Despite stabilizing NOR flash prices, Silicon Storage Technology (SST) plans to convert all production at its foundry partner Taiwan Semiconductor Manufacturing Company (TSMC) to 0.12-micron by 2008 in order to suppress costs further, according to industry sources.

Price competition in the NOR flash market remains severe although prices in recent weeks appear to have stabilized, industry watchers observed. The low prices suggest that any further price down is unlikely, although NOR flash makers will still be exposed to stiff cost pressure, the watchers commented.

Although SST, as a fabless company, does not have to bear wafer fab operation costs, the severe price pressure has still prompted it to advance its processing node. With all its production at TSMC converted to a 0.12-micron process, SST's production costs could shrink by as much as 30-40%, the sources estimated.

Macronix International Company (MXIC), in the meantime, is also adopting a similar strategy to shrink costs. Company chairman Miin Wu previously mentioned that the company plans to speed up its production of NOR flash on 0.13-micron in the fourth quarter. The company currently has most of its NOR flash fabricated at 0.15-micron with only 17% being made on the 0.13-micron node.

In related news, as Intel and partners are planning to step up promotion of Mobile Internet Devices (MIDs) in 2008, industry watchers are optimistic about the likely impact on SST's performance. SST is expected to become the major NOR flash supplier for the devices, delivering over half of the required chips for the segment.