Phase Change Memory

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Semiconductor technology was the foundation of both Silicon Valley and most modern high technology industries, and is one of the most powerful forces underpinning modern civilization.

In 2010 hundreds of thousands, perhaps millions of products from thousands of industries that intimately affect daily life, from computers, cell phones, Internet servers, GPS, DVDs and other digital media, to microwave ovens, smart ID cards, sensors, medical equipment, space shuttles, and even Weapons of Mass Destruction such as cruise missiles, are possible primarily because of the advancement of semiconductor technology and devices.  Semiconductor manufacturers have the ability to produce tiny artifacts and devices that store tremendous amount of information and perform complicated logic instructions at the speed of light, making most of these products feasible and affordable not only by the average nation, but by the average household and, soon, the average individual. There are over four billion mobile phone subscriptions, for example, out of roughly seven billion people, and by the end of this decade in 2020 there are expected to be another four billion.

Semiconductor memory is necessary for the proper functioning of almost all electronic and many medical and military products.  There are a wide variety of memory devices with different characteristics today.  If a single unified memory, one that could work across virtually all types and scale, from the very tiny to the massively large, could be developed, the cost and capabilities of semiconductors and devices that use them could enable lower costs and larger markets.

FNC is pleased to report that just such a breakthrough now exists. For the first time in the sixty year semiconductor history, a unified memory, called phase change memory (PCM), has emerged.  PCM has superior performance to legacy memory technology and can be fabricated at less than one-tenth of the cost with the existing semiconductor factories, or fabs.   PCM also can replace other mass storage types such as the hard disk drive, an essential element for today’s information world. http://en.wikipedia.org/wiki/Hard_disk_drive

The market for semiconductor memories is over $100 billion annually.  With new applications such as hard disk drive, the total aggregate value of markets that PCM could potentially address will grow to a trillion dollars by 2020.

PCM has been at the research and development stage for more than three decades and reached the commercialization stage only recently.  Today PCM technology is dominated by a few semiconductor giants and start-ups in the world including one with major operations in China.  This company, founded by world leaders in semiconductor memories, holds several key PCM inventions and is financially supported by the Chinese government, which provided the company’s initial operating capital infusions. The Chinese government has also granted several hundred million US dollars to academic institutes in China for basic PCM research beginning in 2007.

The first commercial PCM product is expected to be introduced in late 2010 or early 2011 in small quantities.  Major products such as solid state disks for hard disk replacement will be available in 2014.  After that the market will start picking up at an accelerated pace speed by production capacity, as it is expected that demand will increasingly exceed production. Projections indicate that by 2017 the PCM market for mass storage alone will require more than 800 news fabs, or roughly four times the entire world-wide semiconductor capacity in 2009, a number that it would be extremely challenging to reach, considering the vast capital requirements of $3 billion per fab.   Because of severe imbalance between supply and the demand, with demand outstripping supply, PCM fabs will have significant profit and margin in the foreseeable future.  Perhaps most impressive is the projection that PCM will continue to be the driver for semiconductor industry for the next 50 years.

As governments interested in economic development explore their options for technologies that can give both immediate and long term benefits to their citizens and continue to search for alternative long-term businesses beyond oil or other natural resources, a local semiconductor industry based on Phase Change Memory should be on the short list because it is potentially a very attractive candidate  for three reasons.

1. Cost as a high barrier to entry: The first reason is PCM can produce dramatic return on investments and requires intensive capitals affordable only by a handful of companies and countries in the world.  Only a few of the very largest entities can enter into the PCM industry arena.
2. PCM, like semiconductors, is a strategic commodity: The second reason is that semiconductor memory is, like oil, a strategic commodity essential for world economy and civilization. Control and even dominance of semiconductor memory commodity will be a natural transition from traditional oil business in resource rich countries, or traditional memory and processing industries in developed countries.
3. PCM industry can still be entered with modest high tech national capacity: The third, and most important, reason is that PCM is new technology, and no nation has an advantage that cannot be overcome or matched by another nation in the near term. The game is not already over.  Unlike many other high-tech industries that are very difficult if not impossible to penetrate and even become a leader by a new entrant or recent startner, due to enormous technology challenges and other political and business restrictions, PCM can be accomplished by perfecting a few technology core competences.  The remaining 95% of the technology is standard technology readily available today.  PCM opportunity is analogous to Google in that Google has a unique search engine and has been able to implement its business plan by building on the already established Internet platform.  The key for the PCM is in the hands of FNC and its good relationship with a few PCM leaders including the above mentioned Chinese company.

Going forward, FNC’s plan to promote and achieve success with PCM can be briefly summarized as follows:

1. Raise the capital to fund the development of PCM with its pioneers and their strong alliances with the largest mass storage users and semiconductor companies in the world.
2. Control and establish PCM fabs through joint ventures with the invested Chinese company.  Because these fabs require significant human and other resources such as water, it is recommended that FNC will create and develop an industrial park in China.  The Park, with PCM fabs and other related high-tech resident companies, will be the platform for PCM production, training, and technology transfer.’
3. Set up design and product companies.  This is accomplished through technology transfer from the invested Chinese company and companies in the industrial park.  The design and product companies will focus on PCM and thousands of other spin-off products such as smart ID cards.  It is estimated that 200,000 jobs will be created between 2016 and 2020.
4. Create center for Semiconductor Commodity Futures Exchange.  Unlike other major commodities such as oil, soy beam, etc., current semiconductor products either do not have generic standards or they lack supply chains to insure exactly timed delivery.  PCM can be traded effectively in a futures exchange, because it has generic standards as well as tremendous supply and demand channels.

FNC, after taking the four actions above and in cooperation with our partner companies and countries, intends to be a leader in production and distribution of the PCM and will be in the position to help create semiconductor futures exchange in partner nations with advanced financial markets.

The proposed plan is help create a technology empire of great significance.  The product is a strategic commodity which is essential for the world economy through the 21st century.  Hundreds of thousands of jobs in the fields of technology and finance will be created by 2020.  The GDP contribution from this product and many spin-offs will be more than $30B a year beginning 2020.  Furthermore, because the demand for PCM will continue to exceed the supply in the foreseeable future, return on investments will should exceed other market returned handily.