Micron Sees Consolidation, Then Shifts
Rick Merritt
8/19/2013 01:50 PM EDT
SAN JOSE, Calif. — The electronics industry has pulled into a conservative phase of economic belt-tightening due to the forces of consolidation and slowing progress on Moore's law, said Micron's president in an interview with EE Times.
The good news is a new class of dense flash chips are coming next year. Farther out on the horizon, an emerging class of next-generation memory chips could open new doors, said Mark Adams.
EE Times: Cisco Systems announced layoffs last week that spooked Wall Street. Are we headed into bad weather?
Mark Adams, Micron: I'm not sure if it's bad weather. It may just be new era of people being cautious and keeping their teams lean. People have pretty good memories of the dark days of 2008. Whether it's through being tighter on headcount and balance sheets or preserving cash, people are being more conservative.
China is not where it was in the past decade. Even though it still has good growth, there are signs of weakening. Europe is less of a concern than it has been, but it's still not wildly growing -- and the same could be said of the US.
EE Times: In the memory sector we have seen reports of DRAM prices spiking up to 40 percent. What's happening?
Adams: I think the DRAM business has corrected itself. It was in a pretty bad place for a while before it started to turn in the spring. It's a supply side correction. There's been some consolidation, and our competitors are trying to be more cautious by not adding capacity irrationally.
With notebook and computer demand moderating, people are being cautious and looking at this from a profit and ROI instead of market share perspective. In addition, we are not seeing the heavy government intervention we had in the early part of the decade, so there's not a lot of fresh money around. So we have a conservative supply base investing for lower bit growth against a demand curve that's relatively stable.
There will be no new greenfield DRAM fabs for the foreseeable future. We are hitting something of a lithography wall in DRAM where shrinks are getting tougher and gains are not as attractive, so people are not as financially motivated to invest in new fabs. Also we see planar DRAM [advances] will end in the next three to five years, so you probably cannot get a return on investment in a new planar fab.
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