Boise Mayor Dave Bieter, Sen. Jim Risch and Gov. C.L. “Butch” Otter preparing to give speeches at Micron’s 40th anniversary in Boise. Photo by Sharon Fisher.
“Boise is our headquarters,” Micron CEO Sanjay Mehrotra said on Thursday. “It is the center of our research and development,” which in turn is the foundation of the company’s global presence.
Mehrotra was in Boise to take part in the company’s 40th anniversary, which it celebrated in Idaho by taking over Cecil Andrus Park, in front of the Statehouse, and busing in employees from the company’s facility in southeast Boise. The event – which was replicated at the company’s other worldwide locations – included food, music, performances and speeches from local leaders, including Gov. C. L. “Butch” Otter, Sen. Jim Risch and Boise Mayor Dave Bieter. Both Bieter and Otter made proclamations – Bieter for Boise and Otter, as he emphasized, for the whole state.
Otter, wearing a cast due to a broken ankle, reminisced about the day he drove his then father-in-law, J.R. Simplot, and two brothers-in-law to a nondescript dentist’s office near Fairview and Cole, wondering, “What in the hell is he doing now?” In the basement of that dentist’s office were Ward and Joe Parkinson, the two founders of Micron, which Simplot funded.
Micron CEO Sanjay Mehrotra led attendees, including politicians and past Micron executives in a “Go Micron” cheer. Photo by Sharon Fisher.
The two Parkinson brothers, as well as members of former CEO Steve Appleton’s family and former CEO Mark Durcan, were also in attendance at the event.
Mehrotra, who had co-founded the storage company SanDisk and left after it was sold to Western Digital in 2016, said his emphasis at Micron was improving the company’s speed of execution and improving the translation of its technology into benefits for its stakeholders and stockholders.
Mehtotra also presented four Boise charities with $10,000 each – the Idaho Food Bank’s backpack program, Charitable Assistance to Community’s Homeless (CATCH), the Discovery Center and the Foothills restoration project – representing food, shelter, education and the environment, he said.
Micron also announced today that it was spending $1.5 billion to buy out Intel’s share of the IM Flash Technologies joint venture for 3D XPoint technology, which is manufactured in Lehi, Utah. The two companies have created and ended a number of partnerships over the years.
“It has a tremendous manufacturing capability,” Mehrotra said. There is a growing need for memory and storage for artificial intelligence, he said. “It is at the heart of the intelligence evolution.”
Micron Technology, the grande dame of Idaho’s technology industry, is celebrating the 40th anniversary of its founding this week, and, by all accounts, appears to be ready to stay in Idaho for at least another 40 years.
The Boise-based company is known for designing and producing chips that go into computers, solid state disk drives, cell phones, and now even automobiles. It is best known now for making dynamic random access memory (DRAM) chips, a more profitable product typically used in computers, rather than competing in the commodity market for memory chips. It is the world’s fourth-largest semiconductor company, holding 40,000 patents and employing 34,000 people across 17 countries.
“Micron is the last remaining U.S.-based DRAM maker,” said Jim Handy, general director of Objective Analysis, in Los Gatos, California. “In the middle 1970s, when DRAM was new, all DRAM makers were U.S.-based.”
At one point, the world had 28 DRAM makers. Now there are just three: Micron, Samsung and Hynix.
Handy attributed part of Micron’s success to the fact that it kept acquiring companies as they exited the DRAM business.
“Someday there will only be one integrated DRAM manufacturer, and it’s hard to predict which of the last three it will be, but Micron certainly could be the one,” he said.
Karen Metz
That said, the company has also branched out into other areas, such as making PCs itself – an effort it shut down a few years later.
“We didn’t want to be reliant on DRAM,” said Karen Metz, vice president of business planning and process management, who has worked in Micron’s Boise office for 26 years.
The company has since decided to stick to its knitting and move from diversification to adjacent and aligned technologies. “We needed to stay more at our core,” Metz said.
