During the course of this meeting, we may make projections or other forward-looking statements regarding future events or the future financial performance of the company and the industry. We wish to caution you that such statements are predictions and that actual events or results may differ materially. We refer you to the documents the company files on a consolidated basis from time to time with the Securities and Exchange Commission, specifically the company's most recent Form 10-K and Form 10-Q. These documents contain and identify important factors that could cause the actual results for the company on a consolidated basis to differ materially from those contained in our projections or forward-looking statements. These certain factors can be found in the Investor Relations section of Micron 's website.
Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. We are under no duty to update any of the forward-looking statements after the date of the presentation to conform these statements to actual results.
Welcome, everybody. I apologize for starting at 6:00 , but we couldn't get the room at 5:00 . We do appreciate everybody being here and allowing us to share some thoughts about the company with you. I also welcome everybody on the webcast. We're going to start out with some commentary from myself about where the company is today, and then you'll hear from the business unit guys and some discussion from Mark Durcan around the ops and technology. I'll come back up for a little more discussion around the industry, and then, of course, we'll open it up for Q&A. Consistent with what we did the last time, all the Q&A will be at the end, and we'll leave a lot of time for that, and everybody will be available for the Q&A as well. A couple of things that you'll note.
Mark Adams is not actually doing a presentation. Ron Foster's not doing a presentation, just by virtue of where we're at in the cycle in terms of the quarter for us. They will be here, though, available for questions, and we'll all be up here at the end, and you can ask on whatever topic that you want to ask on. With that, let's get started. I just quickly wanted to summarize again, you know the company's done a lot of things to get where we're at. We've pointed out that we've been pretty efficient in our capital deployment. We have been through a number of M&A activities over the years, and our portfolio is also very broad now.
I'm not going to spend a lot of time on this because we've talked about it before, but I just think that it's important to point out that we are in a pretty good place. Now, I'll set that aside from what we're experiencing in the economy of the industry. Micron, in and of itself, over the last decade, has done a lot of things to make sure that we would be able to either take advantage of opportunities as they come or that we did take advantage of a lot of opportunities that have occurred in the past. With respect to how that's being reflected in the company, you know our in-market diversification is really very good. This is the most recent data around how it breaks down for our in-markets.
Obviously, we have a greater presence in some of the more specialized markets, and in correlation with that, we still have a presence in some of the more difficult markets, in particular today. Clearly, we still participate in the PC business. We still participate in some of the consumer products. The point here being that, as compared to where we used to be, our diversification is actually very strong. I've made this comment before around how the DRAM and the NAND cycles look compared to each other. If you remember back in the 1980s, the DRAM really was very price-elastic and had more significant movements in terms of its pricing. In other words, we would have enough cycle that would last somewhere between two and three years, and we'd have a down cycle that would last somewhere between a year and a half and two years.
It was pretty consistent as we went through the cycles. I used to say that I had, when we went into the cycle last time, that it was my seventh cycle. If you look at DRAM right now, and I'll show you some data later on, clearly we're in a cycle. I guess, for me, this is my eighth cycle now watching it. There's a lot of similarities to what used to happen in the DRAM as to what is transpiring in the NAND. This graph is just there to illustrate that if you overlay really what happened in the early decade of the DRAM and you overlaid what happened essentially the last decade in the NAND, it's amazing how similar the charts look. I'll come back to the significance of that in a little bit.
When you look at what's driving the NAND and the consumption of NAND, this particular estimate has the demand a little bit lower than others. I've seen it as high as maybe 80% or 90% for the year. The point here is that if you look at the diversification of the applications in NAND, this is already at a point in time where it took the DRAM essentially probably 20 years to get to. If you think about the DRAM and the applications that the DRAM went into, it was almost entirely the computing world up until probably around the year 2000. In fact, if you look at Micron's revenues in the 1990s, we were 95% going into the PC computing space, and it's obviously a lot different today. It took us a long time to get there. I mean, it was 25 years.
If you look at where the NAND is today and the diversification of the applications, it's actually accelerated to the point where it's happened much, much quicker than it ever happened in the DRAM environment. For Micron in particular, if you look at the diversification of our own product line, this is the first quarter where we've crossed over. NAND is actually going to account for more of our revenues than DRAM did in the quarter. That's the first time that we've had that transition. We've been talking about that coming, but it's actually happening for us right now. By the way, I don't point this out because we don't like the DRAM business. We're obviously very heavily involved in the DRAM business, and I'll speak later about why I think that business will have opportunity downstream.
It's just to point out that we've also been able to take advantage of the evolving memory markets that have consumed NAND. You might expect this chart to cross over anyways a little bit because the DRAM pricing has been down more recently as compared to the NAND pricing, and obviously that affects revenues. The real story here is that as you look at Micron's diversified product portfolio as compared to where, and we only go back a few years and show you where we were before. If you actually went back into the early 2000s and the late 1990s, of course, this chart would be much, much different around DRAM and somewhere in the neighborhood of 95% dependency.
We've really transitioned the company to have a broad memory portfolio, and that's being reflected in the results of the company, some of which I'm going to show you a little bit more data when I return back up to make some additional comments. To set the stage for the individuals that are going to come up next, you know we restructured the company. We talked about creating these business groups, and we really have somewhat of a hybrid model. Just to remind everybody, if you think about the way the company used to be organized, we were really primarily focused around technology. We really have a hybrid model today. We have two groups that are very focused on markets, and we have two groups that are also very focused on technologies, and they interact in a way that's very advantageous to both of them.
We've now had this structure for about a year, year and a half, and we like it. We actually think it's working very well. We're not looking to do something different than what we're doing right now in our structure. We think it's working well, and you'll hear from all the leaders of these groups, and we think it's been very effective in terms of what we're trying to accomplish in terms of market penetration. Those business units you'll hear from, and then after them, you're going to hear from Mark talk about the left-hand side of that chart, which is around all the operations and technology that feed into that. With that, I'm going to turn it over to the next group. Oops, did that kick it out, Ralph? Oh, you're just okay. Great. To Glen Hawk.
Thanks, Steve. Is Mike on? Okay. Steve showed a graph that demonstrated the nice exponential growth that we're seeing in the NAND industry. The cloud is definitely one of the things that's driving that growth. I'll go a step farther than that and say that flash is really driving the cloud. The cloud that we know and live with today is enabled by flash. In fact, the cloud of tomorrow that we'll all use and benefit from, flash is required for that. We're right in the middle of that. At first, what we saw was flash was put behind a conventional SAS or SATA hard disk drive interface. It was very easy to put that into some of the existing data centers and immediately reap the benefits that flash technology had to offer.
More recently, though, there's been a lot of action on a more disruptive side of flash in the data center, and that's in a memory on the server side with flash behind a PCIe interface. I'll talk a little bit about that later. From a numbers perspective, what I think is interesting is earlier in the year, some large cloud computing companies made some pretty interesting announcements that caught my attention. One company came out and said, "We've shipped 10 PB of flash bits into the enterprise." That's good. It's always good to see one of our customers of flash make such an announcement.
Another company came out and said, "We've shipped 15 PB." For the fun of it, I got with our team and I said, "Hey, how much NAND flash have we shipped into this industry over the same period?" We came up with a number of about 65 PB. A large amount of our flash is already going into this segment, and we're participating in it in some very complicated ways, which I'll explain in a second and hopefully add some clarity around. It's not enough to just have flash in the cloud. People need to be able to use that. While we had desktops and laptops and notebooks that we could all use to access data from the cloud, clearly, over the last year or so, one of the big stories has been the emergence of tablets.
This gives people another way to interact with the cloud in a very interesting way. We've taken a look at our projections, and over the next two years, we believe about 55 billion GB of NAND flash are going to be shipped into tablet-like devices over the next five years. Tremendous opportunity for us. If you refer back to the chart that Steve showed, this accounts for about 15%, maybe even 20% of the flash bits at the end of this five-year period. Tremendous amount of flash. From a Micron perspective, that's good. We benefit by providing flash for these edge devices as well as the cloud. I'd like to speak a little bit about how we've been participating in that. To illustrate that, what I've put up here is just a snapshot of a sampling of the companies that are participating in the ecosystems in and around flash-based SSDs.
Over on the right, of course, you have the NAND manufacturers. You have some third parties who don't make NAND but have become very proficient at making solid-state drives based on flash. On the far left, you have the consumers of these devices, some more traditional ones, HP, EMC. Of course, there's others. IBM, Dell just didn't have enough room on this slide for everybody. Of course, we have some new interesting ones, Google, a search capability, and also social media companies like Fusion. There's a tremendous amount of activity in this area, and we're participating in all of this through selling our NAND flash directly to some of these companies, as well as our fully integrated solutions such as solid-state drives. I'll talk more about that later.
I'd like to underscore this a little bit by also rolling a video here that you can hear from our customers directly what they're doing with our product.
Our customers have a great communication barrier that exists between patient and caregiver. That is regardless of language spoken, someone's culture, or someone's level of literacy. We're delivering on that mission with Fraser. Fraser is the world's first multilingual medical communication system. Storage is extremely critical for the success of Fraser, and that storage needs to be reliable and perform at a high level. Flash SSD delivers on both those key capabilities. Fraser is going to be in the field in disaster relief situations, environmentally challenging situations, and in hospitals and clinics. If Fraser goes down, people's lives are at stake.
SoftLayer is the innovation leader in the infrastructure as a service hosting provider. We try to offer up anything we can that a customer might desire, whether it be a physical solution, a virtualized solution, or a mixed combination there. With the advent of social media, data mining, data analysis, all of these are very high I/O intensive, heavy throughput applications out there. With those in mind, we need to find a storage solution that will supply what the end customer needs. Flash and SSD is the one that supplies that today.
Data Design Corporation is a turnkey product design and manufacturing company. One of the products that we're making is a high-end PCI Express solid-state storage device. This product would not have been possible for us to produce had it not been for a managed NAND technology such as Micron's ClearNAND. It really enabled us to achieve the density and the power and the IOPS that are required for what our customers are looking for.
Okay. That was just a sampling and wanted to provide that additional color to give you a feel for the diversity that's in this space and to kind of further illustrate about some show and tells with me for those of you that are here in the audience. What I'm holding up right now is one of our, what I would call, raw NAND flash devices. You can barely see it. That's kind of the point. It's very thin, less than a couple millimeters in terms of thickness. Inside of this package, there are sixteen 8 GB NAND flash devices. There's 128 GB of flash storage within this package, an amazing amount within here. Some customers can take this just as it is, use it in their systems quite effectively.
What I like about those three videos is you saw three examples of customers that are doing interesting things with our flash, some of which are capable of just taking our very simple raw NAND or more highly integrated solutions. There's another product that we make that's called ClearNAND, where we insert a controller in the same package. It physically looks the same. You wouldn't be able to tell the difference. What that ClearNAND controller does is it manages, takes care of all the issues associated with error correction on our flash. It's one notch up in terms of system-level integration that our customers can benefit from. Other customers need a more fully integrated solution, of course, like a client solid-state drive. Here's one of our client solid-state drives. As you can see, it's the exact same form factor as a magnetic hard disk drive.
