One-On-One -- Micron's next move: Graphics
Oct. 30, 1998 (Electronic Buyers News - CMP via COMTEX) -- Boise,
Idaho- Having set a course to vanquish the DRAM market, Micron
Technology Inc. is already mapping out its next conquest: the desktop
graphics arena.
With an integrated DRAM manufacturing strategy at the ready, the
memory-IC juggernaut will roll out an embedded graphics accelerator for
next year's PC, making its mark in yet another technology field, said
Micron chairman, president, and chief executive Steven R. Appleton, in
an interview here last week.
Micron will launch the single-chip graphics accelerator in the second
half of 1999, using embedded-logic cores obtained through its June
acquisition of desktop graphics designer Rendition Inc. The device will
be fabricated on Micron's standard DRAM production lines. The first
embedded-graphics chip will generate an internal bus bandwidth of more
than 2 Gbytes/s, according to Micron.
Appleton said the device will be the forerunner of a broader line of
embedded-memory ICs that could lead to an integrated graphics
accelerator and core-logic chipset.
"We're going to expand gradually in this area," Appleton said. "We
have a lot on our plate right now. We want to be sure we're successful
in all our new efforts before tackling too much more."
When introduced, the chip will likely be the first embedded-graphics
IC designed specifically for desktop systems. The embedded approach has
proven popular in notebook computers, with its smaller size and lower
power, but because the integrated die is typically more expensive than
separate discrete-logic and memory ICs, it has so far failed to attract
a wider audience.
Micron said it will hold off from the laptop graphics-accelerator
market for the time being because of the additional power-management
engineering required.
Even before it bought Rendition last June in a bid specifically
designed to pull in embedded desktop-graphics expertise, Micron was
pursuing integrated-logic development with LSI Logic Corp., Milpitas,
Calif. However, that two-year joint effort appears to have ended. "Both
companies achieved their goals to understand better the technology
involved," Appleton said. "We now appear to be moving in different
directions as we start to enter production."
While the difficulties of embedding memory have kept many DRAM makers
out of the market, Appleton sees adding logic-chip production in Boise
as no big deal. Asked how, as a latecomer to an already intensely
competitive field, Micron will win market share, Appleton asserted:
"This is nothing new to us. We've had to do this in every market we
entered, from DRAMs to PCs. We can be very competitive."
Micron is also broadening its market to distance itself from its
rivals, which are chipping away at the edges of the main-memory market,
according to Paul Dlugosch, product marketing manager for the company's
new graphics-chip line.
In addition to its growing design arsenal, Micron has enlisted the
aid of the U.S. government to ward off would-be competitors-among them
Taiwan's DRAM makers, which have assembled a large manufacturing base.
Last month, Micron filed a petition with the Department of Commerce
and the International Trade Commission alleging the island's
manufacturers have been selling their DRAM in the United States at less
than production costs in an effort to gain an unfair market advantage.
Appleton fired a few brickbats at Taiwan-based chip makers for
continuing their expansion in an era of DRAM oversupply.
"The Taiwan producers' continued irrational, large expansion of DRAM
fab capacity is completely unjustified in the current three-year market
downturn," he said. "By contrast, Japanese companies are cutting
semiconductor capital expenditures. The Koreans appear to be actually
cutting back DRAM production in a strong sense of self-preservation."
Appleton said a decision by Taiwan to slow its growth could help the
troubled market find better balance, As it stands, Taiwanese suppliers
have a 4% to 10% share of the DRAM market, according to varying
estimates.
"If Taiwan stops its irrational expansion of DRAM fab capacity, the
major share of bit-rate growth in the next few years will be from die
shrinks," he said. "But this adds only 30% to 40% bit growth a year,
and we haven't had such low bit growth for 20 years.
"Since demand continues in the very high double digits, there is a
good chance supply and demand will come into balance," he said.
---
Micron chairman Appleton:
On Intel Corp.'s $500 million investment:
Asked about reports that Intel actually was willing to invest a
larger sum in the DRAM market, Appleton replied: "I don't know what
amount Intel was planning to invest in the [global] memory industry. If
Intel had wanted to invest more in Micron, that would have diluted our
stockholders' shares. We had to balance how much we would accept
compared to how much this would dilute Micron stock."
On manufacturing Direct Rambus DRAM:
"It will be a major challenge to produce Direct RDRAM on the same
cost basis as double-data-rate SDRAM. There's no doubt that Intel is
looking to Micron to work on all the Direct RDRAM technical challenges.
"We can get a smaller Direct RDRAM die size by going to a
0.18-micron, or even to a 0.15-micron, feature size. Because Micron is
far ahead of any other DRAM manufacturers, ... we expect to have the
most cost-effective chip on the market."
On Double-Data-Rate SDRAM and SLDRAM:
"It's difficult for us right now to know where alternative [wideband
memory] architectures will end up. We'll make whatever DRAMs our
customers want. It appears DDR-SDRAM might go to the [PC] server and
workstation market. We're still doing work on SLDRAM."
On NEC Corp.'s Virtual Channel Memory:
"We're looking at Virtual Channel. It can have some advantages if
customers move to 133-MHz SDRAMs. We'll be watching the market."
On Micron's 1999 capital investment:
"Micron had capital expenditures of $920 million in its 1998 fiscal
year [ended Sept. 3], and we expect to have about the same level in the
1999 fiscal year. We have $1.7 billion cash resources available-$500
million from the Intel equity investment, $700 million from Texas
Instruments financing, and $500 million from our cash on hand."
On process-technology migration:
"Micron is now producing virtually all 64-Mbit DRAMs at 0.21 micron.
We're starting 0.18 micron, and next year most production will be at
that generation. We'll have limited early production at 0.15 micron by
the end of next year."
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