Technology Tentpole
Rick Ritter
Locally, Micron was one of the primary cornerstones in the development of the Treasure Valley’s technology industry, said Rick Ritter, lab director for Meridian incubator New Ventures Lab and former president and CEO of Idaho TechConnect.
“Up until a few years ago, the research around economic development and ‘technology ecosystems’ was that hubs like Silicon Valley, Boston and Route 128 were only possible when you had a great university/universities in the region,” he said. “Research has now shown that an aggregation/cluster of larger tech companies can have the same effect as a university.”
Bill Connors
“Micron has put us on the ‘tech city map,’” said Bill Connors, president of the Boise Metro Chamber of Commerce. “In so many ways, Micron has created the innovative culture and attitude that Boise is now known by. Our state’s prosperity has been directly related to Micron’s prosperity. The sheer number of employees, many of whom are highly skilled engineers and innovators, have brought a special diverse workforce and talent pool to our region. It has become a global leader in an industry that touches most of humanity, and it all emanates from little Boise, Idaho.”
In particular, that has helped Idaho go beyond its original role in the extractive and agriculture industries, Connors said.
“In a state whose legacy industries in agriculture, mining, food processing and forest products are known around the world, Micron has madetechnology our newest global legacy industry, and that economic diversity has brought every Idahoan a greater opportunity and a better life,” he said.
The company has been influential not just in and of itself, but for the technology startups it and its former employees have spawned, Ritter said.
“We are now in generation four or five of that evolution,” he said, recalling a 2008 map, TechBoise Universe, that showed all the companies that Micron alumni had generated at that point. “If you connect the dots — new buildings for research, more research talent, joint ventures with other companies — it is pretty clear that Micron maintains its current leadership role in contributions to the tech ecosystem. That means an increased need for brains from a variety of scientific and technical fields.”
According to a December 2017 report from the Boise State University College of Business and Economics, Micron employs 6,300 workers in the state with an annual payroll of more than $777 million. In addition, Micron generates significant
business for the suppliers of goods and services needed to support its operations, creating more than 9,000 additional jobs with an annual increase of another nearly $400 million in labor income. In Boise, that amounts to almost 5 percent of the local jobs, with an impact on income of nearly $1.17 billion annually.
Micron’s Future
Boise is now primarily a research and development facility as opposed to a production facility, Metz said.
“Our primary focus is high-tech process and product development,” as well as serving as the corporate office, she said. “All along, we’ve had R&D here. Instead of having it dispersed, we’ve continued to invest. It wasn’t a decision to put it here, but to continue to grow it here.”
That mirrors the technology industry in the U.S. and Silicon Valley as a whole, Handy said.
“There are very few fabs in Silicon Valley anymore, and the ones that remain are tiny,” he said. “The result of this has been a diversification of the Valley’s businesses to a broader range of industries, all of which require enormous talent: biotech, software, internet services. Idaho is likely to follow this path as well.”
In particular, Micron is looking at providing the storage and memory for the burgeoning artificial intelligence industry, Metz said.
“All those photos people are taking on their cameras and video all need to be stored somewhere,” she said. “Micron is sitting at the heart of that storage. The amount of data is overwhelming, and it’s a huge opportunity for us to evolve this business.”
During the company’s most recent investor day in San Francisco, it was flanked by Microsoft and Amazon, two companies that are working to leverage all that date, Metz noted. In addition, Micron announced a $1 million foundation fund for artificial intelligence startups.
Corporate Philanthropy
The company is known for its philanthropy, with buildings all over Boise stamped with Micron’s name.
“It has been an incredible corporate citizen and helped make Boise the cool, hip, entrepreneurial, artsy, prosperous community that we are through its generous foundation and corporate giving,” Connors said. “I challenge you to find an important institution in Boise that Micron has not been an important supporter of. From Boise State University to the Boise Chamber, the Micron name and logo are a symbol of community support for education, entrepreneurship, the arts, research, sports, community events and everything that makes Boise, Boise.”
In particular, Micron has contributed millions of dollars for buildings and programs at Boise State University. Others include science, technology, engineering, and math (STEM) education through the Micron Foundation, libraries, the College of Western Idaho and the Trailhead startup community. The total amount is on the order of $88 million, according to the company.