Of course, it's a lot bigger than what I just showed. This one happens to be our C400 device. It's 256 GB. You can see that there's a lot of other value that's packaged around that flash that we're adding. The shipments for this have been going great. On the next slide here, show what has happened over the last five quarters. Not a lot of numbers on this slide, but you get the basic idea. Over the last five quarters, we've gone from about 1% of the client SSD market to about 10%. We've been working for several years on solid-state drives. We're up and we're rolling now, and now we're penetrating the market. Yet to come are some other interesting versions of that. For example, what I'm holding up right now is an mSATA version of an SSD. You can see right away a much smaller form factor.
It's going to find a nice place in laptops and some of the portable computing devices that are coming out. Other companies use other form factors for solid-state drives. This is frequently referred to as a gumstick, and you can see that this is yet another form factor for a client SSD. There's a tremendous amount of variability, a tremendous amount of variation, a big opportunity to differentiate in this space. The other thing I'm holding up here, and I'll talk more about this in detail, this is one of the exciting products that we just announced this year. This is our PCIe card, NAND flash-based PCIe card. As you can tell, just looking at it visually, it looks a lot like something you would see inside a server or a computer, and that's exactly what it does. Even more value wrapped around our flash on this device.
I'm particularly proud of this device because I think this best illustrates what Micron has created and we're delivering to the market today. Not only do we make the NAND flash devices, we also, it's our controller. A lot of people out there are not convinced that we've got the controller expertise required. I'll show you some of the specs on this device later that should put that question to rest. The components, we do all the manufacturing on this. From end to end, this is truly our product. We're very proud of it. I think this is a glimpse of what you'll see from us in the future. We deliver solutions at multiple levels of integration, and that's what's going to be required to win in this space of interesting products in and around the cloud.
Of course, it's not just about client solid-state drives, as a lot of you know. This is an updated version of the slide that we had shown at the conference in Arizona six months or so ago. As you can see, there hasn't been any change in the upper left-hand graph here from a qualitative perspective. No surprise, client SSDs are still expected to outship enterprise SSDs in terms of units. If you move to the lower left and you look at that same story from a revenue picture, you see a different view of things. Obviously, there's more value being added to the enterprise SSD solutions. As a result, the revenue opportunity is comparable. Obviously, that's an area that we've set our sights on. I'll share more about that later.
On the far right, you also see from a price per gigabyte perspective what we're seeing in terms of the uplift for these enterprise-based solutions. If you go over here to 2011, what we continue to see is a nice uplift for enterprise SSDs over client, about a 4x improvement. We expect that to continue out in time. I thought I would put together one slide that would really give you a good visual feel for where we've been with SSDs at Micron and where we're going. What are shown here in the three regions are where we've been, what SSDs we have had in production and have delivered that 10x growth that I'd shown earlier. As you move to the right, it shows more of what you can expect from us.
So far to date, the P300, the C300 are both SATA-based drives for enterprise and for client, and our recently introduced C400 SATA drive, which is based on our 25 nm flash shown there in blue. Those have really been the workhorses to date that have allowed us to get up and running in manufacturing, get our core competencies dialed in. Over the last couple of years, we've had a lot of teams working in parallel to rapidly proliferate these product lines around our SATA-based client products. At the bottom, I had shown you a sample of our mSATA offering, which was a nice, fast, efficient derivative from our C400 drive. We also plan to announce sometime later this year a self-encrypting drive for clients, which is a nice feature that a lot of our customers have been asking for.
On the enterprise vector above, our P300 SATA drive, we will be offering a 25 nm version of that shown in blue. Visually, you get a nice feel with what we're doing with the NAND lithographies and our fully integrated solid-state drive solutions. You see as we progress from the purple 34 nm to the blue 25 nm and ultimately the yellow shown there in 20 nm. We have mentioned this publicly before, but we'd like to be much more clear about it that in enterprise, we know it's not just about the SATA interface. We know that SaaS is very important. We have some very exciting things that we'll be announcing in the near future on SaaS. We'll be talking about a 6 gig per second interface as well as 12, as we've done with other introductions on the SATA drives.
You can expect to see leading-edge performance from us on the SaaS versions that we plan to announce. I just talked about our PCIe solution. As you can see, as you move to the right, in addition to the single-level cell version that we're offering today with our Gen 2, we'll also be offering a multi-level cell version. It is a very nice product portfolio that is now emerging that you'll be seeing more from us in the future. We're very proud of the work that we've done there today. I'd like to speak a little bit more to the features and the specifics of our P320 drive. Again, this is our PCIe interface for a server-side enterprise storage. The thing to think about on server-side SSDs is IOPS as well as latency. I'll speak to the latency piece here first.
It's very fast to access the NAND in a caching application, which is what this is designed to do. Our specs that are out there, our spec sheet says less than 50 microseconds, but in some cases, we can achieve much faster depending on the exact usage conditions. Sometimes it's faster down to 17 microseconds. There is a range of latencies that you'll see. They're all fast. They're all significantly faster than SAS or SATA hard disk drives, which are orders of magnitude faster than some of the other options that customers have available to them today. The other story is also on the IOPS. I'll skip this slide. I'm just going to talk a little bit about the importance of benchmarking at Micron. We are very proud of the way that we're setting our specs. We think it's based on real-world usage conditions.
When we compare our specs that are out there versus the other PCIe providers that are out there, some of which, by the way, are our customers, you can see that we have leading-edge performance from both a random read and a random write perspective. The point here is not for us to show that we are significantly better than some of the other folks that are providing solutions in this space. These are all great solutions. Some of these are our customers, and we're very excited about the disruptive nature of PCIe interface solid-state drives for cloud computing. Between what we're delivering and the customers that we're working with that also deliver these drives, it's absolutely changing what's happening in the cloud today. In conclusion, I also wanted to provide a little glimpse.
I know I'm talking to a lot of people here that also are interested in where Micron's revenue and margins are going to be coming from in the future. Very happy to share with you where we see things going. What we're showing here over the 2011- 2015 period is where the revenue has been going and where we see it going in the future. As you look to the far left of this graph, you see that the vast majority of the revenue for the NAND Solutions Group within Micron was going to large OEMs. It was going to the channel, and it was also going to USB and cards, especially through our own retail channel, our Lexar brand. Those are still good businesses for us.
As we move to the right here, we're going to see our participation in the cloud and in and around the cloud with the client devices associated with it in a much, much larger way. We'll get to the point where well over half of the revenue for this business unit Micron is directly going toward those types of customers. We're very excited about that because, as I shared with you, there's a lot of value that's wrapped around the NAND flash there. We're uniquely positioned to deliver some of that value because we understand better than anybody else how our NAND technology works. As NAND scaling progresses, that expertise is going to be one of the key things that differentiates us from some of the other providers that are out there. With that, that's basically the NAND Solutions Group.
At that point, I'll go ahead and turn it over to Tom.
Super. Thanks, Glen . Is this working? Okay. Great. Good morning. I'm going to spend the next few minutes giving an overview of what's happening in the embedded market and what we're doing within the Embedded Solutions Group. Give an update on the market, the growth opportunities from both a segment and a product perspective. The fact is the embedded market is a relatively more stable, relatively higher margin opportunity compared to many of the other segments in memory. I'll talk a little bit about some of the peculiar specific needs of certain segments that contribute to that greater stability and higher margin opportunity and some of the things that Micron is doing to address those. Talk about a couple specific growth opportunities. One, building on some of the comments that Steve and Glen have made with the growth in NAND and in solid-state storage.
The other, a more product-specific example. I'll close by talking about how in addressing one of the particular needs of many of the embedded segments, that being longevity, in addition to doing a better job delighting our OEM and chipset partners, we're also going to extend the useful life and optimize the utilization of Micron's manufacturing asset. Okay. Just starting at a very high level, overall market opportunity in 2012, about $7.8 billion. We see a growth rate between 2011 and 2014 of about 8%. I talked about what contributes to the stability and the margin opportunity for embedded. One of them is diversity, diversity across market segments, across technology requirements, across a very broad customer base, as well as some other particular requirements I'll talk about later. I'm going to say more about the segment opportunity in a coming slide. I'll only point out IMM.
Steve talked about industrial. IMM stands for industrial and multi-market, where multi-market is the convenient way to say everything else. Taking a look at the technology split, today the market opportunity is relatively evenly balanced between NAND, NOR, and DRAM. However, the growth rates vary quite a bit. The strongest growth is in NAND. Again, some of the growth that Steve and Glen talked about, and I'll detail that in a little bit, low teens growth there. DRAM very slightly exceeding the 8% growth we see in the broader market. The NOR market is essentially flat at about $2.5 billion. However, within that market, it's a very different story between something called serial or SPI NOR, which is growing in the mid-teens, and parallel NOR, which is declining in the high single digits.
I'll talk a little bit about some of the things that we're doing to take advantage of that growth in the SPI NOR marketplace. Now let's shift gears from the technology perspective and talk a little bit more from a segment perspective. Again, overall growth in the market is 8%. If we look at the markets, including automotive, IMM, and personal systems and servers, those are growing roughly at the same rates as the overall market. Consumer, again, driven by some NAND, in particular eMMC opportunities, is growing a little bit faster. Networking storage coming in a little bit lower. From a margin opportunity perspective, if we look at this, these are actually ranked bottom to top from highest margin opportunity to the lowest opportunity from a margin perspective.
Automotive, IMM, and networking and storage are all above the ESG average, which has been contributing low 20s in terms of operating profit margins over the last couple of quarters. While consumer and personal systems are below that average, there are certainly still attractive margin opportunities for the company. From a share perspective, we're on a run rate of about $1 billion over the last couple of quarters. If we look at that versus the little bit less than $7 billion of opportunity in 2011, that's a mid-teens overall share. If we look at where we sit, we're well above that mid-teens average in automotive. We're a bit above in networking and storage, a bit below in IMM and consumer, and substantially below in personal systems and server.
Although as we ramp our 65 nm SPI parts, which service the PC BIOS, which is the major opportunity here, we do see a good growth opportunity. Beyond some of the more specific share growth opportunities that I'm going to talk about in some further slides, there is a general trend that we've seen in the best margin opportunity segments, that being automotive, IMM, and networking. Those are the customers that place the greatest value on the stability, the predictability, and the breadth of relationship and where we're seeing the greatest uptake in terms of the value proposition of our broad offering. We're seeing customers where we may have been very deeply engaged in DRAM, and we're seeing significant design activity on the NOR, the NAND side, or vice versa. We may have had a very deep NOR relationship, and we're extending that into DRAM.
The final comment on share, from the first slide, you see that IMM is a many customer. It's responsible for the vast majority of the customers in that 50 through 5,000. It really is a channel play. We've continued to invest, working with Mark Adams and his team on the rep and the distributor network on those programs. I think we're building a significant advantage versus some of our bigger competitors who just don't focus on the needs of those smaller customers as well. We think that will also contribute to our share opportunity in IMM. I'm going to switch gears and talk a little bit about some of those unique requirements that exist in the embedded world and some of the things Micron is doing to address them and take advantage of market growth opportunities. I'm going to focus today on some of those requirements in automotive.
