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The Ge/Si hetero-nanocrystal as a floating gate has been discussed and improved. The charge stored in the quantum well formed by SiO2-Ge-Si has to be thermally activated to the valence band of the Si nanocrystal before it can leak to the substrate which significantly reduces the leakage current from the charge storage node (nanocrystal) to the substrate. The simulation shows that the flash memory with Ge-Si (3 nm/3 nm) hetero-nanocrystal floating gates possesses a retention time of about ten years with a tunneling oxide of only 2 nm. Both writing and erasing speeds are fast in the Ge-Si hetero-nanocrystal memories, which is similar to that in the memory based on Si nanocrystals only.