“I envisage a merger among the top five memory makers”

EDN Asia met Steven R. Appleton, Chairman of the Board and Chief Executive Officer, Micron Technology, recently in Singapore, and sought his perceptions on the memory industry. Excerpts:

EDN Asia: What are the trends in mainstream memories?
Appleton: NAND Flash consumption is good. But the supply is more than the demand. Prices dropped 50 percent in the Q1 07. Average cost of mainstream memories has been reducing 35 percent per annum, because of advanced process nodes and larger wafer size. For the last 25 years we’ve reduced cost by 35-45 percent per annum. Today there are only five DRAM companies who have developed their own technologies. The rest of the manufacturers get technology from these five companies. I envisage merger among the top five memory makers. The costs of fab and of gaining skills are so high that companies will find it difficult to do everything on their own. All memory makers will make both DRAM and NAND Flash.

EDN Asia: Do you envisage any competition between these two?
Appleton: NAND will compete with DRAM in computing system for caching. There should not be competition between them in the main areas of their applications, that is, DRAM for quickly producing data, and NAND for main storage. I envisage all memory companies making both NAND and DRAM.

EDN Asia: Which memory and image sensor technologies are currently on the anvil at Micron?
Appleton: While we already have 50nm products in the market, we are acquiring process capabilities at 35nm and 25nm. We are working on high density and high functionality memories. Small form factor and demand for lower power are key drivers of technology today.

EDN Asia: Micron seems to be slipping in DRAM market, with competitors performing better in 2006. Any comment?
Appleton: In new product introduction, we are still the no. 1. We are the first in the market for many products. Our market share in DRAM has decreased because we have transferred production facilities to NAND Flash and CMOS image sensors, and to special DRAM, where margins are higher than in conventional DRAMs. We shall continue to flex between NAND and DRAM, depending upon market conditions.

EDN Asia: What is Micron’s strategy to face competition?
Appleton: To innovate, and be the first to come out with new products in the market. We are also continuously improving our efficiency.

EDN Asia: How does Micron look upon Asia as a design center and market?
Appleton: Micron has design centers in Japan and China. We are looking at India as a potential design center. We had considered India two years ago but preferred China, because there wasn’t much semiconductor design work going on in India. We have done in Asia most advanced designs in DRAMS and image sensors, and are starting to do in NAND. As a market, Asia is the most important for us. Fifty percent of our revenue comes from Asia, as against 30 percent from the US, and 20 percent from Europe. China and Japan are our main markets. India is a smaller market, but a market to watch.

EDN Asia: Is Micron planning more investments in Asia?
Appleton: Most of our investment has been in Asia for the last few years, especially in China and Japan. Last year we announced our test and assembly facility expansion in Singapore, with $250 million investment, to meet our growing demand for semiconductors in Asia. This facility has 3,000 employees. Micron has recently announced a $2 billion joint venture interest in fab operations at TECH Semiconductors, Singapore. In March last we opened a new manufacturing facility in Xi’an, China. This is Micron’s first manufacturing facility in China, and is designed for assembly and test of Micron products. The facility, at an investment of $250 million, is expected to be fully operational by 2008 end.