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Freescale Brings Chip to Market Based on Magnetic Technology
Summary: Freescale Semiconductor (NYSE:FSL), spun off from Motorola (MOT) two years ago, today plans to begin shipping a new type of memory chip that promises significant advantages over the two current types of memory chips. Freescale's MRAM memory is 'non-volatile' (ie. doesn't require constant electric charge) like NAND flash memory, which has recently experienced high growth alongside the cellphone and digital camera explosion, but MRAM can process information far faster than flash chips can. The other major type of memory chip - DRAM or SRAM - is cheap to produce but requires that constant charge to maintain information. Freescale hopes MRAM will eventually find markets addressed by both current technologies, but will begin by focusing on the server/network component, home-security and computer printer sectors, which currently combine a battery and an SRAM chip.
Comment on related stocks/ETFs: An important development in the field, but (1) due to the cost issue, it doesn't look like an immediate threat to the major flash memory producers -- SanDisk (SNDK), M-Systems (FLSH), Saifun (NYSE:SFUN) and Spansion (SPSN), and (2) the market for DRAMs is looking up on the eve of Microsoft's Vista rollout and the concomitant PC upgrade wave -- Freescale's innovation shouldn't affect that process significantly. Yet it's an incremental negative for DRAM producers Micron (NASDAQ:MU) and Infineon (IFX).