Micron stands to gain amid AI chip battle
18 Dec 2024
AS competition in the artificial intelligence (AI) chip market heats up among semiconductor giants such as Nvidia Corp, Advanced Micro Devices Inc (AMD) and Intel Corp, one company stands to gain regardless of who the winner of the chip battle is — Micron Technology Inc.
Positioned as a critical supplier of memory and storage solutions, American chip giant Micron benefits from the industry-wide demand for the high-performance components essential to AI systems.
Amarjit Singh Sandhu, corporate vice-president of assembly and test NAND operations for Micron (Singapore and Malaysia), says devices such as smartphones and laptops need different types of semiconductors to build a system.
“Imagine this: You need a set of eyes and a set of ears, you need a brain, and you need to signal where the information needs to go. Your smartphone receives and interacts with various signals, from the global positioning system (GPS), Bluetooth, WiFi to near-field communication (NFC),” Amarjit tells The Edge.
“For these signals to come into your phone, you need to have chips that can receive and convert them from analogue to digital. So, different semiconductor giants will build different specialised chips.”
He adds that the “brain” tells the signal to be stored at a certain location. When that signal is stored, Micron’s product comes into play. The “brain” is what Intel, AMD and Nvidia build, whereas Micron makes memory and storage chips.
“Micron is not competing with them. Instead, we are complementing each other because any ‘brain’ would need temporary memory and storage. Obviously, Nvidia has been commanding the lion’s share, while AMD and Intel are playing catch-up.
“All of us have our own set of challenges, but the way I see it, Micron could complement all of them. In other words, no matter who wins, we win as well. After all, they need memory, and they need storage,” he says.
US$2 bil invested in Penang
In November 2018, Micron announced a US$1 billion greenfield investment plan over a span of 10 years for its new Centre of Excellence (CoE) for solid-state drive (SSD) assembly and testing in Batu Kawan Industrial Park, Penang.
In the fourth quarter of 2022, the company announced a brownfield investment of US$1 billion for its second factory at the Batu Kawan site, which was officially opened in October 2023.
“Our total built-up of 1.5 million sq ft [combining the first and second factories] is almost fully occupied to support our future growth. Simply put, we are operating at an optimal level,” says Amarjit.
He observes that the large-scale cloud service providers, also known as hyperscalers, are building up huge data centres primarily to support the AI drive.
“Obviously, AI is very much the buzzword of today. I have been listening to the earnings calls of these hyperscalers recently, and I think all of them will continue to invest not just in Malaysia but also many parts of the world.”
He says these investment plans suggest that AI is “very hungry” for data centres, which will lead to a significant increase in workloads. However, the current infrastructure falls short of what is required.
“Looking at the amount of money that has been pumped in and is going to be pumped in, I think the data centre and AI boom is going to go on for a while,” he says.
Amarjit acknowledges that because Micron is a multinational corporation (MNC), Micron Malaysia lacks visibility of where its end-customers are.
“We make the products and sell them, but we do not know where they will end up. But the fact is that the trend of building more data centres everywhere is not a nice-to-have; it is a must-have. The UK, Germany and Spain are supporting more data centres.
“So, it is more important for Micron to look at this trend globally. With the data centre and AI boom, the world would need more memory and storage chips, including high-bandwidth memory (HBM). We are here to support the AI growth, whether or not the data centres will be built in Malaysia,” he stresses.
Apart from HBM, Micron could also supply enterprise SSDs and some specific memory modules as well as other memory and storage products to the data centres.
“In Malaysia, we build SSDs, and our Batu Kawan site is a CoE for SSD. So, we should benefit from the data centre boom,” Amarjit says.
Asked about the possible impact of the Malaysian government’s review of tax incentives for data centres, Amarjit reiterates that although Micron builds its products in Malaysia, they are sold to hyperscalers worldwide.
