Metamorphosis of an industry, part 1

Micron Technology | September 2018

Micron is marking our 40th anniversary on October 5, 2018. As part of this milestone celebration, we wanted to share our perspectives on the Metamorphosis of an Industry. We hope you enjoy our three-part blog series, looking back at the history of memory and the fantastic, foundational changes we’ve been a part of during the last half century.

Where It All Began – Standardization

There was a time, in the not-so-distant past, when computing technologies were limited to just a few market solutions to support centralized data center computers, desktop PCs, calculators and a burgeoning portable cellular telephone market.

At the time, innovation came largely from vertically integrated operating models that drove component standardization. Big original equipment manufacturers (OEMs) that were vertically integrated held tremendous power in the industry. IBM and HP, for example, were involved in the manufacturing of many key aspects of their end products. In addition, these powerhouse OEMs would often manufacture printed circuit boards, hard disk drives and semiconductors that were critical to their system-level products. This created a low-risk environment for OEMs to purchase the components they didn’t manufacture themselves, like memory.

Large OEMs helped usher in an important era of standardization, which included the emergence of the JEDEC organization, and a dominant CPU architecture (Intel x86). Standardization not only played a critical role in accelerating the growth of the computer industry, it also gave great power to OEMs who played a key role in defining the standards.

Semiconductor manufacturers were also vertically integrated and wanted to control their own destinies. Most were self-sufficient and wholly monolithic in their development and manufacturing processes. Each built fabs “cheaper than anyone else could” and designed and built their own testing equipment. It was a business culture of pride and self-reliance.

As more manufacturers invested in (and governments subsidized) the semiconductor industry, the consequences were unavoidable. Too many players developing similar products at high capacity led to a highly commoditized — and highly volatile — environment. At its peak, the memory landscape included close to 40 players, including Micron. The volatility of this turbulent period dramatically shrunk the playing field to a handful of manufacturers. Today there are only three of significance.

Micron’s first 20 years were built on tenacity, innovation and a competitive drive to be the best. During that time, we operated as a U.S.-centric company with 100 percent of our manufacturing and about 80 percent of what we built being built in Boise and sold in the United States. That all changed in 1998 when we acquired TI’s worldwide memory operations. Virtually overnight, we went from being a Boise- and U.S.-centric company to taking our place on the international stage as one of the largest memory producers in the world.