This article first appeared in The Edge Malaysia Weekly on September 27, 2021 - October 3, 2021
DURING a CEO panel discussion at Micron Insight 2019 in San Francisco, the head honchos of four global tech giants were asked where they thought the most exciting action would be in the next decade.
From high-performance computing data centres and fifth-generation (5G) mobile network to artificial intelligence (AI) machine learning, Internet of Things (IoT) and autonomous vehicles, each CEO gave a different response.
But as they discussed their next-generation passions in the renaissance of silicon, a common denominator emerged — memory and storage.
The one thing that they all agreed on was that tech companies involved in memory and storage solutions would be poised to benefit from the explosion of data, regardless of where the growth comes from.
Sanjay Mehrotra, president and CEO of Micron Technology Inc, was one of the panellists asked about the “next big thing” in the semiconductor industry.
In 5G, he sees a huge opportunity for Micron as it is not only about smartphones but also about AI machine learning, which will be accelerated with billions of IoT devices creating tremendous amounts of data.
Now, two years on, Mehrotra acknowledges he is leading the US-based memory chip giant during an exciting period, where changes in computing architecture and AI technologies are driving new opportunities for memory and storage to transform how the world uses information to enrich lives.
“I think what is important to understand is, we are barely scratching the surface when it comes to AI. We are seeing only the tip of the iceberg and AI is going to transform our lives, our industries and our planet over the course of the next decade or two, so this is really the next best thing since the invention of electricity, like some have said,” the 63-year-old Indian American business executive observes in a rare exclusive interview with The Edge.
Mehrotra points out that AI is dependent on data, which is required to drive greater efficiency in business operations as well as to enrich customer experience worldwide.
“More data is being created, more data is being analysed, and insights from data are being drawn in all industry verticals — whether it is medical research, finding cures for diseases for humanity that have been left unsolved since the beginning, or it is in the financial sector, manufacturing sector or retail environment in all various multitude of industries,” he elaborates.
Mehrotra highlights that Micron is at the heart of all these trends of the future as memory and storage is where data lives. Against this backdrop, 5G provides a magnitude of improvement in terms of connectivity of people, and of smart devices.
“Between the proliferation of smart devices to the cloud and to industrial applications, I think this is going to be a golden age coming up for memory and storage. When we look at the next 10 years, AI will be one of the key drivers for the application of memory and storage,” he remarks.
Mehrotra stresses that AI is not just another buzzword. Instead, it is a reality that is beginning to happen. “You are seeing it — whether it is in your smartphone with facial recognition, or in our own factories where we are manufacturing state-of-the-art technologies and wafers,” he says.
For instance, a lot of sensors collect manufacturing data and regularly analyse it at Micron’s premises around the world as well as in the cloud, helping the group to bring faster, more efficient production capabilities online, drive manufacturing needs better, bring costs of production down and reduce defects in production.
“These are all examples of AI that are actually happening today in Micron’s facilities, in our customers’ applications, so AI is not a buzzword. It is already happening, but there is a lot to be really benefitted from in the years to come,” he points out.
Mehrotra says cloud is expected to be a big driver of growth in memory and storage. Within cloud, both for memory and storage, that means dynamic random-access memory (DRAM) and NAND demand will be growing faster than the rest of the industry.
DRAM is widely used in digital electronics where low-cost and high-capacity memory is required, such as computers and graphic cards, whereas NAND is a type of non-volatile flash memory being used in digital cameras, USB flash drives, smartphones and solid-state drives.
“Cloud is absolutely a big driver of growth for our products. Cloud growth is being driven by the trend of AI as well as new computing architectures. These are really taking computing to a new paradigm, enabling greater attachment of memory, greater usage of higher-density and higher-bandwidth memory, which are all critically important for high-performance, data-intensive workloads in the cloud infrastructure — again driven by the underlying trend of increasing adoption of AI,” Mehrotra explains.
Micron is one of the world’s largest semiconductor multinational corporations and a global leader in innovative memory solutions. It is the only company that manufactures major memory and storage technologies, namely DRAM, NAND, NOR and 3D XPoint memory.
NOR flash memory is another type of non-volatile storage technology, which is faster to read than NAND flash, but more expensive and also takes longer to erase and to write new data. NAND has a higher memory capacity than NOR.
