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Micron highlighted
during its 1Q06 financial conference call with analysts last month that it
plans to start the production ramp of its mothballed 300mm fab in Lehi, Idaho
by the end of 2006.
The fab will become
Micron's second only 300mm facility and will be dedicated to NAND Flash
production as part of the newly created joint venture with Intel Corp,
IM Flash Technologies. The Lehi facility, according to Micron will have
a designed maximum
capacity of 11,000 wafer starts per week or 44,000 wafer starts per
month when
fully ramped.
Production of NAND
Flash will also begin at Micron's other 300mm fab in Manassas, Virginia by the
end of 2006, which currently is producing the majority of the company's
advanced DRAM memory chips.
Company executives
highlighted that the Manassas fab would achieve capacity of 7,000wspw or
28,000wspm of mixed memory production by early 2007. Micron's advanced 200mm
fab in Boise, Idaho would also be used for NAND production though output would
be limited to the wide range of products already manufactured at the facility
and the lack of significant capacity to add further flexibility.
The NAND Flash JV will
spend around $500 million on capital equipment and cleanroom facilities at Lehi
in the current financial year while Micron plans to spend $1.5 billion on capex
to boost production at all of its main facilities in the year.
With the JV purchasing
half of Micron's NAND Flash capacity at production costs, starting in early
2006, Micron is expected to take a hit on revenues and capacity expansion until
the second half of the year. However, Micron executives reiterated that they
expected R&D savings in the region of $100 million US dollars this year due
to the sharing of NAND Flash development costs with Intel.
Micron's production
plans, reveal that the company is continuing to diversify away from commodity
DRAM production even within existing leading edge fabs such as Manassas.
Steve Appleton,
Micron's President & CEO was cautious in his comments regarding Samsung and
Hynix also shifting production away from DRAM towards NAND Flash production.
"Is there a shift going on," he questioned in response to analyst questions on
DRAM supply & demand.
Micron's move to
become a larger supplier of NAND Flash is based on its estimates that the
memory type will have a compound average growth rate of 118 percent through
2007 with margins higher than those from DRAM production.
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