Cyclical Industry
That’s not to say the company hasn’t weathered a few bumps. In a cyclical, commodity industry, its fortunes have tended to go up and down with the market, such as a string of quarterly losses during and after the 2007 recession. It has also had its share of layoffs as the industry has gone up and down, as well as intellectual property lawsuits in the highly competitive chip industry.
Steve Appleton
Micron’s biggest blow was likely on Feb. 3, 2012, when its CEO, Steve Appleton, died in a plane crash at age 51. Then-president Mark Durcan, who had announced his retirement just the week before, came back and served as CEO until his retirement in 2017, when he was replaced by Sanjay Mehrotra, formerly founder at SanDisk.
Mehrotra’s hiring was a shot in the arm for the company and for Idaho’s tech community in general, Ritter said.
Sanjay Mehrotra
“The new CEO is bringing a lot of folks from his old company as well as others, all of them research or innovator types. That means new products and services,” he said. “The last patent report I looked at showed Micron creeping up on Idaho National Laboratory in terms of patent applications and patents granted. I would expect that to continue, and I would expect that the people associated with some of those patents will leave Micron and add to the next generation of Micron-related companies.”
“Sanjay is the first Micron CEO who was not groomed by the organization,” Handy said. “It will be interesting to see what he does with the firm.”
Micron will celebrate 40 years with an event at the state capitol today from 1 p.m to 6 p.m.
Highlights include:
1:30 p.m. – Welcome from Micron’s Scott DeBoer
4 p.m. – Comments from Gov. Butch Otter, Mayor Dave Bieter and Micron CEO Sanjay Mehrotra
Groundbreaking on June 14, 1980. Photo courtesy of Micron.1978 founders: Dennis Wilson, Joe Parkinson, Bob Pratt and Ward Parkinson, from left. Photo courtesy of Micron.1982: The first Micron building. Photo courtesy of Micron.
The Boise campus, where the company got its start, is its research and technology headquarters, as well as its corporate base. File photo.
Micron said it has received a preliminary injunction regarding computer chips it sells in China, but said it should not affect its earnings much. The preliminary injunction enjoins the company’s Chinese subsidiaries from manufacturing, selling, or importing certain Crucial and Ballistix-branded DRAM modules and solid state drives in China.
The Boise company said a preliminary injunction against two of its Chinese subsidiaries had been granted by the Fuzhou Intermediate People’s Court, Fujian Province, China. The injunction is related to patent infringement cases filed by United Microelectronics Corporation (UMC) and Fujian Jinhua Integrated Circuit Co. (Jinhua). The patent infringement claims of UMC and Jinhua had in turn been filed against Micron in retaliation for criminal indictments filed by Taiwanese authorities against UMC and three of its employees, as well as a civil lawsuit filed by Micron against UMC and Jinhua in the United States District Court for the Northern District of California for the misappropriation of Micron trade secrets, Micron said in a statement.
Micron is a global microchip and nanotechnology research and manufacturing company with about 30,000 employees on several continents. It’s one of just three major companies in the world that make the dynamic random access memory (DRAM) chips called for in the injunction. DRAM chips are typically used in computers, rather than the more commodity-based market for memory chips. The other two companies are Samsung and SK Hynix, both in South Korea.
But due to the worldwide DRAM shortage, the injunction isn’t likely to affect Micron much, according to Jim Handy, general director of Objective Analysis, in Los Gatos, California.
“Any lack of Micron DRAM in China is likely to be serviced by Samsung and SK hynix, but since there’s a shortage, these companies will need to reduce their shipments outside of China to satisfy the new demand within that country,” he wrote in a blog post. “The customers who will suddenly be getting less DRAM from SK hynix and Samsung will undoubtedly come to Micron for help. In the end this should all balance out.” Companies that typically manufacture products using these chips will probably have to pay higher prices for them, he said.
