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To: Return to Sender who wrote (84838)

4/1/2020 8:58:13 AM

From: Sam

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Micron CEO's Plan to Stay Ahead of Coronavirus Started Coming Together in January

Dow Jones Newswires April 01, 2020 08:00:00 AM ET

March probably felt like the longest month ever for many chief executives. In a matter of weeks, the new coronavirus went from a major disruption in Asia to a full-blown global pandemic that shoved business-as-usual out the window.

Sanjay Mehrotra, chief executive of Micron Technology Inc., has been weathering the storm for the past three months. The chip maker has testing and assembly operations in China, so the 61-year-old executive has been addressing Covid-19's toll since January.

He retooled procedures to keep production lines running. As a result, Micron products have remained in supply as America increasingly works from home--a migration that heightens demand for the memory chips fueling the necessary tech infrastructure.

"We're doing our part in terms of being ahead on the curve," Mr. Mehrotra said in an interview.

Micron started handing out protective gear to employees across its many sites throughout Asia on Jan. 23. It started to take employees' temperatures in the region the same day.

Realizing in early February that some disruption would be unavoidable, Mr. Mehrotra deployed a "red team, blue team" approach to working at its Asian factories. Micron sent two sets of teams with overlapping skills to separate parts of facilities. If individuals on one team fell sick, the other team stepped in, minimizing stoppages and containing the spread of infection.

To avoid cross-contamination, red and blue teams were assigned different entrances, cafeteria shifts and buses to go to and from factories. Many people were moved onto work-from-home rotations to reduce the number of people in factories at any given time.

Micron also set up backup remote-operating centers at all its factories. That way, even if people working the machines got sick, chip-making operations could keep running using automation.

Mr. Mehrotra assigned Manish Bhatia, the executive vice president for global operations in Singapore, to oversee the system.

Also in late January, Mr. Mehrotra investigated the supply chain for potential choke points. Micron started to stock up on silicon wafers--the thin substructure on which chips are built--and industrial chemicals at its chip-making factories, allowing production to continue even if raw materials became harder to ship.

New suppliers were tapped to further mitigate disruptions.

The CEO's strategy was tested on March 18, after the Malaysian government restricted movement and shut nonessential businesses. This affected Micron's facilities that test and assemble chips.

The company joined other electronics producers and lobbied Malaysian officials to be classified as essential, arguing that memory and data storage products allow millions of people to work from home. Micron pointed to its red- team, blue-team approach as a way to manufacture chips safely. The government agreed and allowed Micron and others to restart operations on a limited basis.

Similar efforts by the U.S. semiconductor industry to convince state and federal governments that chip production is essential are now under way.

"Managing the mix of this has been certainly challenging for our team," Mr. Mehrotra said. "Things have been brought upon us, even with the proactive work, rather suddenly."

The U.S. semiconductor industry has yet to face large disruptions. Still, Mr. Mehrotra has rolled out the safety precautions he created for Micron's Asian facilities at chip-making factories and other key facilities in Idaho, Virginia and Utah.

The mix of products has also changed to reflect changing demand. It has shifted production from memory for smartphones, where sales are falling, to products for big data centers that support cloud-computing services needed for remote work.

Last week, following a favorable earnings report, Mr. Mehrotra said Micron would spend $35 million on initiatives that fight coronavirus or blunt the financial pain the pandemic inflicts on people. This plan includes $1,000 checks to U.S. employees making less than $100,000 annually.

Mr. Mehrotra, of course, is by now a videoconferencing veteran. Virtual happy hours are commonplace, and company leaders conduct weekly calls with thousands of employees at a time. Nobody's dressing formally these days. Mr. Mehrotra only puts on a button-up shirt if he's going on television.

"I wear normal shirts, and I may be wearing shorts underneath," he said.

