How Singapore drives almost a third of U.S. chipmaker Micron’s revenue

Two types of memory are commonly used in today's electronics: Dynamic-random access memory (DRAM), and NAND. The former has gotten a lot of recent attention, due to it being used in high-bandwidth-memory chips used in AI processors made by companies like Nvidia.

But NAND—commonly used in electronics like mobile devices—has a role to play in the AI boom too, Chen Kok Sing, country manager for Micron in Singapore, says.

Almost all of Micron Technology’s NAND memory is made in Singapore. NAND contributed $2.1 billion to Micron’s revenue last quarter, representing 30% of its revenue.

"AI generates a lot of information data and they all need to be stored, so then NAND comes in to play a part in the terms of the storage capabilities," Chen says.

Micron’s Singapore products are used in data centers and products that are “intelligent edge,” like smart home systems, Chen says. In its June earnings presentation, Micron forecast industry growth for both DRAM and NAND to be in the mid-teens percentage range in the short-term.

Singapore benefits from Micron too: Its presence gives the Southeast Asian country its footprint in the AI chip market. According to HSBC, Micron helps give Singapore a 10% share in the high-end global memory market.

Why is Micron Technology in Singapore?

Micron's presence in Singapore dates back to 1998, when the firm took over Texas Instruments' global memory business. (Texas Instruments started operations in Singapore in 1969)

Since then, Micron's footprint grew from two manufacturing plants and an assembly and testing site to now include four wafer fabs and more advanced automated test facilities. About 9,000 employees work in Micron's Singapore sites.

“The Micron Singapore plant plays a very critical role in our global leadership strategy,” Chen says.

Micron’s facility in Singapore is also its NAND center of excellence, combining technological development, product engineering, and manufacturing.

Chen, who joined Micron straight out of college, says Micron’s Singapore success is thanks to the city’s talent ecosystem. Chen points to Singapore’s universities and polytechnics as an important source of STEM talent, with electrical engineering students spending time as interns at the company.

Why memory matters

“All this memory, be it DRAM or NAND, is used in every device,” Chen says. “Mobile phones, data centres, solid state drives, the internet of things, a lot of these things require data to be manipulated and data to be stored.”

Micron also produces high-bandwidth-memory chips (HBM), used in the graphics processing units that now power AI applications. Micron’s HBM production takes place across three regions with design and process development in the U.S., memory fabrication in Japan, and advanced packaging and testing in Taiwan. DRAM chips, which includes HBM, drove almost 70% of Micron's revenue last quarter.

Samsung, SK Hynix, and Micron are the largest firms in the memory chip sector. Shares in Micron, headquartered in Idaho, have risen around 30% this year so far thanks to surging demand for memory chips.

Singapore’s tech and AI push

While Singapore hasn't announced blockbuster chip subsidies like the U.S., Europe, or India, the country can count on something else: Decades of experience in the semiconductor sector . Chipmaking accounts for 40% of added value in Singapore's manufacturing sector. Manufacturing makes up about 20% of the country’s GDP.

Micron's operation in Singapore is the only one in the country producing leading-edge NAND technology.

Yet in addition to the cutting-edge, Singapore also produces mature chips, with manufacturers like United Microelectronics Corporation and GlobalFoundries announcing multi-billion dollar investments on the island in recent years. Companies that already have operations in Singapore are finding it easier to expand than to set up an entirely new operation in another location.

Dutch bank ING forecasts that AI chip demand will remain strong until at least 2025, and that could continue lifting the earnings of chipmakers like Micron.

After investing more than $30 billion into its Singapore operations over two decades, is the chipmaker open to investing more? “We are always on the lookout for additional opportunities given the right time and space,” Chen says.

This story was originally featured on Fortune.com