Such actions are uncommon, Handy said, noting that the most recent similar action he could remember was from 2006. “It’s infrequent, and is most often used for antidumping rather than patent infringement,” he said.
Micron said the affected products make up slightly more than 1 percent of its annualized revenues. Consequently, the company said it anticipates that the negative impact to revenue this quarter relating to the injunction will be approximately 1 percent, and the company expects revenue to be within the previously guided range of $8 to $8.4 billion.
Micron is constructing a new building for its employees. Image courtesy of CTA Architects.
To no one’s surprise, Micron Technology issued barnburning results on June 20.
Total revenue was $7.8 billion, up 6 percent from the previous quarter and 40 percent from the prior year. Non-GAAP gross margins expanded to a record 61 percent, up from 48 percent the prior year. Operating income grew to $4 billion on a non-GAAP basis, representing 52 percent of revenue, compared with 49 percent the previous quarter and 37 percent a year ago. Non-GAAP operating expenses came in at $733 million, up approximately 10 percent from the previous quarter.
Micron, a global microchip and nanotechnology research and manufacturing company, has about 30,000 employees on several continents. The Boise campus, where the company got its start, is its research and technology headquarters, as well as its corporate base. The company has grown recently in Boise, and is constructing a 157,000-square foot building intended to accommodate up to 1,200 employees.
“Micron’s flying high these days,” said Jim Handy, a veteran Micron analyst and general director of Objective Analysis, in Los Gatos, California. “Although I am predicting a downturn later this year, today’s market is really doing the company a lot of favors, what with the stock buyback.”
Although Micron is international, the results are good news for Idaho, particularly Boise.
“The cool thing about Idaho is that Micron has named Boise the company’s ‘Center of Excellence’ for R&D,” Handy said. “That’s happening even though Micron has a growing presence in Silicon Valley. Clearly, the folks in Boise are pretty hot stuff.”
However, that designation has one disadvantage. “The downside is that Boise is becoming less of Micron’s manufacturing,” Handy said. “I hope that doesn’t bode poorly for the rank and file.”
Micron has built a number of buildings over the years to expand its fabrication capacity, most recently last year, but its latest construction efforts are aimed at its people. The company is working on a new office building, as well as new employee gyms and cafeterias.
Altogether, the cost of the new construction and remodeling amounts to “tens of millions” of dollars, said Robert Manetta, a Micron spokesman.
A new 157,000-square foot building that is intended to accommodate up to 1,200 employees will include a fitness center. The company will remodel its existing fitness and health center, including repainting and installing biomicrobial flooring, Manetta said. On the fitness center side specifically, the company is remodeling and modernizing the fitness center and locker rooms, including transforming the former aerobic room into a Cross Training workout area.
Scott DeBoer
Micron is a global microchip and nanotechnology research and manufacturing company with about 30,000 employees on many different continents. The Boise campus, where the company got its start, is its research and technology headquarters, as well as its corporate base. The company has grown recently in Boise, and despite the recent addition of new buildings about 300 employees are working in temporary trailers. Others are in leased space, said Scott DeBoer, executive vice president.
“One of the motivations is attracting top talent,” Manetta said. “Attracting and retaining great employees means doing more than paying them well. Health and wellness are things that many employers are focused on and many employees now expect some sort of focus in these areas.” The gym and cafeteria revamp in Boise is part of a company-wide global effort, DeBoer said.
On the health center side, Micron is updating the patient treatment spaces, staff laboratory, and medical storage work areas, as well as remodeling the lobby to make it more inviting. Manetta said. In addition, the company is changing how it is providing health care, with occupational health services now provided by WorkCare, and with medical services provided by Crossover Health, he added.
Micron’s new cafeteria is intended to improve traffic flow. Image courtesy of SkB Architects.
Micron is also renovating the cafeterias in two Boise buildings, primarily to accommodate more employees more efficiently. In building 17C, the cafeteria is being refreshed and modernized to improve traffic flow, while in building 36, the cafeteria is being expanded from 600 capacity to 1,000. In addition, the company is adding audiovisual equipment to allow for large meetings in this area, Manetta said.