He says: “We welcome data centre investments in Malaysia, as we will benefit from the AI growth. But even if these investments do go elsewhere, we will still continue to benefit because these data centres have to be built in other countries, if not Malaysia.”
Notably, Nikkei Asia had in June reported that Micron was considering building HBM in Malaysia to capture the AI boom. Amarjit says: “I think Micron will make our announcement accordingly, but this [news] is definitely not announced by Micron. So, we’ll avoid commenting on this information.”
Nevertheless, he points out that HBM is not the only product that supports AI.
“Today, Micron produces all of our HBM in Taiwan. As the need and demand grow, we will review and decide where else our HBM operations need to go. That’s the situation. We have not made any decision.
“One thing is for sure: We have a good range of memory modules to support the AI market. Micron is well-positioned to capture these opportunities.”
‘The best is yet to come’
Amarjit likens AI to the advent of the internet, recalling that when it emerged in the late 20th century, there were doubts about its potential to change the world. Today, the world stands at a similar juncture, with AI poised to play that transformative role. “It’s a long runway and that’s why we keep saying that, for memory companies like us, the best is yet to come because AI will drive a new cycle.
“Whatever we have been supplying in the past — whether for phones, laptops, PCs and everything for industry, for data centres — will still be there. But this is probably a brand-new era for us to cater for the needs and wants of the industry.”
Amarjit believes AI is where Micron positions itself with new products to support, and it will be the group’s new revenue stream in the coming years. “We are probably in a good place, where our business of the past is still there and we have AI as the next big thing.”
Like other global chipmakers, Micron has been navigating the geopolitical tensions between the US and China for the past eight years. In addition, the Covid-19 pandemic has further strained the overall supply chain.
Amarjit says Micron has positioned its manufacturing in different geographical locations to mitigate shocks.
“So far, it has worked well for us. We did not miss any customer demand during Covid. I would probably say this tension is going to be here to stay. For most industries, I think it’s a new normal and we will have to adjust to it.”
Fortunately, he adds, Malaysia has been very friendly to most countries, and that is very helpful for companies such as Micron.
“On the ground, we don’t feel any negative impact from the trade war because the government has set up an environment that is very business-friendly.”
Bridging the talent gap
Micron started its first facility in Penang in 2019. Today, with two facilities, the group employs about 5,000 people, including operators, technicians, engineers and research and development (R&D) staff.
“On average, we hired 1,000 people every year over the past five years. At this point in time, our workforce of 5,000 is quite sufficient to meet the needs of our two facilities. But we will continue to hire good talents [as the need arises],” says Amarjit, adding that the group has relatively different hiring strategies compared with other companies.
For the hiring of operators, Micron engages with technical and vocational education and training (TVET) schemes, government agencies and industry institutions. For the hiring of technicians, the group engages with the polytechnics.
“The biggest challenge is always engineers. Like many companies, we also engage with universities to attract human talent. At the same time, we also work on the non-traditional fronts. For instance, we are trying to encourage women engineers,” he says.
Micron is a founding member of the Society of Women Engineers (SWE) in Malaysia. The group is working with industry partners to get more women interested in engineering.
“Hopefully, through SWE, the experienced lady engineers will come together to encourage and excite the younger girls about engineering as well as provide them with mentorships.
“Meanwhile, we are also trying to get women, who had taken one or two years off from their working life for family reasons or because of personal challenges, to return to the workforce. All these efforts can help bridge the talent gap,” says Amarjit.
Another non-traditional path that Micron is taking is that it is the first company in Malaysia to engage a uniformed group, specifically military veterans.
“We have given talks to 500 former military folk and recently hired 25. We are trying to get more of them on board; we are identifying suitable job positions for them so that they can fit into our organisation.
“For example, some veterans from the Air Force dealt with aircraft. So, if we give them six months of training, they could be good technicians or supervisors. Overall, Micron has a fair representation with respect to gender, race and ethnicity,” Amarjit says.
Source: The Edge Malaysia