Write to Asa Fitch at asa.fitch@wsj.com

To: Return to Sender who wrote (84838)	4/1/2020 9:19:51 AM
From: FJB	1 Recommendation Recommended By Return to Sender Respond to of 95378

ASML cuts guidance but sees no drop in demand for lithography systems SPIE Europe Ltd optics.org /news/11/1/138 31 Mar 2020 *Semiconductor equipment giant is working through Chinese shipment delays and supply chain disruption.* ASML has substantially reduced its sales expectations for the first quarter of this year, but says that any shortfall will be recouped in the coming months, with no sign yet of reduced demand resulting from the global coronavirus crisis. The Dutch semiconductor equipment firm, which has a de facto monopoly on the latest extreme ultraviolet (EUV) lithography systems needed to make state-of-the-art logic and memory chips, said in January that sales in the quarter ending March 31 would be between €3.1 billion and €3.3 billion. But just ahead of the quarter ending, CEO Peter Wennink announced that the figure would instead be in the region of €2.4-2.5 billion, a drop equivalent to around three-quarters of a billion euros. Supply chain issues ‘solved’ While that sounds serious, Wennink stressed that the combination of issues that has prompted the change to financial guidance was already partly resolved, and that revenues not recognized in the first quarter would simply shift to later in the year. “Until now the Covid-19 outbreak has had limited impact on ASML’s manufacturing capability,” said the CEO. “Also, from a customer point of view, we have not seen a reduction in the demand for our systems this year.” Three key effects are behind the Q1 shortfall, he explained. The first of those relates to delayed shipments of more conventional deep-UV (DUV) lithography equipment to Wuhan, the initial epicenter of the novel coronavirus outbreak, and where shipment and travel restrictions have already been in place for months. “Second, we have experienced some issues in our supply chain, which for now have been solved,” added Wennink. “Combined with longer than initially planned cycle times for the first NXE:3400C [EUV] models in final configuration, this has resulted in some delays in shipments.” Expedited shipments The third effect to impact sales relates to decisions made by customers worried about whether the ability to ship systems in the current circumstances might change. Some of ASML’s customers have requested expedited delivery of those EUV systems before normal factory acceptance tests are completed. However, this means that final acceptance of the equipment - and therefore revenue recognition - can only take place after the EUV kit is successfully installed at the customer’s fabrication facility. Each of the EUV systems relies heavily on high-power lasers and state-of-the-art optical components to generate and control the EUV light source. “Despite the challenging circumstances, we have been able to continue ASML’s operations although we, like many of our peers and customers, are dependent on future developments with respect to measures taken to control the Covid-19 outbreak around the world,” added the CEO. Last week Bloomberg reported that operations were continuing largely unaffected at ASML’s huge site in Veldhoven, partly because the ultra-clean environment at much of the facility provided such effective protection from any pathogenic contaminants, including viruses. And because ASML is the only equipment firm to have developed production-level EUV systems, chip manufacturers have nowhere else to turn as they equip their latest fabs to scale production of new devices that rely on EUV patterning. Samsung ramps EUV-based DRAM One example is Samsung, which said last week that customer evaluation of its latest memory (DRAM) chips was complete, with a production ramp now pencilled in for next year. “The new EUV-based DRAM modules have completed global customer evaluations, and will open the door to more cutting-edge EUV process nodes for use in premium PC, mobile, enterprise server and datacenter applications,” announced the Korean technology giant, the first chip maker to adopt EUV for DRAM. Until now, EUV has been largely restricted to production of logic chips. “EUV will be fully deployed in Samsung’s future generations of DRAM, starting with its fourth-generation 10 nm-class (D1a) or the highly-advanced 14nm-class, DRAM,” added Samsung. Meanwhile ASML’s Wennink emphasized that the company’s priority was to ensure the safety of its workforce and their families. “Our second goal is to ensure the continuity of our business and our customers’, suppliers’ and partners’ businesses, so that we can all continue to serve our end markets,” the CEO added. ASML’s executive team is set to provide a further update later this month, when the company’s Q1 2020 earnings report is filed. • While ASML’s stock price has been hit like most others since the coronavirus outbreak became a global pandemic, it has already recovered strongly. Trading at around $264 on March 31, it is down from the all-time high of nearly $320 reached just last month, but well up on the low point of $183 touch in mid-March.