Probably the first thing that many people think of in terms of a unique requirement in automotive is longevity. That's certainly important. I'm going to talk about that. It's actually a lot more than that. There are things like very specific product specification requirements, a specification that I won't bore you with called AEC-Q100. Very stringent quality requirements. They expect single part per million quality. They expect that quality at the ramp of the vehicle through something called safe launch. They expect very quick 48-hour initial response when those failures do occur. They have very specific documentation requirements, very stringent logistics. One day early, no days late is about as much flexibility as we get. They even look into the business processes that their suppliers are using to drive their business through something called an ISO/TF specification, which we now have underway.
We have a two-year roadmap to get implemented, which the automotive customers are taking as a very strong indication of our continued commitment to this marketplace. Now back to longevity. Typically, we will start engaging at least two years in advance on design, two years before the ramp of a vehicle. From the time that we do ramp, it can be up to 10 years that we need to be providing a fit, form, and function equivalent product to do that. From a change perspective, the requirements are also quite extreme. It will typically take anywhere from two to four quarters for one of our automotive electronics customers to requalify our component. An automotive manufacturer will typically give a subsystem supplier a one to two-week window each year for any given range of models in which to provide a change.
It is a very lengthy and very expensive process, which again favors the ability to provide longevity and stability. What is Micron doing about meeting these needs? I've talked about some of the non-longevity needs. One of the things that we've launched since our last gathering in Arizona in February is something we refer to as the Product Longevity Program. What is it? It is a 10-year commitment to provide fit, form, and function equivalent products. It's not the same technology node necessarily, but if we do shrink a part, we commit that it is backwards compatible and will give a two-year window in which the customer can requalify.
It is targeted, of course, at automotive, but also at industrial and medical applications and really designed to provide a safe set of choices that those chipset partners and customers can make, knowing that they won't get disrupted by an unexpected end of life. Why is this important? I've talked about some of the challenges of change in automotive. We hear from some of our networking and telecom customers that a requalification at a telecom provider of a piece of network gear can cost $0.25 million-$0.5 million . There can be extremely high regulatory barriers to any change in something like a medical device.
Because of that, this has been extremely well received, both by our chipset providers that are often making choices as to which memory components to put on their reference designs, which are very often adopted by OEM customers, as well as by the OEM customers themselves. I've talked a little bit about one area of unique requirements. Let's talk about a couple examples of growth. I'm going to build on some of the general NAND bit growth discussions that Steve led off with and certainly Glen built on by talking about an example from the automotive world. In this case, it's the automotive navigation and infotainment system. If we look back to the very initial navigation systems a bit over 10 years ago, they were a single-purpose navigation system with relatively modest memory needs, under 0.5 GB of memory. They represented about 5%.
The memory was about 5% of the bill of material. If we look out at high-end, these are probably going to be model year 2013 infotainment systems. They have really morphed to a general-purpose applications-enabled platform where we're seeing up to 64 GB of NAND and 4 GB of RAM, equivalent with what you're seeing in a high-end tablet. Why is that? It really is a battle by the automotive manufacturers to capture value that would otherwise go to makers of devices like TomToms and iPads. They want to do everything that they can to capture that value in the cost of the automobile and not have it go to third-party manufacturers. This value capture is actually happening in other embedded devices as well.
If you look at digital TVs, again, if you look back a little over 10 years ago, those were maybe 32 Mb of NOR and 32 MB of DRAM. That represented a single-digit percentage of the bill of material. The smart TVs of today have upwards of 5 GB of NAND and DRAM, and it represents over 1/5 of the bill of material. Again, it's about value capture. The DTV guys are fighting with the cable operators and the set-top box manufacturers, as well as the builders of devices like iPads, and trying to capture value. One of the ways they do that is to convert to, again, an applications-enabled general-purpose platform. That has very good, it's a very good opportunity for Micron. Beyond the general platform opportunities, there are also a few more specific ones.
One that we're focused on nearer term in the gaming world, game cartridges that have traditionally been ROM-based are migrating to managed NAND. Again, another good opportunity for growth. You can see what we see as the overall, this is millions of gigabytes growth in the embedded world over time. Our initial focus is, again, on gaming and automotive. Going forward, we'll be expanding that into IMM, consumer, and networking. Final comment on this opportunity. Because these managed NAND opportunities that Glen described place a controller in between the chipset and the raw NAND, we're able to be a little bit more aggressive about the technology that we use and migrate the NAND technology a little bit faster because we can hide the complexities of the evolution of the technology node behind this controller. It's like the best of both worlds.
Meet the needs of embedded and do a better job leveraging the leading-edge technology from Micron. A second growth opportunity I want to talk about is a little bit more product-oriented. I said at the beginning that we saw the NOR market overall being flat. However, within that, a very strong shift towards serial. Now, why is that? A traditional parallel NOR has 48 pins to talk to the chipset. A so-called serial NOR has four. That means the die is smaller, the package is cheaper, the PC board is less expensive, and the chipset is less expensive. There is a slow inexorable march towards SPI as a percentage of the NOR market. In particular, as advanced technologies are beginning to enable higher densities of SPI, the growth within that is in the higher densities.
In fact, between 2011 and 2014, virtually all of the growth in SPI is coming at densities at or above 128. To address that, we're announcing this week the world's highest density SPI products up to 1 Gb in density with the highest performance interface from a clock perspective and read performance. Very importantly, consistency from a hardware and a software footprint perspective across densities. While this is at 65 across technology nodes, as we migrate to 45 nm in the future, we will maintain that compatibility. We see very significant opportunities across the full spectrum of embedded markets to leverage growth with this new product offering. The final thing I wanted to close on was how, in meeting one of the unique needs in embedded, that of longevity, we also do a good job of leveraging and extending the manufacturing assets that Micron puts in place.
This shows one example. It's our 34 nm NAND and looks at how the revenue ramp is split across various business units. Glen's group is, of course, the first to ramp in storage removable PMP and ramps very quickly. Over a three or four-year period, it's moving on to the next technology node. In the wireless space, it's a little bit slower to ramp and to qualify. Over a slightly longer period, they also are ramping down. We're a good five years in until we're really getting to peak revenue. By that time, depreciation has substantially rolled off. While we certainly don't utilize the full footprint that got put in place originally, there's a very healthy footprint of low depreciation capacity requiring minimal incremental capital investment, yet still providing very attractive returns. From an asset utilization and asset return perspective, it's a very good play for Micron.
Going forward, we're going to keep focusing on longevity and the other unique needs to take advantage of the growth opportunities, contribute a growing, and we believe better than average both margin and stability stream to Micron financial network and do it in a way that takes good advantage of the assets in place, extend their use life in a very profitable way. With that, let's turn things over to Mario, who's going to talk about the wireless business.
Thank you, Tom. Okay. Good morning. I will start the presentation just summarizing some of the major trends shaping the wireless market. We basically are in a market which has been growing for several years in a row, and even if at a lower pace, it's still continuing to grow this year. The growth is basically driven by smartphone and tablets, which are the most successful application of the wireless technology appearing recently in the market. The convergence is the factor which is shaping the growth and driving the growth. We certainly want to be able to be connected while we're moving around. We want to be able, while we are changing our place, to take care of our personal things as well as taking care of our business activities. This is the convergence of multiple technologies which is enabling us to do so.
The traditional market, which was started from telecom players, which was just communication, has translated into a more and more complex market environment in which multiple technologies are playing a role to determine the evolution of the application. Of course, this is driving a lot of changes in the ecosystem, as I will show after, attracting many other players that have been not present there. Many of them, by the way, coming from the PC market and the P Experience, attracted by the evolution, which is making the application more and more like a PC rather than just a telephone. Within that rapidly changing environment, vertical integration with alliances taking place, acquisition taking place is a common experience. Many things have been happening in the last several months.
Just to mention a few cases, we know about the Nokia case merging from the technical perspective with Microsoft to adopt for the next generation smartphone, the Windows 7, Windows 8 mobile. Even more recently, the Google acquisition of Motorola Mobile, which is basically changing the perspective for the Android operating system. Going more quantitatively on the market dimension, we see on this left side the segmentation of the market. There is a full range of applications coming from the very low-end entry phones, which are typically characterized by a phone, which is maybe in the range of $25 - $30. Moving up in the scale up to the level of the smartphone, the upper end of which are characterized by a phone, which is in the range of $120, $150 in a phone, and the tablet, which is even positioned beyond that.
Beyond the growth in terms of volume, which is very significant in the coming years because we see the market moving from around 2 billion terminals up to the level of 2.5 billion, 2.7 billion terminals, all in all included. We're just not talking about phone only. We're talking about all the wireless applications, including, for instance, applications like the machine-to-machine communication, which is a wireless communication using the GSM technology. All in all, this is a global market dealing with wireless communication. In combination to the growth, we have the average memory content growth, which is a kind of doubling in the [parcel minus] every 18 months. I will comment a little bit more in the coming charts what is driving that growth.
The conclusive point is that thanks to the combination of the volume growth and the memory content growth, we see a dollar market, which is growing very rapidly. We are today in the $12 billion, $13 billion market size. The expectation is if the trend continues to be the one, we see to have a doubling of that market size in the next three, four years, basically. Switching to another subject, what I want to show here is a confrontation between what is the situation in a mature segment like the PC segment versus what is the fragmentation and the complexity of the wireless market of today. The PC market has gone through many years of changes and changes, adjustment, acquisition, merger, etc., reaching this point of today in which basically there are a few players in the operating system, just a couple of operating systems, actually.
There are only two providers supporting the intelligence of the motherboard. We have a few manufacturers left into the global world market. Of course, the price for that is that there is very little differentiation. You can choose one PC or another PC, you're getting plus or minus same performance. The only differentiation part might be in the service area, how the PC is supported, how the service overall structure in the world is available. In terms of performance, you basically get the same performance. Completely different is the situation in the wireless market. We're still in a very young market, which has been undergone many transformations in the past years, but a lot is going to happen also in the future. We have many operating systems contributing to the market. Some of them are proprietary operating systems. Several others are open systems.
Overall, it's a crowded market in which each operator in that area is either focusing on a specific segment or maybe multiple segments as well. In association to the operating system, there is a multiple supply of chipset. Again, we have several, I would say the majority of the company playing in the ASIC area trying to be engaged in the chipset area. Some are, of course, in a strong position as a leader. Just to mention one, Qualcomm, which is a global player as a chipset manufacturer in many segments of the market. Some are more focused on a specific part of the market. For instance, Infineon is focused with a large priority in the entry-level low-end portion of the market. The same applies to MTK. ST is a mix. ST- Ericsson is in a mix and mode.
It's serving the entry-level market, but also supporting the media processor part for the smartphone area, and so on and so forth. There is a multiplicity offering in the chipset area for the various applications. The main players in the manufacturing and sales organization are still a large number. The ones dominating the majority of the market are probably less than 10. You can recognize the names there: Nokia, Apple, Motorola, Sony Ericsson, Samsung, LG. All those players together are basically accounting for probably 80%, 85% of the total market. In combination with that, there is a large variety of suppliers, small or medium, which are particular in the Asia part of the world and China in particular, which are participating in that market, sometimes creating also disruption in the market through unreliable offering or price disruption, etc.
