By Bolaji Ojo
What’s at stake:
The memory semiconductor market is characterized by dizzying price swings, none more severe than the recent rounds. DRAM makers are soaring again after a severe dip, but this upswing is riding on the wings of artificial intelligence and high-bandwidth memory. It rests on nothing stronger. With the leading players rushing to build more fabs, within the next few years, the sector is certain to slide into another depression. The next one may be even more severe.
Sanjay Mehrotra must have skins tougher than the hides of a rhinoceros.
It’s hard to see how else Mehrotra, president and CEO of memory semiconductor vendor Micron Technology Inc., managed to cope with the market’s sharp downturn over the last couple of years. That swing, which resulted in negative margins, has suddenly reversed.
Micron is thriving again, enjoying a massive 62 percent increase in annual sales and the prospects of another round of double-digit revenue growth in the next two years.
The Boise, Idaho-based company is not alone. Demand for memory is hot, especially high-bandwidth memory (HBM), the much sought after components AI vendor Nvidia and its rivals crave so much for.
It would be tempting to believe the memory market has overcome its notorious challenges of overcapacity, undercapacity, pricing and margin swings and market opacity. It hasn’t. In fact, even as the market swings higher now, a wary eye must be kept on the veracity of current orders to avoid a repeat of recent errors.