Renovations also include exterior patios and partitioned spaces with standalone audiovisual systems, Manetta said. The company is also considering streamlining the service further by looking at systems such as ordering in advance for pickup, he added. The cafeteria remodel in building 36 is slated to be completed in February.
The construction reflects nationwide trends, said Jay Larsen, president and CEO of the Idaho Technology Council.
Jay Larsen
“The multi-million-dollar investment shows how committed Micron is to its most valuable asset—its employees,” Larsen said, adding that perks such as cafeterias and gyms have become common in the past five years, particularly in the technology industry as it fights to retain employees due to competition. In that arena, Micron is competing not just with other Boise companies, but companies in such technology centers as Silicon Valley, Seattle, and Portland.
According to Solving for the Future of Agility: Americas Occupier Survey Report 2018, by the CBRE Institute, a full-service cafeteria was the most important amenity that an employer could offer, with showers and fitness facilities coming in second and third. Curated fitness classes, on-site health care, and wellness services were also among the top 14 amenities.
Micron is constructing a new office building to house more employees. Image courtesy CTA Architects.
The new building with the fitness center and the remodel of the existing fitness center were both designed by CTA Architects and the building contractor is ESI Construction. Most of the construction is scheduled to be completed by the end of the year, Manetta said; in particular, the new building is specifically targeted for completion in December.
CTA also designed the expansion at building 36, where the contractor is ESI. CSHQA is the designer for building 17C, while the contractor is McAlvain.
Micron raised its quarterly earnings expectations and announced a stock buyback program of up to $10 billion. File photo.
Micron stock has been going up since the company made a three-pronged announcement on May 21 that it was raising its quarterly earnings expectations, making some deals with computer hardware vendor Intel, and initiating a $10 billion stock buyback program.
This is all good news for Idaho, where Micron, a global microchip and nanotechnology research and manufacturing company, is one of the state’s largest employers, with 30,000 employees on several continents. In particular, it’s good news for Boise, which Mayor Dave Bieter says “catches a cold whenever Micron sneezes,” and where up to 6,000 of those employees are located. The company has been expanding with a new research & development fabrication plant last fall and a new building for employees scheduled to open later this year.
Sanjay Mehrotra
Sanjay Mehrotra, Micron’s president and CEO, presented on May 21 to analysts and investors at the company’s event in New York. In addition to announcing the stock buyback program, the company raised its expectations for the current quarter, which ends May 31, to revenue in the range of $7.70 billion to $7.80 billion compared to prior guidance of $7.20 billion to $7.60 billion, and earnings in the range of $3.12 to $3.16 per share compared to prior guidance of $2.76 to $2.90 per share. In comparison, second-quarter revenues were $7.35 billion, which themselves were 58 percent better than the previous year, and earnings were $2.82 per share.
“They provided a lot of statistics that indicated that things were just as rosy and wonderful as they could possibly be,” said Jim Handy, a veteran Micron analyst and general director of Objective Analysis, in Los Gatos, California. “It was all very impressive.” The presentation started with the earnings announcement, and ended, around the time of market close, with the stock buyback news. “That always goes over really well with stockholders,” he said. “Two pieces of very positive news, and in-between is sandwiched all this stuff about how great the market is.”
On the other hand, Handy cautioned that chipmaking remains a cyclical industry because, generally, it’s a commodity market. For example, there was a market collapse in memory in 1995, he said. “Memory is not as large a part of the market as 1995, and maybe the next market collapse is not going to be the worst, but it will be remarkable nonetheless,” he said.
The Micron 5210 ION SSD will be able to store up to 33% more data than existing models. Photo courtesy of Micron.
In an attempt to make the company less subject to the cyclical nature of the chip industry, Micron also announced a deal with Intel to develop quad-level cell (QLC) solid state devices (SSD). They store four bits of data per cell, which in comparison with the current three bits per cell represents a 33 percent capacity improvement, the company said. The result will be more data in a smaller space, and is intended for use in data centers, media streaming, and other read-intensive operations. Micron has had a number of partnerships with the Santa Clara, California, hardware company over the years.
