Toshiba Corp. is about to license OneNAND flash memory technology from Samsung Electronics Co. Ltd. in a move that could sour relations between Toshiba and M-Systems Flash Disk Pioneers Ltd., according to a note from American Technology Research (ATR).
ATR pointed out that M-Systems (Sunnyvale, Calif.) and Toshiba have been working on the development of Mobile-Disk-on-chip (MDOC) technology since 2003. That Toshiba is in discussions with Samsung on licensing competing technology 'is raising eyebrows' as Toshiba invested in M-Systems to pursue MDOC.
'We believe Toshiba's decision to license the OneNAND technology could be for both business and technical reasons. From a business perspective, Samsung has superior traction compared to M-Systems in terms of capacity and resources. We believe Toshiba being a big supplier to Nokia might be one of the reasons,' ATR said in its note.
Samsung is shipping three million OneNAND chips a month into cell phones while M-Systems has shipped 14 million MDOC chips in 2005.
M-Systems recently provided $100 million to Hynix Semiconductor Inc for production equipment in return for guaranteed production capacity with favorable terms (see Aug 25 story). Hynix was expected to team with M-Systems to develop the MDOC embedded flash drive for the mobile handset market, and be a second supplier of chips.
If Toshiba signs to the OneNAND camp this could leave M-Systems with a single supplier, ATR said. The company reiterated a sell rating on M-Systems and said it expected the stock to move towards $25 per share.
