Who is responsible for the invention of M-Systems Ltd.’s (Nasdaq: FLSH) promising x4 technology? On the face of it, there is no question. We’re talking about a development team of the Kfar Saba-based company. In a press release in May, and in an investors conference held at the same time, M-Systems declared that its new technology would revolutionize the NAND non-volatile flash memory market, which would boost the profitability of fabs without the need to change their manufacturing processes. The company added that it owned the intellectual property rights. Of course, everything will soon be handed over to SanDisk Corporation (Nasdaq:SNDK), after it completes its acquisition of the company.
x4 technology makes it possible to store four times the information on each memory cell, compared with the current capacity of 2-bit/cell multi-level cell (MLC). “Everything began in 2000 as an idea at the company, which made slow progress until we obtained a patent in 2004,” said M-Systems chairman, president and CEO Dov Moran at the unveiling. “We did what the industry said was impossible. There are quite a few people who said that 4 bits was probably unachievable, but we did it. This is, of course, not our final development in this direction, and we’ll continue to set impossible targets, assault them, and conquer them.”
If that is the case, why are we asking who is responsible? We’re asking because in an announcement to investors two weeks ago, M-Systems announced that “its x4 NAND flash technology was recognized as the “Most Innovative Flash Memory Technology” of 2006 by a panel of industry experts at the Flash Memory Summit” in San Jose, California. An honor indeed.
The press release’s subhead stated “x4 technology developed in collaboration with Tel Aviv University”. The press release went on to say, “M-Systems x4 technology was developed in collaboration with Tel Aviv University’s (TAU) School of Electrical Engineering and exclusively licensed to M-Systems, for use in flash memory products, by Ramot, the technology transfer company and commercialization arm of TAU.”
The press release also quoted Tel Aviv University president Prof. Itamar Rabinovich as saying, “This award-winning x4 technology and other technological innovations show that investing in academic excellence can deliver commercial results. Our cooperation with industry leaders such as M-Systems ultimately benefits society at large.”
I searched M-Systems’ website for any other mention that x4 technology was developed in collaboration with Tel Aviv University, and failed to find any. M-Systems mentioned Ramot for the first time in this press release about the recognition. It was not mentioned before, in, say, the explanation about the x4 technology.
It cannot be ruled out that such a sudden and clear reference to Tel Aviv University is part of a legal battle between M-Systems and Amir Ban, a former VP technology at the company. In a lawsuit recently filed with the Tel Aviv District Court against M-Systems and Moran, Ban claims that, in 2000, collaboration began with Prof. Simon Litsyn of the School of Electrical Engineering at Tel Aviv University in the context of his role at M-Systems. This is how he claims the new technology, which increases flash memory storage capacity and became known as x4, came to be. Ban claims that he and Litsyn founded a company called Data Factory, because M-Systems told him that it was not interested in developing the project, and even tried to interest Toshiba in collaboration in 2004. Ban claims that, after that meeting, Moran decided that he wanted to invest in the company after all, and denied the original contract.
Litsyn told “Globes”, “The roots of the x4 product are in 2000. That’s when we conceived the idea that developed into x4. In other words, the beginning was absolutely at the university in collaboration with M-Systems. By the way, I am staying neutral in the case between Ban and M-Systems.
Litsyn is now on sabbatical, and receives a salary from M-Systems as chief scientist of the company’s future technologies group. Scientifically speaking, he is the project leader.
“Globes”: What was your great breakthrough in the x4 technology?
Litsyn: “Opinions vary. For us, I think that it was the realization of what was storage capacity in terms of information theory. I think other places lacked sufficient depth in the subject, because we they mostly came to the field from physics. We saw leading physicists who don’t understand how flash companies process signals, and we had a great advantage here. I developed the product with two of my doctoral students: Idan Alrod and Eran Sharon.”
Were there worries that such a product did not exist? After all, everyone remembers what Saifun Semiconductors Ltd. (Nasdaq:SFUN) CEO Dr. Boaz Eitan said, even if he later apologized.
“I don’t know how I can respond to such comments, but I’m prepared to say that we laughed out loud at his comment. We had the product sitting on the desk, and functioning like clockwork. Some of this is related to physics and some is related to signal processing algorithms. It turned out that it’s possible to make a breakthrough there, too, not just in physics. In any case, we officially state that we have working samples, and I cannot say more. I can only say that I’m very pleased at the present situation.”
Published by Globes [online], Israel business news - www.globes.co.il - on August 27, 2006
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