Micron Investor Day: Big Plans for Tomorrow

Pretty photo of a die reflecting a rainbow of lightDuring Micron’s May 12 Investor Day Conference the company presented a number of new memory technologies and one compelling new business strategy that The Memory Guy thought were worth sharing.  The audience learned of yet-another planar DRAM process node, Micron’s layer count for its next-generation NAND, how a portion of its proprietary SSD controller has been absorbed into the NAND chips, and finally of a new approach to contracts to help manage memory chips’ notorious price swings.

1εnm DRAM (that’s an epsilon!)

The only Greek I ever learned was in college, where the Greek alphabet was used for math symbols (πr²), abbreviations for measurements (kΩ, µF), and fraternities or honors societies (ΦBK).  DRAM and COVID-19 are now expanding my understanding of the Greek alphabet.

CAD drawing of a cross-section of Micron's 1β DRAM designFor whatever reason, DRAM manufacturers stopped using numbers to define process nodes when they dropped below 20nm.  They started with 1Xnm, expecting only to produce three nodes between the 20nm and single-digit nodes (if single digits could be made to work at all!)  But after 1Xnm, 1Ynm, and 1Znm the industry got to the end of the Latin alphabet, and had found ways to introduce yet more nodes in the teens of nanometers for which they needed names.  Other companies started over with the Latin alphabet and went to 1Anm, while Micron chose to “Go Greek”.  The company pulled ahead of its competition starting with 1Znm and now has 1αnm DRAM in volume production, with 1βnm in its “yield ramp” phase and slated to ramp production starting before the end of this year.

Unlike its competitors, Micron says that the company has no need to use costly extreme ultraviolet lithography (EUV) until it starts in calendar year 2024 to produce its 1γnm chips, which are currently in “yield enablement”.  After 1γnm comes 1δnm, which is currently in its “structural development” phase.  Pathfinding is underway for the 1εnm node.

So, thanks in part to Micron, I now recognize alpha, beta, gamma, delta, and epsilon: α, β, γ, δ, and ε.

During its Investor Day, Micron’s EVP of Technology and Products Scott DeBoer explained that the company expects to ship its 1εnm node before it has any need to go to a 3D DRAM approach, although it is already investigating 3D DRAM technologies, which will be introduced “at the right time for Micron”.  (I’ll publish a 3D DRAM post in the near future, and plan to present various spins on the technology at the Flash Memory Summit in August.)

Management also spoke of other important new DRAM technologies like Hi-k metal gate peripheral logic, its leadership in DDR5 production, other advanced DDR interfaces, as well as CXL and the company’s work on HBM3.  I won’t be going into detail on those in this post.

232-layer NAND flash

Conceptual model of 232-Layer 2-Stack 3D NAND with CUA (CMOS Under Array)As it did with DRAM, Micron pulled ahead of its competition in 3D NAND layer count with its 176-layer product, and now plans to ramp a 232-layer chip which is also targeted to ramp by the end of this year.  This part uses only two layers of string stacking, which is something of a surprise, since Micron first used string stacking in its 64-layer part, and this product has almost four times as many layers.

Scott DeBoer shared a roadmap for NAND with 2YY currently undergoing “yield enablement” to follow the 232-layer NAND, progressing after that to 3XX layers while pathfinding is being done today on a 4XX-layer chip.  Recall that Micron was the first to ship a 176-layer NAND, and the company intends to keep its layer count ahead of that of its competition’s.

Micron strives to become a more important supplier of data center SSDs, and both its process leadership and its controller strategy (below) should help in this direction.

Flash with Controller Functions

The 232-layer NAND appears to be the first to include some of the functions of an SSD controller.  Micron didn’t say much, except that the part has been “optimized for leadership in managed NAND and SSD” and that it will use a “combination of external and optimized internal controllers”, an approach that was also referred to as “split controllers”.

I decided that the details of this were better left to The SSD Guy, so look there for a post on NAND with internal SSD primitives.

New Contract Approach

Although Micron’s focus for the past many years has been on technology, its current management team has recently launched initiatives to lead in certain business aspects as well.  Over the past two years Micron has convinced its customers to sign long-term agreements (LTAs) in which they commit to purchase a certain quantity of parts and Micron commits that those parts will ship to them.  While this doesn’t sound like much, it has helped Micron to greatly improve the quality of its production forecasts while assuring customers that they won’t find themselves with insufficient supply because of a supply/demand mismatch.

This idea has caught on, and today over 75% of Micron’s revenues are through LTAs, up from about 10% six years ago.  Many of the company’s competitors are also signing LTAs with their customers.

But LTAs don’t involve pricing, which is renegotiated monthly in many cases.  That still makes business planning a challenge.

The company’s new strategy is to negotiate a 3-year evergreen forward pricing agreement for prices that decrease steadily over time.  See the trendline in Micron’s chart below.

Conceptual chart with a wavy line for market pricing bisected by a declining straight line labeled Pricing trendline.

At the end of every year there will be a renegotiation and an additional year will be added to the agreement.  Chief Business Officer Sumit Sadana acknowledged that with this approach sometimes Micron will need to accept a lower-than-market price, while at other times the customer will have to pay a higher price than its rivals.  Micron’s intent is for this to be a fair balance, with the benefit that customers and Micron can both gain better control over their finances and profits.

Micron has already signed on one of its top-ten customers for over $500M in annual sales, and hopes to convince others to sign similar agreements soon.

Too Much to Post

This is only a recap of some of the more interesting points made by the company, but I have left out a number of equally-important points including the company’s improvements in time-to-market and its manufacturing initiatives, its global footprint, its strengthening financials, and its environment goals.  Over the next few weeks I will be sharing this information in discussions with our regular clients.

If you would like to be included in these conversations please reach out to Objective Analysis.  We look forward to providing you deep insight about the market players to help your company achieve its business goals.

Disclaimer: Micron is an Objective Analysis client