Prerequisites of execution excellence
Micron Technology (MU) is improving its overall manufacturing efficiency by executing its technology road map while maintaining the required scale, cost, quality, and speed.
At the 2018 Investor Day, Micron’s head of global operations, Manish Bhatia, explained the company’s operations cycle, from research and development to volume production to delivery. The company has been focusing on making this cycle efficient in order to execute new technology with high quality, low cost, and a reduced time to scale. This goal requires technology development and manufacturing teams to collaborate, and Micron has facilitated this through vertical integration, bringing its next processes under one roof.
Micron has set up a DRAM (dynamic random-access memory) center of excellence in Japan, where its technology team develops advanced nodes and collaborates with the manufacturing team on the initial ramp-up of a pilot product line. The two teams fine-tune the technology and make it ready for volume production. Once the yield starts to mature, the manufacturing team takes over and transfers the technologies to a DRAM plant in Taiwan, where they are scaled.
At its facility in Taiwan, Micron also performs assembly and test operations providing the benefits of vertical integration. The last stage of Micron’s DRAM execution is its semicaptive operation in China, where it performs large-scale DRAM assembly and ships the final DRAM modules.
For NAND, Micron developed vertically integrated facilities in Singapore and Malaysia, where everything from technology development to pilot production to volume production to component assembly and testing takes place. These sites also assemble and package managed NAND components and multichip packages. Micron even manufactures Flash solid-state drives in the same region.
Such integration has helped Micron to achieve NAND cost competitiveness. Even Intel (INTC) uses vertical integration to reduce its costs.
Micron sees more scope to reduce costs and improve speed. We’ll look into this next.