Micron’s plans for the future also mean changes for its role in Idaho, Handy said. The company is setting up “centers for excellence” at its various geographic locations, and the one for Boise is research & development, while a number of the offshore ones are for manufacturing its various components. “None of the production ‘centers for excellence’ is in Idaho,” he said. “For the rank and file, that’s not a positive thing because it means not so many jobs,” because R&D fabrication doesn’t require very many employees.
That said, having R&D centered in Idaho has benefits, Handy added. “The real brain thing – the thing that makes Silicon Valley go – is getting firmly established in Idaho,” he said. The result is that the average salary for Boise employees is likely to go up. “But for the people who used to work in semiconductor manufacturing jobs, I’m suspecting they have to find some other work or move elsewhere.”
Micron contributed substantially to the construction of the Boise State University College of Business and Economics building. File photo.
Boise Mayor Dave Bieter has famously said, “When Micron sneezes, Boise catches a cold.” When Micron Technology Inc. is healthy, Boise and Idaho are healthy too. That’s why the company’s earnings report on March 22 was good news for the city and state.
After issuing improved guidance in February, Micron, Boise’s memory component manufacturer, proceeded to beat even that, with second-quarter revenues of $7.35 billion, up 58 percent year over year, GAAP net income of $3.31 billion, or $2.67 per diluted share, non-GAAP net income of $3.5 billion, or $2.82 per diluted share, and operating cash flow of $4.35 billion, compared with $1.77 billion year over year. (While Micron stock dropped 3.5 percent that day, the stock market as a whole also fell more than 724 points, or almost 3 percent.)
Nic Miller
It’s hard to calculate the economic impact of the global company, which has more than 20,000 patents and $1 billion in property, to its hometown, said Nic Miller, Boise’s economic development director. But there is no question it is large.
Jay Larsen, president and CEO of the Idaho Technology Council, estimated that the company employs between 5,000 and 6,000 people, but “they’re pretty tight-lipped on the number of employees they have,” Miller said.
“When you employ that many people, to say ‘they pay that much in taxes’ doesn’t measure their contribution to the community,” Miller said. For example, Micron’s employees buy homes and meals and contribute to paying for schools. Many leave to start companies of their own.
“When Micron has a good year, I imagine that if you talk to car dealerships and contractors, their business goes up as a result,” he said. “People have more money to spend, and they’re spending it in Boise.”
Then there’s the company’s investment in real property. It recently completed Building 51, a new research and development facility, at its campus in east Boise that is part of a planned $200 million expansion. “That’s a really strong sign that they believe in Boise and they believe in this area,” Miller said. Micron’s taxable value in Ada County is capped at $400 million because the company falls under the 63-4502 Capital Investment Exemption, said Brad Smith, chief deputy in the Ada County Assessor’s Office administrative department. Its assessment was just under $900 million for 2017, but that number is expected to pass $1 billion with its new construction, he said.
In addition, the company contributes to a wide variety of philanthropic causes, notably Boise State University, where Micron has contributed millions of dollars for buildings and programs. “The investment they’ve made in Boise State University over the past few years has been huge,” Miller said. “That’s just one place they’ve invested in the city.” Others include science, technology, engineering, and math (STEM) education through the Micron Foundation, libraries, the College of Western Idaho, and the Trailhead startup community.
Jay Larsen
Micron’s success also helps drive Idaho’s technology industry as a whole, Larsen said. “They had an extraordinary year and quarter,” he said. “Other competitors within the space were going to take some market share and customers, and that has proven not to be the case. It really helps Micron develop a stronger infrastructure within the Idaho technology landscape.”
The company helped the Idaho Technology Council itself come into being, Larsen said. “They recognized that we need a stronger voice from the technology industry sector to unify and create a culture of innovation in Idaho,” he said. “They wanted other voices and other interests to grow an innovative infrastructure,” particularly after the 1990s and the recession of the early 2000s. “A more robust ecosystem, as it relates to innovative technology-based companies, is a real win for everyone.”