Overall, a kind of evolutionary market, very fragmented, which is distant from a stability in which it will be eventually achieved through the time. Another point to mention is that the carrier in that market are playing a very important role in the sense that they are really determining the quality of the demand, what kind of services they want to provide through the network, and therefore, what kind of performance and features they need to have from the smartphone or from the cell phone in general. This is a unique situation whereby the carriers are a very key part of the ecosystem determining the requirements, determining the architecture of the solution that we are providing to the market. Just a few more details to indicate how those things are happening in the various parts of the ecosystem.
If we talk about the operating system, clearly, the operating system is dictating the overall requirement in terms of memory size and performance. The bandwidth, for instance, is very much linked to the operating system. The amount of memory that you require is linked to the amount of memory that the operating system requires for itself to be working properly, but also to the kind of functionality the system is generating. Therefore, how much memory is required to support all that functionality. If we go on the chipset, there are similar requirements on top of that. There are additional contributions that are coming from them. For instance, the interface between the memory and the chipset. You can have a serial interface. You can have a parallel interface. You can have an EMMC interface, and so on and so forth.
This kind of way of activating the memory through the chipset is coming from the chipset makers directly. Also, the packaging requirements. For instance, is the chipset required to have the DRAM mounted as a package-on-package on top of the chipset to maximize the performance? If this is the requirement, you need to develop a package, a POP package, which is responding to the chipset maker specification. Also, based on that, the signal integrity, the thermal requirements, all that is really coming from the original specification agreed upon with the chipset vendor. The customer also is contributing upfront in defining the performance of the basic terminal they want to develop. Also, they're contributing to the definition of the package requirement. Are they having the architecture based on a standalone solution? Are they having the architecture based on a stacked multi-chip package solution? What is the ball-out requirements?
What is the footprint requirements? All that is really something which is coming from the customer. As I said before, also the carriers are contributing upfront in the definition of the global architecture and the global functionality of the phone. All that is just to mention that in order to be successful in that market, there is a real need to be able to manage this complexity and to be able to interface with all those players in the ecosystem environment. This is one of the major strengths Micron has. Thanks to our many years of experience in that area, we have developed through time strong links with OEMs. We have developed through times a strong partnership with the people developing chipset.
We are starting working together with some of the major carriers, particularly in areas like Japan, for instance, where the carriers are in reality determining the system architecture by themselves, and so on and so forth. This is a complexity on which we can capitalize using our competence and our long-lasting relationship with many of the players actively working in this market. Just to show in a graphic way what is the difference. This is just a commercial product. It's not specifically referring Micron itself. This is a Nokia product, which is a typical cellular phone architecture, while this is one high-end smartphone architecture. It's not unique, but one of the most frequently adopted architectures.
As we can see, in this case, we are talking about a very simple board with very few components and one processor, which is basically managing all the functionality of the phone itself, from the voice to the few features that are embedded in the phone. For instance, the camera features or the messaging features, all these kinds of basic features which are part of the phone. You see that we have a very simple memory content there. We have just a stacked package composed by a medium-range NOR density. 512 Mb NOR density is a kind of average density adopted today in this kind of application, combined with a pseudostatic low-density run. We're talking about a few dollars kind of a combination in a phone where the BOM, as I mentioned before, may be in the $25, $30, maybe $35 range. Very different is this picture.
Of course, between this and that, there is a full variety of solutions which are taking advantage of the multiplicity of the offering that we are making to the market. This is a much more complex board. This is more like a motherboard of a PC, actually. It's not the same complexity, but it's approaching that level of complexity. If we look into the architecture, we see that instead of having one processor, we have two processors. One is managing the basic feature of the phone, again, similar to that, the modern part, the communication part, etc. On top of that, we have a second and more important processor, which is the media processor, which is basically managing all the applications that a smartphone is providing to the users. Of course, to be able to offer that capability linked to it, there is a very significant amount of memory.
This is indicated here as a managed NAND EMMC. I think you're hearing many of us talking about the managed NAND. Certainly, managed NAND is the biggest perspective of the storage capabilities nowadays in several applications. We're using here an EMMC, which is a managed NAND. Basically, it is a basic NAND with a controller which is managing the feature of the NAND itself and the performance of the NAND itself with an embedded multimedia interface to the processor.
Of course, to exploit that capability, there is also the need for a significant amount of mobile RAM. In this case, we're talking about 6 Gb memory, DDR2 memory. Actually, in that type of high-end application, the range of memory is moving from the 4 Gb up to the 8 Gb density. That's the typical range we are seeing there. While the eMMC density we're talking about in this case is an 8 GB, the typical range is moving up today to the level of 32 GB. The next generation, more in the 64 GB density. This is the reason why we see, on top of the growth in volume, a big growth in terms of memory consumption, therefore a dollar value of the market. Why Micron is strongly positioned in that market to be very successful in the market itself?
First of all, because we have the competence in general. Beyond that, we have the widest product range in the market. As you heard also in the previous meetings, we have the full range of products based on our technology, including the parallel interface and the serial interface product. We have a full range of products, SLC and MLC, in the NAND technology. We have a full range of mobile RAM, ranging from 512 Mb up to the 4 Gb density. We are combining all that to generate a multiplicity of solutions which are supporting the different needs of the different applications. This is the major strength Micron has compared to any other competitor in the market.
I should say that as part of the product offering, even if it's a little bit premature, we are almost at the point to start introducing the market phase change technology-based products, which will be complementing in the medium-low density range the new offering of today. We have one of our major strengths in the global partnership. I mentioned before that thanks to our long-time experience, we have a complete network of relationships on which we can capitalize and build our success story. Of course, again, we are leading in technology with a combination of technology. You will hear from Mark Durcan more comments related to that. Overall, we are capitalizing on all those factors. We are gaining positioning. We are the number one by many since many years in the new environment and the new offering.
We are working hard to become the number one on the rest of the market, which is requiring different offerings, as I was mentioning before. We started to be very successful. Our products are designed in a large variety of smartphones. The 190 number should not be very impressive in the sense that this is not a different architecture. This is different models. As you may know, the OEM are introducing on a basic platform tens of different models with a little differentiation, one versus the other. Overall, we are designing in many different architectural platforms, which are generating tens and tens of different models introduced into the market.
We are starting to be successful in the upper end of the market with tablets and e-books versions in many parts of the country, particularly in China, which is one of the areas which is much, much active in that area as well. To conclude, I think we have proven to be a very successful player in the market through our many years of history. We are today in the presence of more than 550 million phones using our memory products. We are expanding our bases on smartphones as well. As I already described, we are leveraging all our key strengths, which are product technology and ecosystem relationships, to build a successful story for Micron and to contribute in a strong way to the success of Micron, to the profitability of Micron, which is a very important part of the global game. Thank you.
Now I will pass to Brian Shirley, which will go through the DRAM part of the presentation. Thank you.
Yeah, thanks, Mario. Good, thank you. Okay. Good morning to everyone. For those of you that I haven't met, my name is Brian Shirley. I head up what we call the DRAM Solutions Group here at Micron. We are focused really with our computing DRAM portfolio on a variety of applications here. The way we think about this is really centric, starting with the core infrastructure: servers, storage. We'll talk a little bit about cloud computing as well. Moving out through the edge, talking specifically here about the networking gear, everything from IP routers, switches, backhaul capability, as well as infrastructure all the way to the premise, DSL gear, set-top boxes that help make this entire computing infrastructure work. I want to talk to you a little bit this morning about some of the trends we're seeing out there.
This is a brief update from some of the trends that we spoke about in Scottsdale back in February. I'll give you a little bit of market commentary as well. I know Mark Adams can speak as well during the Q&A. Server, you know I think it's fair to say we're not seeing a big slowdown here. What we are seeing is a different partitioning happening in this space where there is a move, a little bit of what I would call softening of the server resellers, the traditional developers of server systems, to more of a direct model. In general, that's something that's pretty favorable to a company like Micron. We're selling a lot of memory direct applications these days, companies that are using that memory specifically for their own server usage.
That's a level of innovation as well as, frankly, call it a removal of the middleman that's beneficial to a company like Micron. Cloud computing, we'll speak more about this. It is real. It's happening. It's significant growth in this overall server and storage space. I would tell you that what we're seeing from the virtualization side, cloud and virtualization generally means more cores per system. More cores per system means a lot more memory. Our shipped standard module density into the server space now is north of 8 GB. That's been a pretty significant move up. We're shipping an awful lot of 16 GB and even 32 GB modules into this space. Networking and storage, fair to say there hasn't been much of a slowdown here either. This is a space that's been very, very good to Micron.
You know what I would say interestingly here, traditionally, we have focused really on what I'd call the high-performance aspects of this space, the infrastructure networking. With our increased 300 mm capacity, a whole bunch of shrinks that we executed on 50 nm products that we moved off of 200 mm, we are now participating in what I'd call the lower-end segment of this space, generally the core customer premise gear. This is DSL boxes, for instance, moving into the home. What's notable in this space, as we're doing an awful lot of product development in these upper-end systems, is that our competition is not necessarily so much the other DRAM developers as it has been in the past.
What we're finding is because of the logic requirements in this space, the very, very high speeds, we're increasingly finding that our primary competition are logic vendors, companies that happen to be good at high-speed SerDes links, for instance. Frankly, Micron competes very well there. When you have the memory technology, obviously, you're not having to use some kind of an embedded DRAM process. With our in-house logic expertise, we're finding more and more of these design wins moving to Micron. graphics and consumer, fair to say a little bit of a slowdown here, specifically in the DTV segment. I'll speak more about what's happening in game consoles as well. A pretty good push for more memory coming up in the game console segment as a level of redesigns will start to hit us here over the next couple of years.
DTV, the memory requirements continue to go up, just a little bit soft in that market right now. Personal computing, certainly soft out there. I don't think that's news. What that hides is a pretty good space for innovation here that's giving companies like Micron, with a focus on low power, an opportunity for tablet, thin and light participation, frankly, using some opportunities to reduce power with new architectures. In this space, I'll also say that with some of the current market weakness, we have moved relatively recently quickly up to a shipped module density of 4 GB in this space. Elasticity is still working. We're seeing some favorable trends in that sense. All in all, we like how the portfolio is positioned across these four key segments that we spread our computing DRAM portfolio across.
Now, specifically talking about the cloud, what we've done here is on the left-hand side, giving you an overview of really what things look like directionally for the shipped application of memory. This is really how memory is making it out to the systems out there, divided up between the public cloud and traditional enterprise computing. We've further broken out the public cloud between really what we call platform as a service, software as a service, and traditional infrastructure as a service, various forms of cloud computing, and how those applications make it out there. In the enterprise computing space, really our traditional segment there focused on upper-end servers for high-performance computing and some level of IT infrastructure that is considered the cloud, although really more private cloud usage. The key thing here is that in this space, with this growth, it's actually, I'd say, nontraditional memory usage.
