Micron’s Great Expectations for Memory

Micron Technology (MU), the only US-based DRAM (dynamic random access memory) maker, has had a tough time in fiscal 2016 following the slowdown in demand for PCs (personal computers) and smartphones. This trend has also hit mobile chip maker Qualcomm (QCOM), PC processor maker Intel (INTC), and mobile handset maker Samsung (SSNLF), with all companies reporting declining earnings.

At its Winter Analyst Conference in February 2016, Micron stated that fiscal 2016 is a year of enablement and for preparation for future growth. In this series, we’ll look at the company’s forecasts for the memory industry, its growth strategies, and its position in memory technology.

Micron’s Chief Executive Officer, Mark Durcan, stated that certain growth opportunities should help the memory market outperform the semiconductor industry—even in times of “potentially muted growth.”

At the conference, Micron’s Vice President of Memory Technology and Solutions, Brian Shirley, explained that there is a huge opportunity for memory and storage products in the future. He stated that immense amount of data would be generated through the IoT (internet-of-things) devices. such as mobile, automotive, and embedded computing. This data would be collected and stored in the cloud or enterprise servers through a network infrastructure.

Each of the above segments requires a different type of memory, depending on how the data needs to be treated. Brian Shirley categorized the data as “hot data” and “cold data”. Hot data is the one that needs immediate action while consuming less power. Cold data is the one where no immediate action is required but it should be placed near the processing system. This treatment of data needs specific systems.

Brian Shirley stated that Micron is well-placed to tap this opportunity with its three key pillars:

• a cost-competitive DRAM portfolio
• high-performance 3D NAND and emerging memory technology (3D XPoint)
• other memory technologies currently under development

Moreover, the company has been focused on packaging this technology in the form that makes the data most usable for customers. Depending on the way data needs to be treated, the company creates a dynamic sub-system using eMCPs (embedded multi-chip package), non-volatile DIMM (dual in-line memory module), HMC (hybrid memory cube), SSDs (solid-state drives), the firmware, the controllers, and the software. (We’ll look into this in detail later in this series.)

Notably, the Technology Select Sector SPDR Fund (XLK) has ~10% exposure to semiconductor stocks, including 0.32% in MU, ~3.1% in INTC, and ~1.9% in QCOM.

Now let’s take a look at Micron’s forecast for DRAM demand.