Micron Technology, Inc (NASDAQ:MU) – will transition from DRAM to mDRAM
Micron Technology, Inc (NASDAQ:MU), a prominent entity in the global semiconductor devices market. In addition to several other products, it manufactures and markets DRAM memory products. As a matter of fact, this segment accounts for 40% of the company’s valuation. Dipping personal computer shipments have reduced DRAM memory products’ demand. Currently, the DRAM market is also ailing from a mismatch in demand-supply as well as declining selling prices. All these factors have had a very negative impact on industry profits. Traditionally, PC manufacturers were the major DRAM buyers. It was obvious that a slowdown in this market would impact the DRAM market.
Unstoppable technology changes
But demands will change face and technology will evolve to keep pace. Mobile device demands are now growing by leaps and bounds and mobile DRAM’s or mDRAM have now boosted DRAM sales. This variant is a low-power DRAM that is used in mobile devices. At the moment, less than 10% of MU’s revenue is attributed to its mDRAM sales. But the company has almost sealed the Elpida acquisition and there is bound to be a significant increase in these numbers and Elpida flexes a lot of muscle in the mDRAM market. In the 2012 Q2, Elpida’s mDRAM revenue stood at $218 million, which was nearly double than that of the $106 million, Micron Technology, Inc (NASDAQ:MU)’s mDRAM revenue.
MU’s installed capacity-base is all set to get a lift from the Elpida acquisition. Not only will it put Micron in second place in DRAM manufacturing (right after Samsung), but the company will now have the edge of supplying its chips to Apple, which is a definite plus in terms of mDRAM shipments.
What is an mDRAM?
An mDRAM or mobile DRAM is a specialized DRAM. It incorporates the low-power features that are required in mobile phones. Manufacturers such as Micron, Elpida, Hynix and Samsung have been facing a shortfall in inventory as OEMs of tablets and smartphones have been literally racing through the stock that is already on shelves. However, what is also the need of the hour are the changing mobile bandwidth requirements. It means that a lane-change will have to take place in the MDRAM space soon.