Certainly very focused, as we point out, on this being a cost center. Quality and reliability matter. It's certainly fair to say that making sure that the CPU is operational all the time, meaning memory latencies, peak bandwidths, get the memory to the CPU, is very, very critical to reduce that total cost of ownership. Across the bottom, I'm showing you four technologies that are key to make sure that that happens, starting with load-reduced DIMM on the lower left. These are simply modules that allow us to get a lot more density into these servers, generally 32 GB and 64 GB modules. We then go to 3D stacking. This is actually stacking DRAM memory chips using through silicon via technology and buffers that we've placed in one of these DRAMs to take that density up a step further.
All of a sudden, you can now go to 64 GB and 128 GB type modules. This is real demand out there, driven by the cloud. XDIMMs really consider this flexible module form factors. There's a number of companies out there that, because of different blade and server form factors, are asking us to develop modules for them that have different profiles. This used to be really the province of companies, module companies. I won't go through them right now. Increasingly, the direct OEMs are coming to us saying, "Look, it's better if you just take your memory and get this module done for us directly." That's been good for us. Finally, something called hybrid memory cube, which we spoke about in February. I'll conclude with a picture of where that's at, but really an upper-end computing platform for high-end systems.
Now, briefly, back in February, we announced a product that we call Reduced Latency DRAM 3, RL3 for short. Micron is the world's primary supplier of something called RL2 to the networking space. Reduced latency in this context, meaning an upper-end computing DRAM memory optimized for networking. With our RL3, I just wanted to give you a brief update. Since February, we reached initial silicon on this. We got it sampled out to the market. Critically, we're working with a few companies here, of which Alcatel-Lucent is one of these. About a month and a half ago, Alcatel-Lucent released something called the 400G chipset. This is a 400 Gb Ethernet switch, a networking processor and chipset that's optimized for 400G, the world's first. You can't pull this off without RL3. We've got it.
This has been a huge win for us, a great chance to do some joint press with Alcatel-Lucent and show the value of an innovative product like RL3 in the networking space. Thin and light, really a category here in between tablet and traditional notebook, although I think some of these same trends apply to tablet as well. You know there's a lot happening here, both with the CPU vendors, the operating system vendors. The nice thing is that across memory, there's a level of innovation here that we're able to capitalize on. In particular, these are applications that require more DRAM than traditional cell phones. As of today, less memory than a typical notebook, although we're seeing those trends push pretty quickly, notably in this ultrabook space, to 4 Gb type loaded systems.
That means that generally, you have to go out with a different architecture than what LPDDR DRAM, in other words, traditional cell phone DRAM, has been optimized for. We're taking that trend and capitalizing on it by making sure that in our standard DRAM designs, we have the features, the low-power capability, and a way to test these parts for lower power that allow us to get out and really capitalize on some of the trends there. Some nice uptake, specifically in the thin and light segment. Talking about consumer again here, I thought it'd be beneficial to show you across a couple of key applications how this looks in terms of megabyte per system. On the left, what we have are game consoles. This is a space that's been pretty flat for a number of years in terms of the average shipped density per system.
That's going to be changing here pretty quickly. I think everyone realizes that these systems are somewhat clumpy in their development. The next generation of systems is under development now. That, because of 3D and some of the bandwidth requirements, drives the megabyte per console up fairly quickly. We're anticipating some good growth here. We've worked with a number of these vendors, specifically on both custom and semi-custom solutions in that space. In DTV, again, a little bit softer out there right now from a market segment, but some great growth overall that we see continuing because of 3D and the needs of these systems as they pull in internet connectivity that drives up that megabyte per box. Now, something that nearly every one of these segments has in common is a focus on power. Power in our space is very critical.
What we've done here is tried to put side by side measured silicon data across 30 nm, 2 Gb solutions. Micron on the left, compared to our two largest competitors in the middle and right column. Suffice to say, lower numbers are better here. These are measured current readings of the device in milliamps across a variety of operating conditions. I won't go through the minutiae. Suffice to say, these different IDD numbers correspond to different ways to access the memory that JEDEC, meaning our standard setting organization, has set out. Across the board, I think you can see that Micron, we've bolded the lowest number in green and the highest number in red. We're pretty pleased with how our 30 nm, 2 Gb solution stands out here. Power matters in these systems from a total cost of ownership, not just in servers, but also in consumer gear as well as desktop notebook.
Lower power is a key competitive advantage. We're pleased with how we're situated here against the competition. Lastly, we spoke in February. We rolled out something called hybrid memory cube. This is not 2011 technology, but it's something in development that we're working on now to get enabled in the industry for upper-end platforms. We're pretty pleased with this. What it is, again, as a reminder, a stack of Micron DRAM memory chips sitting on top of a logic device that we have designed. That's all connected with something called through- silicon vias. When you do that, you open up a level of bandwidth that is just simply unobtainable any other way. The next generation of high-performance computing, as well as, frankly, the upper-end networking gear, when they saw the solution, their eyes opened wide up. In the intervening months, we've been working on a large number of design wins.
Again, not 2011 technology. It takes some time to get this enabled because of, frankly, just the CPU changes that are necessary to take advantage of that bandwidth. When you do that, you get a level of performance that equals somewhere between 20 x- 25x the amount of peak bandwidth that you can get off of one high-end industry-standard DDR3 module today. I'm not just talking about an individual chip. I'm talking about the entire module, 20 x- 25x the bandwidth out of one single placement of these hybrid memory cubes. To that point, we've got a roadmap here. You'll be hearing more about each MC with some public forums coming up in the next month and some articles that'll be hitting the press soon. Very, very pleased with how this is going across the landscape.
This is our roadmap here, which gives a picture of the DRAM core component that gets stacked. We take four to eight of these chips, these 1, 4, or 8 Gb DRAM arrays, stack that on top of the memory for a total solution of anywhere between 4 GB and 8 GB. We have the SerDes links underneath and the packaging type. That Generation 3 up there, as we talk about, 320 GB per second out of one cube. That's, again, 25x the total bandwidth that you would get from an industry-standard high-end DDR3 module today. Very happy with how that's gone. In conclusion, I'd say that both from a segment perspective as well as today's product portfolio and finally looking at future innovation, we feel like we've got the products necessary to win in these key segments.
With that, I think we're going to go ahead and conclude the business unit section, take a 15-minute break, at which point Mark Durcan will come back and we'll go ahead and tear into operations. Thank you.
Fairly brief, we're a little bit behind schedule, but 15 minutes or so, and then get you back in here. We'll finish with some.
It's a little bit different story, as you might expect, because the growth rates are so much higher. Remember that we're sitting in here, and it's expected, by the way, when we get to the first quarter of 2013, that the wafer capacity in NAND in the world will exceed that of DRAM. That'll be the first time that that's happened. Here we clearly show growth rates in capacity, both in silicon and in technology advancement. I think, by the way, that's why the NAND will behave more like DRAM did in the earlier years, where it was very price elastic. In other words, we know right now that we're experiencing much more price elasticity in NAND than we are in DRAM, for all the reasons that the prior speakers touched upon.
If you look at what's happening with the capacity that exists in this space, first going to DRAM, there's a couple of things on here. One is the expected growth rate of the bit supply. The other is what is the source of that growth rate in the bar charts. Historically, I just want to point this out again, if you go back into the 2006, 2007, 2008 timeframe, when we were basically peaking in CapEx and when the market turned down, we had large amounts of the new capacity that was coming online in the form of a new wafer. Not only did you advance the technology and get more bits because you're using a more advanced technology, we built new wafers into the industry, and that caused these kind of bit growth rates.
If you look at what's happened out here, particularly since this 2009 time period, clearly there was some capacity that came offline. Everybody knows that. That capacity came online in 2010. If you look at what drove this 45%, 50% growth rate, it was either advancing the technology or it was bringing underutilized capacity back online. That's a far different picture than what you see here, which is why I'm actually a little surprised today that we have as much pressure in the DRAM business as we do. I always make the caveat that we can't predict the world economic climate. Clearly, given the weakness in Europe and given the weakness in the U.S., we're just, and by the way, the success of a couple of products like the iPad, which are drawing, it's good on the NAND business.
It makes it more negative on the DRAM because it doesn't have quite the DRAM content. You know, all those factors are playing into what's going on in the market. I'm a little surprised that it's as weak as it is in DRAM because when I look at the underlying data around capacity and supply, it just doesn't demonstrate the kind of new bits into the marketplace that we've experienced in the past to drive this kind of imbalance. I think that that's also a reason why it'll settle out fairly quickly and we won't have some kind of extended period of time where it's under the kind of pressure we're experiencing right now.
Now on the NAND side, what's also interesting, and I would not have really expected this, is that the capacity, the new wafer capacity, there is some, but it's also nothing like what was occurring in the prior periods of time. We are getting more bits into the marketplace based on new wafers coming in. Micron, as you heard, being one of them, with the IMF facility that we have in Singapore. As a percentage of the total capacity growth in terms of the bits, it's still dominated by advancing the technology as opposed to bringing the silicon. We're not in this environment where we have crazy amounts of CapEx being spent in the memory world. We're in an environment where we're just being much more subjected to the world demand, being somewhat weak, in obviously a couple of the major markets.
Now, my final slide, if you consider all the players in the memory business, and I like to show this slide. If any of you have heard me speak on this topic before, as really my final slide around what's going on in the industry, there are a couple of things that are worth pointing out. One is, we always talk about where we're at in relationship to Hynix and Samsung. Remember, this is a total memory perspective, and that's what we started doing a couple of years back, because of the product portfolio. It's really pretty amazing at the differences that are starting to occur as you go down this curve in terms of market share of the world memory market. We've said for some time that the model will continue to drive this to only having a few players that survive.
The pressure that's in the marketplace today, in particular in DRAM, will probably be a catalyst. The longer it exists like it is now, the more pressure, the more catalyst that will be in play in order to try to consolidate this industry a little bit further than it is right now. I don't need to speak, I think, I'll answer questions on it. I don't need to spend too much time speaking about what's going on in, you know, a couple of the countries in Asia. There's a lot of weakness out there, and many of these companies, in particular, some of the companies that are first to bottom of the chart, are in really bad shape. I think that something ultimately will have to happen there. It's a little bit uncertain as to how that plays out.
I think the current situation is pretty untenable in the DRAM business, and something must happen. At the end of the day, when you look at the product portfolios, there's only two companies, Micron and Samsung, that have the portfolio that we have. I think that companies will have to continue to evolve in order to survive in the kind of environment we're in right now where there's additional consolidation. Okay. With that, I'm going to wrap up. I'm going to open it up for questions, and I'd like all the rest of the team to come back up. I would stand instead of sit, but the height would be the same, so yeah.
Questions. By the way, it would be very helpful if you have a question that you can use the mic so that the people on the webcast can hear it too. Right here.
Thank you. Probably a couple of questions. Steve, can you start off by updating us on what you see as happening today in the PC market by way of demand going into back to school? I know the last conference call you talked about five weeks of inventory. Where are we now with that? Perhaps that might fix the question.
