement with AMD, following which Eitan, an M-Systems director, probably told him, “Dov, this agreement is based on Saifun Semiconductors’ patents, which AMD is violating.” M-Systems, which invested $10 million in Saifun Semiconductors in its previous financing round at a company value of $400 million, undoubtedly heaved a sigh of relief for both the solution of its dilemma provided by today’s agreement and its good investment. Now AMD, Saifun Semiconductors, Fujitsu, M-Systems, and Tower Semiconductor (Nasdaq: TSEM), which holds 11.1% of Saifun Semiconductors, will join forces to battle Intel for the huge cellular market.
The advantage of Saifun Semiconductors’ NROM technology is that it makes it possible to reduce memory cell size by a factor of four. This has major consequences for the performance price in the entire flash chip industry, especially the manufacture of cellular devices with high-end multimedia applications, which are bound to reach the market. This sector is looking for more memory on less space, at lower prices. Saifun Semiconductors’ technology does all that much better than Intel, and with simpler manufacturing processes.
After two hard years, the venture capital funds that invested in Saifun Semiconductors are breaking out the champagne. So is the Israel Air Force alumni association, because Boaz Eitan and Tower Semiconductor co-CEO Yoav Nissan-Cohen, both former pilots, recruited them as investors in one of Saifun Semiconductors’ early financing rounds. |
