Micron’s hunt for its next chief executive has ended with the company hiring Sanjay Mehrotra, the founder and former chief of memory chip rival SanDisk. The move announced Thursday ends a three-month effort to find a replacement for current chief Mark Durcan, who plans to retire.
It is a safe time for Micron's changing of the guard, which takes effect on May 8. The prices for its short-term memory for gadgets and long-term storage for data centers are soaring. But uncertainties loom. The market is staring down competition from China, the sale of Toshiba's memory unit, and technological shifts like 3D NAND and 3D XPoint.
Mehrotra, 58, is one of the industry's elder statesmen. SanDisk, which he founded with Eli Harari and Jack Yuan in 1988, turned flash into an everyday product now sold next to chewing gum and tabloids at grocery store checkouts. NAND flash became popular in cameras and other gadgets because it can save information even after losing power.
Mehrotra became chief executive when Harari retired in 2011. After more than two decades with SanDisk's engineering team, he revitalized the business in his new role, shifting SanDisk's memory chips off store shelves and into servers. The good times continued until 2015 when Western Digital bought the company for $19 billion.
Durcan’s term as chief executive also lasted five years. Durcan steered the Boise, Idaho-based Micron through choppy financial waters, which came from low memory prices. Because the chips are largely interchangeable, prices change based on supply and demand, not unlike those for dairy or steel.
Last year, Micron struggled mightily to counteract the falling prices of DRAM and NAND chips. After disappointing third quarter sales, it announced plans to cut 7.5% of its 32,000-person staff. The cutbacks would save an estimated $300 million in 2017, Micron said.
In contrast, Mehrotra is taking the reins with memory prices surging. IC Insights, a research firm in Scottsdale, Arizona, projects a 37% rise in the average selling price of DRAM, up last year from a 12% decline, and an increase of 22% increase in average selling price of NAND flash, up from a 1% decline last year.
Last year, Micron started selling 3D NAND for enterprise applications and shared details of its Quantx products, which are based on the secretive 3D XPoint memory it devised with Intel. The chips, it says, have four times the capacity of DRAM and ten times lower latency than NAND.
Two years ago, Durcan tiptoed through a $23 billion offer from China’s Tsinghua Unigroup, the public face of Beijing’s ambitions to become a memory superpower. With virtually zero-chance of regulatory approval, Micron declined. But the episode underscored the looming threat of China’s domestic industry, which could create a glut in the memory market.
China is investing heftily in manufacturing. Tsinghua, which has hired the former chief of Micron’s Inotera Memories unit, is building a $30 billion memory fab in Nanjing, where it hopes foreign language schools and other perks will attract engineers. The factory will make DRAM and NAND.
For now, Mehrotra will be tasked with keeping Micron on course. “The board is not looking to revise Micron’s direction, but rather to ensure we continue to invest in areas of the business that will accelerate Micron’s market and technology position,” the company said in a press statement.
Micron's board seems confident in Mehrotra's ability. “Sanjay has an outstanding track record of business success and exceptional knowledge of the memory and storage industry,” said Robert E. Switz, the chairman of Micron’s board, in a statement.
Mehrotra, who holds more than 70 patents, has also served as SanDisk’s chief operating officer, head of engineering, and chief of product development. He was also the architect of SanDisk’s 17-year partnership on NAND manufacturing with Toshiba, the inventor of the technology.
With the change in roles, Durcan will retire. He joined the memory supplier as a process integration engineer in 1984, climbing the ranks to chief technology officer and later president. In 2012, Durcan postponed his retirement to take over for chief executive Steve Appleton, who died in an airplane crash in Boise.
Durcan, 55, will step down from his role as chief executive early next month. He will also relinquish his seat on Micron's board, though he will continue serving as an advisor into August. Mehrotra will split time between Micron’s offices in Boise and Milpitas – a few miles from SanDisk’s California headquarters.
"Innovation in memory and storage technology is enabling new products, improved customer experience and growth across multiple markets," Mehrotra said in a statement. “I am thrilled to have the opportunity to lead such a talented global team.”