Ernie Maddock – SVP & CFO
Future data use is DRAM intensive
“use of data is expanding and as you think about applications like autonomous driving and artificial intelligence, so every single thing we contemplate that’s driving the economy, the future is reliance on data.
And when you collect data, you have to sort it and you have to process it and as more and more data is processed that becomes more and more DRAM intensive. DRAM is an essential part of harvesting and collecting insights from the data that so many enterprises are collecting these days. And then obviously you have to store it and that speaks very heavily to the demand environment on the NAND side and the storage world.
China wants in to the memory market
“Sure. And there’s no doubt about China’s ambition to enter the memory market, whether it be NAND or DRAM. There’s no doubt that they are building fabs and certainly equipment suppliers will suggest that there is equipment being ordered, but at the end of the day, being able to effectively produce NAND or DRAM, so the answer is the same for either technology.”
“And we continue to see very strong demand from our customers, very willing to engage in those discussions. But in general, I would say the pricing environment continues to be — continues to be good.”
I think the big driver for server demand is that there has been a massive amount of data that people now want to use
“I think the big driver for server demand and I don’t discount that AI has been an important driver, but I think that a far bigger driver is simply there are massive amounts of data that have been collected that have sat unused for a long time and you now have people using more and more and more of that data to try to form business insights and business intelligence and that is what is driving both the content increase in servers as well as what we see in this hyperscale environment. So, AI is an important trend. I think I would actually think it will be more important on an ongoing basis than it is necessarily fully impacted at least to our 2017 view. So, this is a trend that will sustain demand we believe on a going forward basis.
NAND growth in 40% range, DRAM in 20% range
“I think given that we believe NAND bit growth CAGRs are in the 40% plus range and DRAM bit growth CAGRs are in the 20-ish percent range, NAND is obviously growing more quickly than DRAM and we will be making decisions about where to position the company from a market perspective relative to those growth rates.”