Yeah. Mark, do you want to—Mark's probably—do we need a hand mic ? I'll comment too, but Mark, why don't you go ahead and comment on where you see the PC market and what's happening there?
Generally, on the PC market, not a real shock in terms of the current state of lower demand than expected. We started to see that in July in the forecast into us from the major customers that play to that segment. We talk about the macroeconomic conditions. That's obviously a big driver of it. Certainly, alternative computing solutions around tablets and even smartphones, when you look at what the teenagers are doing with computing and on the go and what have you. We started to see significant shortfall of demand in the PC segment in July and from the bigger branded players. We continue to watch that dynamic as we look at the holiday season. Obviously, still the big numbers, but off the growth numbers that we thought going into the period.
Yeah. I think that's been confirmed now by a number of people that participate in the supply and into the PC market, whether it be Intel or others, that when we started out the year, I think a lot of people were talking about 15%. Now they're talking about 2% - 5% or something like that. That's what we see playing out right now.
Could you give some about the [shift to 4 GB] modules for PCs? How widespread is that? Is it, and by region, if you can just talk about what you're seeing. Obviously, the emerging market's been very strong, with China now being probably larger than the U.S. in terms of unit demand. Let me talk about regional mixes in terms of bit growth just for us to get a sense of how much runway there is for growth then.
Yeah. Brian.
Clearly in the desktop notebook space, we have seen average shipped densities from our calculations push north of 4 GB already. I think the latest figures are roughly 4.3 GB per shipped system, and that's prior to really some of the latest market weakness. Again, elasticity is starting to occur there. Our shipped module density has just pushed over really about the last three months up to a 4 GB average module. We're pleased with the content per box on the desktop notebook side. You know, in tablets and ultrabook, obviously, these have started out with lower content, but I think you'll see with some of the developing platforms coming out over the next year or two, a pretty strong push up to 1.5 GB type numbers in the tablet space on average. In the ultrabook space, somewhere between 2 GB- 4 GB.
We are pleased with the elasticity there, partially a function of the soft market, but by all accounts, there's still room to grow that.
Yeah. Maybe a question for either Ron or for Steve. You know, modeling the company historically has been extremely difficult. Now you've got this mix element that's coming into the fray, both intra-memory technologies and inter-memory technologies. How should we think about mix in in sort of any given quarter? Are you always going to try to maximize profitability within a quarter? How much control do you have over that, and what kind of guidance will you be giving us around mix going forward? I have a follow-up.
Yeah. Mix is always difficult to predict too far in the future because the market dynamics are changing. I think companies like us, and I think probably Samsung is in a similar situation, we don't always get to just optimize for profitability in a particular segment. As an example, if you think of a company like Hewlett- Packard, they buy product that goes into the PC business, and they buy product that goes into the service and some of their higher-end business. Most companies don't allow you to just participate in one and not the other. We're consistently under pressure if they have a broad business like that to supply the entire line of products that they need. We can't just say we're only going to serve product in the server business and otherwise. That is kind of one thing that affects mix.
The other thing that affects mix, of course, is the decision around which products to build that go to different markets that actually go to different customer base, different market segments. An example of that would be, are we going to build more RL product, you know, for the networking market as opposed to other product for some other market? Those are the, and the prior one, by the way, tends to be pretty consistent. At certain customers, we know we have certain percentages that we're expected to meet in their various categories with that particular customer. With respect to the market differences, those are pretty hard to predict. That mix changes a lot.
In fact, when I was showing the average ASP and the average cost, if you noted on that chart, it was really kind of the commodity spot market part and not reflective of our average ASP, because we have a much better portfolio. I think that one of the discussions now, about how do we help people understand the complexity of our financial model, outside of these types of discussions because it just takes more time, and we don't have that kind of time to go through it. We might try to look for another forum where Ron can spend time and actually go through how our financial models work, and how mix impacts us to help people understand it much better. Because we are pretty complex now, and we have enough segmentation, enough portfolio of data that it's just harder to grasp that.
Now, we'll never be able to tell you with precision ahead of time exactly what the mix is going to be because we're reacting to market. You know, we can affect that to some degree within a quarter or two. I think that's what, you know, how we're looking at it.
Steve, as my follow-up, you've always done a good job acquiring assets cheaply, especially in bad market environments. Per some of your capacity charts up there, the push to consolidation without a lot of wafer start growth doesn't seem to be as strong. Given your IP base, given what's going on with the mix strategy, given that it's starting to play out with more stable cash flows, why not look at your own stock as the cheapest asset out there to go acquire during this soft patch of the business?
Yeah. I think, let me try to answer that in a couple different ways. I think one point you're making is that the industry has been consolidating, and there are less and less cheap assets to buy. That has been a way Micron to be more effective in our capital deployment, primarily compared to Samsung, that's allowed us to grow more cost effectively than we might otherwise be able to do just through organics. As I noted, if you look at that chart that I showed you on my last slide, the number of companies that are out there where you can go acquire inexpensive assets that are of any kind of significance or scale are getting less and less. I think that's true. That means that it's not completely done, as I said.
I think there's another player or two to make there, but that also says that those kinds of opportunities are less and less. As those opportunities become less, as we generate more cash flow, then your follow-on comment is, what are you going to do with the cash? Why not, at certain times anyways, why not look at your stock as a cheap asset to buy? I've made the comment that as our share price trades below book value, we do tend to look at it in those ways. As you know, we've done some things historically.
Of course, our priority is to make sure the balance sheet's strong, to make sure our cash position's strong, and to make sure that we still have the necessary ability to invest in the company in terms of research and whatever things that we need to do to make sure that we have scale and competitiveness. Now, having said that, I also watch with interest the debate that occurs out on Wall Street about, I mean, in fact, not that anybody here bases what they do on Jim Cramer's comments, but, you know, it was interesting to listen to some people, including him, just rip CEOs and companies for doing stock buybacks, that they need to stick to do with what they do well, etcetera, etcetera.
My perspective is, the way I look at that is the same way I looked at opportunities for inexpensive assets, that there are times that it makes sense and there are times that it doesn't make sense. We're going to continue to look at it like that. I'm not disagreeing with you that there may be times where it will make sense to use your cash in order to reduce your shares outstanding, as opposed to other times. Those are kind of game time decisions you have to look at constantly as you're balancing capital needs with balance sheet preferences, with reducing our share count. I've said before, I think we're going to continue to look at that. If you look at the transaction that we did most recently, the nature that we did, we did it because we wanted it to be non-dilutive.
Now, somebody could have argued that we shouldn't have done the stock buyback simultaneously with that transaction. I could have waited had I known that our share price was going to be $5.50 instead of $7.50 or whatever. Sure. That wasn't the—I mean, we did want to make sure that people understood that we were very anti-dilutive in our thinking. In particular, I wanted to make sure that all of our shareholders understood that in that particular transaction, there are things and opportunities that may surface. We want to make sure we were in a little better position than we were then, to do it, which is why we raised the money. In addition to that, I wanted to make sure that people understood that we're very sensitive to dilution.
That's why we did the equivalent share buyback at the time so that you didn't have to—when I say trust me, we're intending to settle it in cash. I didn't want you to have to trust me. I wanted you to know that I was going to take the shares out right then such that in the event we settled in shares, we already covered it because we took those out of the market at the same time. I hear what you're saying. It's in our thought process all the time, and we'll just continue to evaluate it as we move forward. There was a question over here from earlier. Oh, okay. Go ahead.
Hello. Hi. This question's probably for Glen Hawk. You mentioned at the very beginning that flash was driving the cloud, and in particular cloud storage. With the emergence of cloud storage services such as Apple's new iCloud, and I think Amazon has a competing one, is it possible that these services could actually have a detrimental effect on NAND demand as average storage memory would be less for individual devices?
Yeah, good question. I love to talk to people about that very question quite a bit. I definitely have an opinion on it. You know, when I made the claim that flash was driving the cloud, I'm a flash memory guy, so of course that's how I'm going to look at it. I think on this question, as to, you know, where the storage is going to reside, I have a strong bias that says not only are you going to need a lot of storage and flash in the cloud itself, but I think that we're looking at a future where consumers are going to want to have a lot of that available right there at their fingertips because they're going to be able to do different things with that.
I think as time's gone on, we had a lot of fun talking recently about some of the opportunities, you know, what the future is going to look like. Just to call out one example here, there's a great website if you haven't seen it, davidbergman.net. He's an action photographer and videographer based out of New York, and he has a great website that gives you a glimpse of the kinds of things that you're going to see in the future that people are going to do when the next generation cloud and these next generation devices are available. What he did was he was asked in 2009 to photograph the Obama inaugural, so in January. He thought, wow, this is the first time that that swearing-in ceremony has been open to the public. They opened up the National Mall, brought in tens of thousands, hundreds of thousands of people.
I don't even know how many. He used the technology that he called Gigapan to essentially create an incredibly high resolution photograph of that scene. I think the image that he eventually came up with after using his desktop computer to crank through about six hours' worth of processing time, I think it ended up being like a 1,400 megapixel image. When you go to this website, you just see a nice photo of the inauguration. You think, okay, what's the big deal? You have the capability to zoom in and see individual faces. It is just phenomenal. Even though this took hours to produce and a lot of processing time, I think that's the kind of thing that you're going to see more of in the future. Interestingly enough, he didn't even know some of the moments that he captured with that image.
If you zoom in, later on, somebody discovered that one of the people in the audience happened to be Yo-Yo Ma. That's the famous cellist who was, of all things, caught taking a photo with his smartphone. I thought, how cool is that? I think that's a real vignette into the future. Just imagine when everybody has Gigapan-enabled smartphones walking around the planet. They're going to want to record that content, put it in the cloud. A lot of people are going to want to carry that with them. I think that my vision of the future is that the storage is going to be in both places. There are things that we can barely conceive of today that we're seeing people do today. It's really exciting. I'm bullish that there's still going to be a lot of storage in the clients.
Sorry for the long answer, and I'm pretty passionate about that.
No other question right here.
Thanks. Just one on the NAND side for a second. Clearly, we've seen a lot of growth in smartphones over the past couple years. If we see that continue to grow at that strong rate, one of the things you need to see is also some ASP declines to kind of get to the $150 and $100 price points. Just curious in terms of where you see the bill of materials pressure coming from. How much are you seeing in terms of the NAND embedded space? Where do you think, is there any pressure downward on the embedded content of NAND, beyond the 2x per 18 month that you talked about earlier, Mario?
I think that, I mentioned before, what is the partitioning, in terms of architecture choice for the different models. A couple of years ago, talking about cell phone, when we were talking about the boom with our partners, we were starting discussing about $100, maybe going down below $100, $90, $95. Today, in the low-end portion, as I mentioned, we have a boom which is in the probably $25, maybe $30. This is going to continue to go down, not at the same pace as before, but there is still the pressure from the competition in the market to decline that boom. This is happening for every category. Of course, what we have to exploit is the parallel growth of the density so that we will compensate the bit cost decline or gigabit cost decline with an increase of density that will be associated to the new application.
