Micron at Needham Conference Notes

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Ernie Maddock – CFO

Autonomous provides an opportunity for high growth in automobiles

“As we project forward and you think about realizing the vision of autonomous vehicles you are talking likely about four to five times increase in the current memory content on average per vehicle and then you start thinking about some of just the outright storage capabilities of having real-time maps and keeping them updated so that autonomous vehicle is equipped with the latest and greatest and you could be talking about up to a terabyte of storage in a car. So, it’s certainly over time represents one of the most significant growth opportunities from a percentage point of view and you obviously, there are fewer cars sold than there are phones or PC. So, that high growth rate is applied over a bit of a smaller base, but is a really promising area and I think it plays very nicely into the company’s strength because automotive customers are customers with whom you have to develop a much longer term relationship. They have to have assurance of supply; the entire supply chain of any company has to be fully qualified to automotive standards, which generally tend to be higher levels of scrutiny and care around the entirety of the supply chain.”

This is a cyclical industry

“The semiconductor industry went through a “cycle”. The cycle was shorter. It was less deep. Micron, although we lost money in a couple of quarters, we made money for the fiscal year so I think there’s really significant data that suggests that industry consolidation has delivered benefits relative to historical performance. I would be the last person to say this isn’t a cyclical business because the one thing that suppliers will never be able to control his the demand environment and as you know we’re in a very capital-intensive business.

We started with 25 players in this industry and now we’re down to three

“On the NAND side, you have four holders of IP, right. So, you have Micron Intel partnership, there’s Toshiba WD partnership, and then Samsung. So, I mean I think it’s important to remember in DRAM we started out with 25 players in we’ve gotten down to three and were starting out essentially four holders of IP and so whether or not — and by the way, DRAM is 30 odd years old and NAND technology is roughly half that age. So, whether or not there needs to be more consolidation you can make an argument either case I think it’s reasonable to think that any such consolidation is a way it’s coming simply because the industry starting from a very different place than the DRAM industry started from.”