For some time, Micron Technology Inc. has grabbed its share of headlines. Not long ago, Micron (Boise, Idaho) was a mere DRAM play. Over time, the company has expanded into CMOS image sensors, specialty memories, and most recently, it formed a NAND flash venture with Intel Corp. As part of its diversification strategy, Micron also jumped into the end-user market by buying Lexar Media Inc.
What will Micron Technology do next? To get a handle on the company, EE Times caught up with Steve Appleton, its president, CEO and chairman. Besides the business front, Appleton is a risk taker in more ways than one. He is an avid pilot and owner of several stunt planes. In November, he won a road race in the 39th Tecate SCORE Baja 1000.
In an interview in scenic Sun Valley, Idaho, Appleton addressed a multitude of topics, including the state of the industry, the foundry/fab-lite models, private-equity buyouts and if Micron is a candidate for an LBO. He also talks about the company's diversification strategy, universal memory and if he wants to buy the NOR businesses of Intel and STMicroelectronics Inc.
Also look for an analysis on Micron in the print version of EE Times on Feb. 26.
EE Times: Micron has been brutally honest about the state of the DRAM and NAND markets. Can you elaborate?
Appleton: We tend to be pretty straightforward on how we see the market. The market is weak now. Despite the fact that [DRAM] might be down 10-to-15 percent [in ASPs], that's not catastrophic for us. Our DRAM business is doing pretty good, but it is weakening. We have some weakening in DRAM ASP. And NAND is just under incredible pressure. In 60 days, [ASPs are] down 50 percent or whatever that number is. It's probably down 80-to-90 percent over the course of last 8 to 12 months.
That's a pretty big drop, in particular, when we're in the front end of a ramp in terms of getting a better cost structure. That's where you really have a double impact. We're not only experiencing the normal price declines in the market, but also we're experiencing an inefficient cost structure as we bring the products and capacity online.
EE Times: This is a seasonal slowdown, right?
Appleton: No question there is a seasonality factor. Moving into the Christmas season, we were talking about MP3 players, digital still cameras, etc. Now, we're past the Christmas season and we're not as strong. As a result, the market is affected by it. It's not that surprising.
EE Times: Some say there are no ''killer apps'' to drive chip growth. Do you see any on the horizon? Is Vista a ''killer app''?
Appleton: Vista will be helpful. But even when MP3 was starting to consume NAND, nobody called it a 'killer app' until after it happened. I have not heard anybody predict a 'killer app' with any accuracy in the last 10 years. I think we're in a period of time where the applications haven't caught up with the price elasticity of the product.
EE Times: Analysts believe that the IC market will grow 5-to-10 percent in 2007. Does that sound about right?
Appleton: I think that's what we would say. We think overall '07 is going to be a decent year. We don't see it as explosive, but we don't see it as catastrophic not at least across all of our lines combined. When you look at the demand profile, the economy is doing pretty well. We still have consumption. We've got to get some of the inventory corrected.
EE Times: What's the geographical breakdown of Micron's sales these days?
Appleton: If you break it down, about 20 percent [of our business is] in Europe and 40 percent in Asia. When you think about the growth areas, we are first focused on the Far East and that's where the action is. The U.S. market is not dead; it's still healthy.
EE Times: What's the fastest-growing market?