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To: Don Green who wrote (85854)	3/14/2003 3:17:12 PM
From: Don Green	Respond to of 93625

Micron reported poised to exit SRAM market By Betsy Van Hees 03/14/2003 9:15 AM EST URL: ebnews.com Betsy Van Hees is a senior analyst covering memory for iSuppli Corp. Micron Technology Inc. in February announced it would cut its global workforce by 10% and would drop certain, unnamed product lines. According to sources at Micron, the product families to be dropped are SRAMs and Ternary Content Addressable Memories (TCAMs). Micron has ceased all internal product development efforts and wafer starts for these product families, but will continue to support its existing customers using inventory and work in progress, the sources indicated. The company also has stopped development and wafer starts on its SynchFlash and embedded memory lines. With its withdrawal from SRAM, Micron will focus its efforts on DRAM, flash memory and specialty DRAMs like Reduced Latency DRAM (RLDRAM) and CellularRam. Although this was a difficult and painful decision for Micron, in the long haul it is the right move for the DRAM powerhouse, iSuppli Corp. believes. The venerable SRAM market has been shrinking over the past few years, missing out on the phenomenal growth experienced by DRAM and flash. During the peak year of the SRAM market, in 2000, SRAM revenue was $6.5 billion, only 7% higher than its previous peak of $6 billion in 1995. Unit growth in the SRAM market has stagnated. In 1995, SRAM unit shipments amounted to 1,095 billion. Five years later, during the peak year of 2000, unit shipments were 1,226 billion, representing only a 12 percent increase from 1995. SRAMs in 2000 accounted for only 12.7% of overall memory revenues. More than 20 companies now manufacture SRAMs. There are two types of SRAMs: asynchronous and synchronous. Asynchronous SRAMs primarily are used in mobile applications, such as mobile phones. Asynchronous SRAMs accounted for 61% of the $2.5 billion in SRAM revenue in 2002, according to iSuppli estimates. Micron is a supplier of synchronous SRAMs. The driving applications for synchronous SRAMs are the networking, telecommunications and data processing markets, with the major products being switches, routers and servers. iSuppli estimates that Micron controlled 4.9% of the synchronous SRAM market and 1.8% of the total SRAM market. With the networking and telecommunications segments not set to recover for quite some time, and the continual shrinkage of the overall SRAM market, one can easily see strong business reasons behind Micron's decision to exit SRAMs. As for TCAMs, Micron was a relative newcomer to the business. The company entered the market via its acquisition of MUSIC Semiconductors Inc. in March 2002. Micron entered a CAM market already occupied -- and dominated -- by two semiconductor players: Integrated Device Technology Inc. (IDT), which owned a 61% share of the market in 2002, and Cypress Semiconductor Corp., with a market share of 18%, according to iSuppli estimates. In contrast, Micron's share of the CAM market amounted to less than 1% in 2002. iSuppli estimates the CAM market in 2002 was slightly more than $67 million in size. However, Micron is a company that operates on a huge scale, with annual revenues of more than $25 billion. Micron's entire SRAM and TCAM product portfolios accounted for less than 1% of the company's total revenues in 2002. Micron's retrenchment will allow it to focus on its core product, DRAM, which will give it the internal engineering resources it needs to be the first to adopt 0.11-micron process technology. Micron does seem to be gaining ground in the all-important race for 0.11-micron DRAM product introductions, with the company having been the first to offer a 1Gbit Double Data Rate (DDR) SDRAM. Micron also was the first to offer JEDEC-compliant DDR-II samples.