TORONTO — Financial analysts attending yesterday's quarterly update from Micron Technology were congratulating the company on its strong numbers, but the real story might be that it's mastered 3D NAND.
“What's encouraging is where they are with their 3D NAND,” said Jim Handy, principal analyst with Objective Analysis. In a telephone interview with EE Times after Micron's Q1 2017 conference call, he noted that other vendors, particularly Samsung, have struggled with 3D NAND, whereas Micron appears to making good progress. “Micron's transition time is going to be longer than other technologies because they have to buy new equipment.”
That includes whole new factory in Singapore, noted Handy. “There's something that eluded everyone else that Micron seems to have got right.” He speculates that its decision to use a floating gate process might have been a factor, as other vendors went the charge trap route. “I wouldn't be at all surprised that Micron has shown everyone the need to go with floating gate instead of charge trap."
Micron CEO Mark Durcan said Micron exceeded the guidance provided in its fall update, which was when accelerated market conditions began, and prices have been strengthening across all segments for the company. This is trend is expected to continue into the next quarter.
As a result of current industry conditions, Durcan said Micron expects 2017 supply bit growth for DRAM to be in the 15%-20% range under the assumption that suppliers won't add significant wafer capacity. In the longer term, bit demand growth is forecast at approximately 20%-25%. On the NAND front, Micron anticipates 2017 supply bit growth in the high 30% to low 40% range; this takes in mind the impact of 3D NAND conversions, said Durcan. In the longer term, the company expects bit demand growth of approximately 40%-45%.
From a dollars and sense perspective, revenues for the first quarter of fiscal 2017 were $3.97 billion and were 23% higher compared to the fourth quarter of fiscal 2016 and 19% higher compared to the first quarter of fiscal 2016. Micron attributes the jump in revenues of 23% for the first quarter of fiscal 2017 compared to the fourth quarter of fiscal 2016 was due primarily to 18% and 26% increases in DRAM and trade NAND sales volumes, respectively, and a 5% increase in DRAM average selling prices.
Micron's prototype SSDs with 3D Xpoint memory chips on a PCIe Gen 3 interface handle writes at less than 20 microseconds and reads and less than 10 ms, ten times faster than existing NAND SSDs, but so far, there's no product actually shipping.
“In a nutshell life is good," said Handy of the overall picture Micron painted. “It is largely because of market conditions." He did note that NAND GB shipments jumped 26% quarter over quarter. “That's an annual growth rate of 152% if they were to keep it up. Given that they see market growth as 30-40% per year this is really high," he said. “It will work out to a big increase in market share for them for the quarter. This is probably attributable to their steep 3D NAND ramp."
Other highlights for Micron were its embedded business, where it serves the growing automotive demand for memory. Meanwhile, its Mobile Business Unit was up 54%, which Handy noted was high compared to other business units that were up 13-18%. “This is clearly much more than a shortage-driven phenomenon.
Micron continues to highlight its diversification and how that's healthy for its business. Handy said the company would prefer not be dependent on the cycles that come with being in the DRAM business, but added that the NAND business isn't any less prone to ups and downs. The long qualification cycles in the automotive sector works well for them, he added. “Micron is not saying the cycles will go away, but its corporate structure is able to make it less abusive."
While it would appear that Micron has a handle on its DRAM (including its conversion to 1X) and NAND, it didn't provide specifics on its 3D XPoint technology. Durcan said the company is talking to a number of different customers, but won't commit to what the end market is for the technology it developed with Intel, although storage, data center and mobile are all candidates. “Two or three years in, it will over time cannibalize part of the DRAM business."
Handy said Micron needs to have a shippable product, as well as a market for it. “Both of those need to happen. Intel can create a market for 3D XPoint, he said, but if the technology doesn't go anywhere it won't be all that detrimental to Micron. “It will be business as usual."
After this quarter ended, Micron closed its acquisition of Inotera Memories Inc., which the company said will improve its strategic and financial results going forward.
—Gary Hilson is a general contributing editor with a focus on memory and flash technologies for EE Times.