MoSys: Memory technology with an edge

MoSys develops embedded memory solutions used by the semiconductor industry, electronic product manufacturers, and foundries to develop complex integrated circuits. The company does not manufacture chips but operates a semiconductor intellectual property business model in which it licenses out its technology to chipmakers on a non-exclusive and worldwide basis. Without the need to maintain the high capital costs of manufacturing, MoSys operates a high margin business with gross margins generally in the 85% to 90% range or higher.

The company’s patented semiconductor memory technology, called 1T-SRAM, is designed for high-volume, low-power consumer applications. The end result is high performance at a reasonable cost. Its memory is embedded into advanced integrated circuits including the increasingly popular system-on-chip (SoC). MoSys’s 1T-SRAM places a large amount of local memory on the SoC chip, thereby reducing the need for two separate chips and reducing the overall cost.

The demand for SoCs is rising as the demand for smaller semiconductor building blocks, or transistors found in advanced consumer applications increases. The underlying concept behind SoCs is the integration of multiple elements such as microprocessors, graphics, memory, analog components and digital signal processors into a single integrated circuit, which in turn enables higher performance and less power consumption.

1T-SRAM technologies deliver key advantages versus traditional SRAM in the areas of density, power consumption and cost. Some developers have tried DRAM because of its greater density over traditional SRAM, but the slower speed of DRAM has proved a detriment. 1T-SRAM appears to be gaining in the marketplace. MoSys’s 1T-SRAM memories provide 3 or more times the density associated with comparative SRAM. The higher density translates into lower cost for the chipmaker. The lower power requirement of 1T-SRAM also results in longer battery life and lower costs.

Prior to 2004, MoSys manufactured memory chips based on its 1T-SRAM technology, but a strategic shift was made thereafter to stop making chips and instead license the technology. Revenues are currently derived from two major sources: royalties of 2% to 5% of the selling price (64% of fourth quarter 2006 revenues) and licensing fees of 10% to 15% of the licensing price (36% of revenues).

The growth potential for embedded memory technologies as an integral part of SoCs is evident. Advanced consumer applications employing SoCs include cell phones, game consoles, portable multimedia players, cameras, camcorders, digital TV, and networking products to name a few. As the technological complexities of consumer products rise, the demand for more complex SoCs will also rise. To date, MoSys’s memory solution has been embedded in over 110 million units shipped.

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