Overall, we see a kind of stability richer than the management of mix between gradual, continuous decline, technology migration, and density addition in both terms, in terms of non-volatile memory as well as volatile memory.
Maybe just as a follow-up, a broader question on NAND. You talked about the shift in your focus on NAND to more enterprise applications versus consumer. Can you just talk about if you had your druthers, would it be 100% enterprise and 0% consumer, or how do you think about the trade-off in that business?
Yeah. I don't think it would be 100% enterprise. I mean, that's certainly not the only segment that we're going after in a big way. I think that's one that you're starting to see us ramp into in a more direct way. What I see, Chris, in the future is we're looking to assemble a portfolio of segments that we're participating in. Enterprise is certainly a key part of that. I think that there's still going to be a lot of great business for a lot of those client devices that require affordable flash storage as well. We're going to go after all that. You know.
It's probably worth noting that whether or not it's in the DRAM space or whether or not it's in the NAND space or actually whether or not it's in the NOR space, the competitiveness, the margin that gets generated in some of the more attractive segments, is a direct derivative of your ability to compete in some of the more commoditized segments. In other words, what drives us for our relentless focus on cost is the fact that we have to be competitive at kind of mid and lower more commoditized segments, and that drives the margin. Somebody coming into the marketplace who doesn't have that kind of portfolio, who just wants to sell into the enterprise space, won't have near the margin that we'll have because of our drive in some of the more commoditized spaces.
Yeah. I should have added, you know, our entrance into client SSDs is a great example. You know, we ramped to about 10% of the market. What that enables us to do is to exercise our entire manufacturing chain, our supply line, really make sure that, you know, we've got that dialed in. One thing that you want to be careful of with enterprise customers, as with automotive and other customers, is that supply line continuity is something that's very, very important. That's something that we can provide by having, you know, both in our portfolio. I think we can address both really, really well.
Yeah, over here.
Two questions. First one for Mark. I just wanted to understand how fungible is between DRAM to NAND given the complexity of scaling going from, you know, 3x to 2x or 2x to 1x, over the next, say, 12-18 months. Can you give us some metrics in terms of your past, you know, transition versus what you expect or what you anticipate?
Sure.
I have a follow-up.
Okay. Relative to our ability to move capacity back and forth between NAND and DRAM, there is the ability to do that. We're doing some of that today. In the next quarter, you will see, from Micron, given the relative softness in the DRAM arena, some of our DRAM capacity in one fab in particular move into the NAND arena. It's not something you do at the snap of the fingers, and there can be inefficiency associated with it. We have flexibility at the margin to move small amounts of capacity. By small amounts, I mean thousands of wafers a week, not tens of thousands of wafers a week, from one node to, from one technology to the other. There's generally some slight inefficiency associated with that because you have a tool set that's optimized for one mix.
As you move to the other, you're going to give up a little bit. In certain situations, given varying demand profile, that makes sense. I think we're not different than our competitors. I think most companies find themselves in the same position that if you want to make a long-term transition, yes, a lot of that equipment is fungible, but it's not something that you can do very efficiently on a short-term or interim basis.
To follow up for Brian, how should we think about your specialty DRAM mix by the end of next year versus by the end of this year? Can you give us some kind of a metric there? What is Micron doing to improve the specialty DRAM mix? Thanks.
Certainly. In the DRAM Solutions Group space, even today, I think you're going to find, across server, network, and consumer, we are sitting at over 50% of our revenue being specialty DRAM today. That's just for the DRAM Solutions Group. We have room to continue to grow that. Generally, that's coming with improved performance at, you know, things that we're doing on the supply side to take up the amount of server-grade material. Suffice to say, we are at a point where we don't see the demand for those products being the limiter that it once was. We've got room to grow that. Where we end up at the end of fiscal year 2012, I'm not going to comment.
I'll just say that that's specifically still our focus to drive as much into the server and networking space, consumer as well, profitable consumer opportunities like game consoles, DTV, as we do. We're pleased with that percentage.
For Glen, on the DRAM, obviously the demand mix that you've got, are you still planning on competing or providing TLC in a significant amount? Will that be more managed TLC, managed NAND, versus more in the EMLC area?
Okay. Just to clarify, three-level cell or managed NAND for?
Three-level cell, and then it will be incorporated in managed NAND.
Okay. Yeah. You know, we do have three-level cell products today on our 25 nm . We don't have to run a lot of them today because the segments that we're engaged with, the customers that we're dealing with, that's not a product that's high on their priority list. You know, we're running multi-level cell and single-level cell flash for the most part, but we've got three-level cell there. If the environment changes to where we need to run more of that, we certainly will. With regards to the managed NAND question, I'm not sure that I understood that correctly. I think what you'll definitely see from us in the future is a higher and higher percentage of our bits, our product being shipped with some type of management associated with it.
Whether it's something like ClearNAND that takes care of error correction, something like embedded MMC that's fully managed, or ultimately, a system-level solution like an SSC or a PCIe card, much more of it, I think, will be shipped in that in the future.
Can I follow up with them? I know that Toshiba and SanDisk do a lot with their TLC. They're playing in the commodity market quite a bit for cars and USB drives. They're migrating their TLC to some of their managed products, like the iNAND. Would you consider using the TLC with the current NAND?
You bet. I mean, I think that there's also an element to what we're doing that, you know, we do seek to cram as many bits into the memory cell as we can. Different segments can handle different amounts of that. That's also a function of your error correction, your digital signal processing capability. We can bring all that to bear in the future.
Great. Thanks. Steve, just even since February, there's been an extraordinary amount of movement, transactions, and so forth in intellectual property. Some of the prices being paid for defensive reasons and so forth has gone extraordinary. I know you've got a portion of your IP with Round Rock and so forth. We talked a little bit about this last night. How should we look at really Micron's core intellectual property from a valuation perspective and what you're hoping to achieve in the next few years? Maybe sort of discuss through the acquisitions that you've made the last several years, really what you have that others might find extremely valuable.
I think we look on this IP frenzy, maybe the way to characterize it, with a little bit of interest, but I think also some amusement, really. You know, I think there are certain companies that have struggled with the lack of IP or their portfolio, and are now trying to react to that and do something about that. That's really a lot different scenario than for Micron. I think as many people know, we have an incredible IP portfolio. We've been one of the most prolific IP producers in the history of the semiconductor world. By the way, that all evolved out of a scenario in the 1980s when we were very vulnerable, similar to other companies vulnerable. We at that time decided to organically drive our portfolio, which we started doing in really the mid-1980s, late 1980s.
When we see companies being acquired for an enormous amount of money to get 5,000 patents or 6,000 patents, that's, you know, and Micron itself with our portfolio, which is multiples larger than that, we look at it a little bit differently than trying to acquire IP to protect ourselves. I think our intent is, as we've said in the past, we've gone down a path that we want to try to monetize some of our investment in IP, and that's what we've been doing. If I had a preference, and a number of us worked on this in Washington, I would, essentially, the way that patent litigation occurs in the U.S. has evolved to a point where it doesn't reflect at all the intent of the patent system that we put in place decades ago. If we had our preference, that would all be restructured and redone.
We think the way that IP litigation occurs in the U.S. today is ridiculous. Nonetheless, it exists. We're subjected to it. As you know, we're constantly in various battles around that, even though we're one of the most prolific IP innovative companies around. As a result, we decided that we have to assume that the current system's not going to change. If we're going to be under attack on one side, we need to monetize it on the other side. That's essentially what we've been moving towards, continuing to try to monetize that IP, whether it's selling it or whether it's using it for direct royalty payments, etc. We've disclosed a number of things in the past. If you add it all up, it's actually pretty significant dollars for us. If I had my preference, all that would go away.
It's not going away, so we have to do something with it. I don't think that, you know, I mean, I guess if someone offered to buy the company for $50 billion for our IP, we'd have to consider it. I don't see that for our company anyways as being significant in that role. I think it's primarily because the IP aggregation in the semiconductor industry has, for the most part, occurred. The way I would characterize that is we don't have very many new companies in the semiconductor world that are trying to acquire portfolios in order to protect themselves. We have lots of people in, whether it be a lot of the social media or the cloud, where people are trying to figure out where they've grown very quickly. They've become very large companies, and they don't have intellectual property positions. There's a lot of that going on.
I don't see that much of it happening in the semi world. I think that our focus will continue to be to both be able to defend ourselves, but also monetize a lot of the investments that we've made over the years.
Can you give us an update, maybe more qualitative than quantitative, in terms of some of the initiatives that you spoke about in February, even before, about moving into some adjacent categories, including LEDs and so forth? Where do you see, how's that all progressing? In this environment where there's just a lot of weak, a lot of issues surrounding competitive pressures and so forth in some of those categories, how can you use the company's balance sheet to accelerate growth in some of those areas?
Yeah. I'm going to have Mark comment specifically on a couple of those market segments. Let me first, Mark, I'm just going to give a backdrop to our thought process around that. First of all, we're a memory company, and that's where the vast majority of our resources are spent. How do we make sure that we have a broad enough portfolio and we can take advantage of opportunities that exist around consolidation in the industry? As a memory company, we're very focused on that. The reason that we've had interest in a couple of other categories that Mark will comment on is because we also view ourselves as very large silicon producers.
There's a certain expertise that you gain by being a very large silicon producer, and we've looked at some of these opportunities as ways to leverage our expertise in the ability to produce silicon and the ability to have manufacturing facilities that produce silicon as a way to explore whether we have strategic or whether we can develop a strategic advantage in other categories that also might be very large consumers of silicon. That's what we've focused on. Mark?
Along the lines Steve was talking about, the most significant opportunity that we're interested in is in the solid state lighting LED arena. It's because we're convinced it's going to be a very big market, and it's an area where we think we can bring core competencies from our memory business to bear to deliver something that is technically very differentiated from other solutions on the marketplace and bring us a potentially sustainable competitive advantage. We're happy with the way that's going. The program is not to deliver a me-too LED. It's to deliver a superior performance, lower cost, higher quality solution that we can then deliver into value-added lighting systems. We're making good progress. We have a business plan for 2012 that will start to see the first revenue in that market, but it's in the tens of millions of dollars.
It won't be significant to Micron in 2012. We do think it's a long-term, good opportunity for us and something where we can potentially do something that's quite competitive with other folks in the industry. That's solid state lighting. The other two areas that we've talked about publicly that we're interested in—by the way, on the LEDs, the underlying core competency there revolves around substrate engineering and around gallium nitride types of structures. There are extensions of that around power devices and things that we may look at as we prove out the differentiated technology we have. The other two areas that we've talked about having an interest in are the low-power mobile display arena. Again, here we think we have a great technology that over time will become more important, but is not significant to Micron today.
This is something that we think we have unique core capabilities in because a lot of these integrated display technologies really leverage advanced memory, and you can use advanced memory in interesting ways in order to drive enhanced performance. The technology we've selected is very, very low power and therefore very applicable to portable applications. We think it dovetails well with the customers we have today. That, again, in 2012 won't be a significant business for us, but we think it has good long-term potential for the company as well. Finally, we've been doing some work in the solar arena. Again, we picked something that dovetailed with our core competencies that we thought would potentially deliver a long-term competitive advantage. I'll tell you today, the solar business is just a tough, tough business. We continue to look at what our technology can deliver that's differentiated and add value.