Micron expects the good news to continue in the next quarter, issuing guidance of revenue from $7.2 billion to $7.6 billion, operating income of $3.6 billion to $3.8 billion, and earnings per share of $2.83 plus or minus $0.07.
A worker at Micron. The Boise-based global microchip manufacturer is going in and out of partnerships with other companies, but analysts say the company is strong. File photo.
Micron is going in and out of partnerships with other technology companies, but the consensus is that this isn’t a bad thing.
So far, the Boise-based company has mutually agreed to end one of its partnerships with chipmaker Intel, while starting up another partnership with three other companies using GDDR6, a faster type of synchronous graphics random-access memory that is used in graphics cards, game consoles, and other kinds of high-performance computing.
“This announcement will mean that designers outside the graphics market will be able to use GDDR6 in their designs for the first time,” said Andreas Schlapka, director of marketing, networking segment. “The combined solution will have two main benefits: One, make it easier for customers to use GDDR6 memory in their designs and two, it opens up new markets for our GDDR6 memory technology.”
Micron is also continuing its relationship with Intel to produce chips using 3D XPoint technology, developed by the companies in 2015 for nonvolatile memory, meaning memory that remembers its data even when the device is shut down.
Andreas Schlapka
“We continue to work with Intel on 3D XPoint memory, but will end our NAND collaboration with them after the next generation is completed,” Schlapka said. “Micron anticipates no impact to customers and partners as a result of this decision.” He wouldn’t say what other partnerships the company might be working on, citing competitive reasons.
Of course, any change to Micron – the state’s largest publicly traded company, and with more than 6,000 workers one of the state’s largest employers – is cause for concern.
“When Micron sneezes, Boise catches a cold,” Boise Mayor Dave Bieter said at a recent fundraising event for Trailhead, introducing Micron CEO Sanjay Mehrotra. But the change in partnerships could simply reflect the new CEO’s interest in looking over the business and restructuring it, said Jim Handy, general director of Objective Analysis, in Los Gatos, California. “Some things he’s going to look at and size them up,” he said.
In the particular case of the ended Micron-Intel partnership, which produced nonvolatile NAND flash memory like that used in solid state hard disk drives, the companies had actually been moving in that direction for a long time, Handy said. That partnership had started in 2004 and Intel had dropped out of a partnership involving a Singapore plant around 2010, though it maintained the relationship involving a plant in Lehi, Utah. Once Intel decided to retool a plant it already had in China to produce its own NAND chips, it didn’t need NAND chips from Lehi, so the companies retooled it to produce 3D XPoint chips instead. “Lehi was producing all of Intel’s flash memory,” he said. “Now it’s not producing any flash and Intel is producing the flash they need, so there’s no reason for Intel and Micron to have a flash agreement any longer.” But Intel and Micron maintain a tight agreement about their other technologies, including 3D XPoint, he added.
The agreement with the other three vendors means Micron can make more money on dynamic random access memory (DRAM) chips, typically used in computers, rather than competing in the commodity market, Handy said. “What’s important about this is that anybody who has the next generation of DRAM interface stands to be able to sell more profitable chips than the commodity chips that are made by everybody,” he said. “By providing a faster way to get the data out of the DRAM, Micron could have higher margins on their DRAM than their competitors could be able to have.”
Micron’s competitors in that market segment are primarily the Asian companies Samsung and Hynix, Handy said. “They’re the only three companies making DRAM in high volume.”
Dana Blankenhorn
“The market is so strong now that Intel’s move won’t have any short-term impact,” said Dana Blankenhorn, a writer who follows chipmaker stock. “If I had to choose between buying Intel or Micron stock, I’d buy Micron today,” due to recent security issues with Intel chips. “Intel is just in a world of hurt. Micron, by contrast, knows its business.”
We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. By clicking “Accept”, you consent to the use of ALL the cookies.
This website uses cookies to improve your experience while you navigate through the website. Out of these cookies, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may have an effect on your browsing experience.
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.
Sign In
Free Newsletter
