Micron sees demand rising for its ‘Made-in-Singapore’ chips amid AI boom

The explosive growth of generative artificial intelligence (Gen AI) has started to spread out from data centres to consumer devices such as smartphones and laptops that use portable flash memory chips.

This is good news for Singapore, where US memory chip giant Micron Technology manufactures about 98 per cent of its top-end flash memory chips, referred to as NAND by the industry. Singapore, hence, is designated by the company as its NAND Centre of Excellence.

Mr Manish Bhatia, Micron’s executive vice- president of global operations, said the proliferation of AI-enabled consumer devices in the past couple of years is feeding the demand for long-term data storage – a task NAND chips are made for.

First, AI applications in most new smartphones and personal computers (PCs) – both desktops and laptops – are generating more and more data, and hence these devices need NAND chips to store content such as videos and images.

Then, as this AI-generated data is placed on the cloud, it is increasing the need for data centres to have storage capacity that runs on low power. For that, the best solution is solid state drives (SSDs) that are also made of NAND chips.

“We’re seeing growing demand for AI-enabled PCs and smartphones... which will start to generate more videos, more content,” he said in an interview with The Straits Times.

“So NAND is definitely starting to see demand drivers coming back again,” added Mr Bhatia, who is responsible for the company’s end-to end operations worldwide.

He is also a board member of Singapore’s Economic Development Board (EDB), and was awarded the Public Service Medal (Friends of Singapore) in 2024 for his contributions to the semiconductor industry.

Micron, which makes both flash memory and DRAM chips – the main memory processor for virtually all computers and data centres – on 23 Sep reported higher-than-expected sales of US$11.3 billion (S$14.6 billion), up 46 per cent, in the fiscal fourth quarter, which ended 28 Aug. Analysts had estimated about US$11.2 billion in sales for the quarter.

For fiscal 2025, it posted record revenue of US$37.38 billion, up about 50 per cent from the prior year. Nearly half of that revenue came from its data centre products.

A pickup in flash memory sales will top up Micron’s bigger plans for Singapore, which include its US$7 billion advanced packaging plant for high bandwidth memory (HBM), now under construction and set to start meaningful production in 2027.

An HBM cube contains several layers of DRAM chips stacked on top of one another to process large amounts of data faster while consuming a lot less power than conventional memory chip architectures.

They enable graphics processing units and other accelerators made by companies such as Nvidia and AMD to process Gen AI workloads at data centres.

That is why the phenomenal growth in Gen AI data centres worldwide, since the launch of ChatGPT three years ago, has fuelled an unprecedented rally in demand for DRAM chips.

However, demand for DRAMs is now overshooting the production capacity available at memory-chip makers, which include South Korea’s Samsung and SK Hynix, and both traditional and AI-powered data centres are increasingly opting for SSDs to fill the supply gap.

Mr Bhatia said there are also signs of constraints emerging in supply of hard disk drives (HDDs) – which are cheaper but power-hungry devices used to store and process data. But HDDs also have moving parts, which makes them slower at processing data.

SSDs, on the other hand, have no moving parts – allowing them to deliver faster data access speeds, reduced latency, increased resistance to physical shock, lower power consumption, and silent operation.

Mr Bhatia said with demand, especially for data centre equipment, stretching the ability of companies to keep up with orders, the upcycle of the chip industry is likely to be longer than usual.

Analysts say the semiconductor industry is highly cyclical, with upcycles usually lasting about six to eight quarters. The current AI-powered upcycle is at least six quarters old.

Mr Bhatia said the HBM market is likely to become as big as the standalone standard DRAM market by 2030. This means that both markets will be worth US$100 billion each in the next five years.

“That growth gives you an idea of how the demand vector is different this time from just the normal cycle, because you have got a whole new category coming that could be as big,” he said.

Also, HBM manufacturing is more silicon-intensive – which means more semiconductor wafers are needed to pack an HBM cube.

“Between the demand side being very strong, and the supply side constrained due to good technical reasons, we believe this time it could be a longer overall cycle.”

This means that when Singapore’s HBM plant starts production, it will be in a market that is still growing. Mr Bhatia said Micron remains focused on increasing its profits, and is prioritising that over gaining market share.

Even then, Micron has reached price agreements for most of the HBM3e-type memory chips it can make in 2026. Meanwhile, the company is already offering samples of the successor generation of chips – HBM4.

Micron expects to sell those products in fixed contracts, helping ensure that revenue is reliable.

Mr Bhatia said: “We’re excited to bring in advanced packaging, the industry’s most cutting-edge advanced packaging capabilities. It will be the first time in industry history that such capabilities are coming to Singapore, and we’ll be engaging with the entire semiconductor ecosystem here.”

On how a proposed tariff on US imports of semiconductors would affect Micron’s chip shipments out of Singapore, Mr Bhatia said while Micron has made a lot of investments in DRAM manufacturing in the US, NAND chips are still shipped to the US and other parts of the world mainly out of Singapore.

“I don’t think we know or even have a good indication of what the next steps are or what’s going to be unveiled (by the US administration). We’re all waiting for that. We will, of course, respond accordingly.”

In Singapore, Mr Bhatia said Micron’s enduring partnership with EDB and the Ministry of Trade and Industry “has been terrific and will continue to be a key relationship for us”.

He said: “We look forward to delivering on our role as a semiconductor manufacturing leader in Singapore. Singapore has great universities and a strong pipeline of talent that we have had the pleasure of tapping into for over 25 years.”

With around 9,000 employees, Micron in Singapore is one of the largest employers in the semiconductor sector.

To continuously expand its talent pool, the company regularly conducts career re-entry programmes as well as work-study and certification programmes.

Micron also introduced an in-house AI upskilling initiative – now in its fifth cohort and kicked off by grants from Workforce Singapore – to train employees in tools such as Microsoft Copilot and GenAI.

Source: The Straits Times ©️ SPH Media Limited. Permission required for reproduction.