Bloomberg data shows that Micron’s top five shareholders are Vanguard Group Inc (7.86%), BlackRock Inc (7.47%), State Street Corp (4.09%), Primecap Management Co (3.88%) and Capital Group Co Inc (3.69%).
Mehrotra joined Micron in May 2017 after a long career at flash-memory pioneer SanDisk, which he led from start-up in 1988 until its eventual sale in 2016.
In addition to being a SanDisk co-founder, Mehrotra also served as its president and CEO from 2011 to 2016, overseeing its growth to an industry-leading Fortune 500 company. Prior to SanDisk, he held design engineering positions at Integrated Device Technology, SEEQ Technology and Intel.
Mehrotra holds bachelor’s and master’s degrees in electrical engineering and computer science from the University of California, Berkeley, and is a graduate of Stanford’s Executive Business Program. He holds more than 70 patents in flash memory design and systems.
It is worth noting that in 2000, semiconductor memory and storage contributed to nearly 10% of the total semiconductor industry, but today, it makes up 30% of global semiconductor industry revenue.
Mehrotra notes that the global semiconductor industry is worth some US$480 billion (RM2 trillion), and semiconductor memory and storage are a large part of this. Over the course of the next several years, he expects that memory and storage will continue to grow faster than the rest of the semiconductor industry.
“We have projected that in the 2024 timeframe, NAND and DRAM will become a nearly US$183 billion market, so these are massive opportunities that are in front of us and these are driven by diversified markets, be they from cloud, smartphone, personal computer, to your networking, gaming, consumer and industrial applications range and, of course, the automotive market is a very big part as well.
“The smart vehicles of the future are going to be like data centres on wheels, because they will be connected, they will be highly intelligent, they will be increasingly autonomous vehicles and they will need more and more memory and storage in them, just like you have them in data centres today.”
Commenting on the unprecedented chip shortage crisis, Mehrotra opines that the pandemic has driven digital acceleration, and hence, a tremendous increase in demand for semiconductors, including increasing demand for memory and storage solutions.
Mehrotra says Micron is working closely with its customers to understand their future demand requirements, while continuing to manage its production, maximising production capabilities and continuing to advance its technology, so that more solutions can be created to meet customer needs.
“We have had very resilient and flexible supply chain operations, which benefit from our well-diversified global footprint that has all enabled us to continue to really serve our customers in this difficult period of shortages and continuing to manage the mix of our business, so as to support our customers to the best of our abilities in the near term and for the longer term as well,” he says.
Micron saw its net income almost double to US$3.14 billion in the nine months ended June 30, 2021 (9MFY2021), from US$1.69 billion a year ago. Revenue also grew 26% to US$19.43 billion compared with US$15.37 billion the year before. The group generated a net income of US$2.68 billion in the financial year ended Sept 3, 2020 (FY2020), on revenue of US$21.43 billion.
When asked about the impact of the ongoing US-China trade war on Micron, Mehrotra says he believes a global footprint is essential to the group’s long-term success. Today, it has customers from China, the US, Europe, as well as other Asian countries.
In terms of manufacturing, Micron operates manufacturing facilities in Japan, Singapore, Malaysia, China, Taiwan and the US. As for R&D operations, the group has strong teams in the US, Germany, Italy, China, Taiwan, Singapore, Japan and India.
“So, you see, Micron has done a great job diversifying globally all aspects of its business, as well as addressing well-diversified and market opportunities. This positions us well for the future and we will certainly continue to work with our customers across the globe, including our customers in China who very much value our technology and products,” he says confidently.
Over the past 12 months, shares of Nasdaq-listed Micron have gained about 45%. At last Tuesday’s close of US$72.14, its market capitalisation was US$81.21 billion.
Mehrotra is of the view that environmental, social and corporate governance (ESG) is an important priority because Micron is a company that not only achieves results in driving innovation and product leadership, but also cares about the people within its four walls as well as the community and the planet.
“With respect to sustainability and environmental aspects, Micron has actually announced that over the course of the next five to seven years, we will be investing nearly a billion dollars towards making our operations more sustainable in terms of greenhouse gas emissions, renewable energy use, water use, as well as waste recycling and disposal. Paying attention to environmental initiatives is important for Micron because it helps our environment and our planet become better,” he says.
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