We'll look for ways to monetize that. That's not something that you should think of Micron jumping in in a big way into the solar business anytime soon.
Just a couple of follow-up questions. Steve, you talked about all the IT issues. Can I ask you to update us on the timeline of the Rambus case? I know there's testimonies going on right now. When is that expected to end and expected judgment date?
Yeah. They're always tough to predict because, you know, between the witnesses and there's three parties in the courtroom and so forth. I think that, timeline-wise, at least the last I've heard is that where the schedule is going and the witnesses and so forth, it's probably going to be in the next month, maybe a month and a half for that to conclude. Of course, jury deliberations are impossible to predict, and that'll affect it. I think we're getting closer, if you will. As I said, I think it's sometime in the next month, month and a half, that they'll probably finish all the evidence. Jury deliberation is unpredictable, and that'll be whatever it is.
I have just asked Glen some questions. In terms of the complexity of the controller technology, can you just talk about how that's evolved as you go into 19 nm and beyond? How do you balance investing in your own controller technology with your customers who are also third-party controller providers like Fusion IO and all that? How do you manage that balance?
Yeah. You bet. You know, first, to your first question, as we get to each NAND lithography, the controller requirements are increasing significantly. In fact, there's about an order of magnitude increase in the gate count as we go from our 25 nm NAND to our 20 nm NAND. A tremendous amount of horsepower is required to really get the most out of the flash as we move forward. In terms of what we do internally versus externally, as I showed earlier, we have a very wide variety of segments of customers that we're working with. There's a tremendous variation in the form factors that people want. We know that there's no way we are going to be able to do 100% of those controllers ourselves. It really comes down to what is it that we're going to choose to do internally versus externally.
The example that I had shown, I think, is a good example of probably about the hardest controller that you could do, which is our PCIe SSD controller. I think that's a very good proof point for us that shows that we know how to do leading-edge high-performance controllers and get great performance results out of that. All the firmware, the ASIC, all that stuff, SARS, manufacturing SARS. There's a good example of where we will absolutely be applying our internal focus going forward. The high-performance drives using the latest NAND lithographies, that's what it will all be about. That said, there's a large continuum down to devices like USB and SD cards that, in those cases, obviously, it makes better sense for us to partner with somebody. Even devices like that in the future are going to require some additional enablement that hasn't been there before.
We have to be prepared to work with those third parties as well to create the right controller capabilities. Everything in between is something that we'll be going after. You'll see various approaches from us in the future. We're already doing that, basically.
How much is what you see now is three bits per cell? When do you think that gets to become used in embedded systems and solid state drives? Systems?
A very, very small percentage today is three bits per cell, particularly in our SSDs. We're using multi-level cell, two-bit per cell flash, and single-level cell flash. In the future, it's something that we're looking at. However, keep in mind, every time you go from one bit per cell to two bit per cell to three bit per cell, you're getting a diminishing cost benefit, number one. Number two is the technology scales. It's getting a lot harder to use those three. Even some people have talked about, and we've looked at, four bits per cell capabilities. The amount of effort, it's not obvious to us how big of a focus that should be. We're very comfortable with our current focus, which has been get to the next lithography first, get that into production, get one and two bits per cell there. That's our main focus.
We've got that three bit per cell, and we have more, by the way, if we need to deploy that.
Okay. Yeah.
Yeah. A follow-up for Mario. Mario, a big part of your presentation was the fact that the complexity in the wireless ecosystem is an advantage to Micron, presumably because you're doing a lot of customer semi-custom solutions that drive higher margins. Do you think that complexity stays constant over time, or do you think you'll start to see that market need to standardize like the PC market? That is, you've already seen Nokia move towards Microsoft. You heard HP last week. They love the web OS, but they hate the hardware it's going into, and they're getting out of the tablet and the handset business. Does that complexity actually move to more of a standard? If it does, what does that mean for profitability from a Micron perspective in that vertical?
Yeah. I think I showed in the example of the PC versus the complexity of the mobile wireless market in general because of that. You start with a very large fragmentation with a huge amount of players, each trying to position itself in the market, offering a differentiated value. This is going to change through time. Some changes that, as you mentioned, are already happening. Some mergers are happening. Some partnership at least, like the Nokia, Microsoft, are trying to drive the standardization. There is the other effort from the other side, which is trying to protect differentiation as a way to generate value. I think, step by step, there will be some standardization. There will be definitely standardization. For instance, in the package architecture, what footprint, what number of ballouts, how many stacked products will stay in the package. Are you going to use MCP versus POP?
All that is becoming more and more a standard solution. Still, there is a lot of differentiation. I think at the operating system and architecture level, still the variety is very, very, very large. They need to happen, some consolidation along the way to cut some of these differentiations. Still, we see a value in the differentiation because this is our ability to manage the different requirement to create margin and to create opportunity for us to grow in a positive way.
Follow up, Brian . What's your view on Win 8 when it comes out next year as far as DRAM content in the notebook market? It's promised to be kind of a slimmed-down OS, more efficient OS. What's the implication for DRAM? I guess the same question I asked Mario. To the extent that now you're going to open that up, that ecosystem up to ARM, does that add a level of complexity where you can bring value to the memory side as ARM players get into that market?
What we have seen from Win 8 is that the content per box, there is some advertised slimming. I think from our perspective, what we've seen, there's always a little bit of feature creep that comes in as well. We're pretty bullish that in the notebook space, content per box will be situated well over the next couple of years between 4 GB and 8 GB . That's obviously balanced against some of the tablet and thin and light segment. I think we've commented on some of the trends we're seeing there. From a computing platform perspective, what we have seen is that 4 GB is pretty much a good minimum for the kinds of applications that people are looking at running, even in the thin and light segment, regardless of OS and regardless of processor.
Some overall aggregate look with the tablets coming in, Win 8 is not the thing keeping us awake at night in the content space.
[Are they available? Is that another goal of complexity? Do you think your company does any compensation in the other?]
Absolutely. ARM as a platform, frankly, has opened up an entire new, I'll call it innovation thread, for all of the memory guys, specifically around opportunities to optimize a little bit better for power, really take advantage of the core reduced power of ARM in general. As you see the enabler base broadening out with other ARM players out there, you know, the Qualcomms, the NVIDIAs of the world, the innovation opportunities are going up significantly.
Okay, we probably have time for one more question if anybody has one.
Steve, this is a long-term question, but Micron has always been known as a DRAM company, and that is reflected in the share price today. You know, it's demonstrated in the last three years how much more diverse and integrated, and the specialty functionality of memory is becoming a big part of your message. Are you going to rebrand Micron a little bit more into being an all-in-one, high-end memory company instead of just a DRAM company or a mobile memory company in some sort? How do you help us convey that message that Micron is different now with these new models?
Yeah. I think we're impacted by a couple of things along the lines of that question. One is just the fact that we have DRAM as part of our portfolio. For those of you that remember TI, until we finally bought their DRAM business, they always traded primarily with the selling price of DRAM in their share price. Other companies, I think, have been reflective of that. I think we do have an impact from that. The fact that DRAM is part of our portfolio, until that changes, which is my second point, is that we're also impacted by, I think, a decade of not very good results, a decade where the industry was under considerable stress.
Until we have greater history, until people can actually see that Micron will go through a cycle and not be as impacted as dramatically as we have been in the past, then I think until that happens, we won't get credit for it. In other words, there was a period of time where we were getting credit for the growth rate and the ultimate expansion of the DRAM industry. That's kind of up to the year 2000. People always had confidence that no matter what happened with a particular cycle, it would come roaring back and so forth. Really, what's happened in the last decade, other than last year, it finally happened where we came roaring back and our results were better than they'd ever been before. That's just one year out of a decade.
I think it's a little hard to expect an investor base to think that one year makes a new decade. Until we have some history, because I actually think that the memory industry will consolidate. There are, as I said, a couple of plays left in the DRAM industry. Once that happens, the reason that DRAM is considered a commodity certainly isn't because of the capability needed to make it. It's not, by the way, because there's also lots of new entrants that are commoditizing the space. There's really only a few of us left developing the technology. It's still because we have a hangover, a carryover of the way that the supply and demand curve has worked over time. I still am a firm believer that ultimately that will mitigate and correct itself. It's not that we won't have cycles like any company does.
It's that specific to DRAM, they won't be like they were in the past because, you know, the industry will consolidate and be more mature and will be more rational. I think that's coming. I understand why we don't get credit for that yet. I think ultimately, and this, you know, some of you may think I'm crazy, but I think ultimately, the fact that we have DRAM as part of our portfolio will be viewed as a plus, not a negative, as the industry kind of goes through its final plays around maturing. There'll be more volatility in the NAND space by virtue of price elasticity and growth rates and capacity coming into play, although it won't be as bad, I think, over time as DRAM was historically because the market diversification is already at a point that took the DRAM industry 25 years to get to.
My perspective is that ultimately, you know, we'll get credit for what we're doing, by virtue of having a sustainable history, that shows that, the comment that I made a year ago, which was, look, the next ten years have to be better than the last ten years. As that starts to unfold, then I think we will get credit for it in the share price. Did you have a question too? Just go ahead and ask, and I'll repeat it so they can hear it.
I was just wondering, you know, IMFS ramping up [with Inotera ]. How we should think about production to come?
Yeah. The question is around, with Inotera getting better and IMFS ramping, you know, how should we think about production costs moving forward? Mark, do you wanna comment on it?
Yeah. I think you have to look at Micron's business and the complexity associated with it and try to separate out cost per bit in the stuff going into the commodity space versus cost per bit in the stuff that really is a more stable margin and going to drive profitability irrespective of cost reduction. Because some of those products, we don't get to shrink because the customer wants the same product next year and the year after as he's getting today. If you think about the part of Micron's business that's going into the most commoditized spaces, the stuff that's going into PC DRAM, the stuff that's MLC NAND going into whatever the more high volume applications are, I think what you'll see is that we'll perform with Moore's Law on a go-forward basis.
That model is not broken for us yet, irrespective of the fact that we're getting nearer the end of the roadmap on NAND and things are getting tougher and tougher on DRAM. I think we continue to drive costs out as we have over the last decade, moving forward at least through the next three years or so, which is probably enough for the purposes of this conference anyway. We'll continue to drive costs out in that piece of our business at roughly the same rate the industry has over the preceding decade.
What would you see as bite to the short term?
I mean, our cost structure? I think clearly, Inotera getting better from where they were will help a lot. Obviously, IMFS has gone fantastic, and that's ramping very quickly. In fact, I was surprised at how many wafers are actually being shipped now and how quickly it's come online. There's no question that will help us in the short term, as compared to where we were a quarter or two ago, in our cost structure.
Let me just follow up. I think we gave some specific guidance at the last conference call, and we're still in line with that guidance for the current quarter.
Okay. Let's just wrap up. I again want to thank everybody for taking the time to come spend some moments with us today. Let's talk about the company. We're very appreciative of having the opportunity to do that.