Micron Technology, Inc.

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Executive Summary

Highlights

Clear Company Strategy

Micron Ventures primary objective is to assist Micron Technology, Inc. (“Micron”) in supporting the long-term needs of its customers. As a key component of Micron’s innovation strategy, early stage equity investments provide Micron with access to technologies, markets, applications and key innovations influencing the semiconductor space.

Whether it is a simple investment or a more extensive partnership, Micron Ventures uniquely tailors its collaboration to address the specific needs of its portfolio companies. Ultimately, success is predicated on the ability of Micron and its co-investors, to assist growth companies in becoming determining forces within their respective marketplaces.

Company description and history:

Micron Technology Inc is a company that established by Ward Parkinson, Joe Parkinson, Dennis Wilson and Doug Pitman in 1978 which located in Boise, Idaho, State of USA. Now MTI is one of the biggest semiconductor device producers in the world, their primary products are Dram flash memory, NAND flash memory and comics image sensor. Which means the company has a wide spread of operations, which includes computer, mobile, internet, automotive, industrial designs, security protection, consumer markets and medical industry. Their factories are all over 14 countries, 3 continents. Under the circumstances of rapid economic growth, they still only doing their own business and invest by acquisition other semiconductor companies, which could decrease the unemployment rate of US and the other countries as well. For a technology company, they also put their vision in the future which can see on the educational business, they support the efforts of teachers and faculty to promote robust education in the areas of science, technology, engineering and mathematics.

Scenario Analysis

P.E.S.T FACTORS

Political Factors

The companies manufacturing units are in United States, Italy, Singapore, Israel, Puerto Rico, Malaysia, and China. It has retail outlets al over the world. This has resulted to political influence from different countries. The company hence faces risks of political instability, compliance with International regulations including export control laws and Foreign Corrupt Practices Act. Operation in different countries has however been of great significance to the company due to reduced production costs especially labor cost, in china, for example. Government regulations have been changing with time affecting the operations of international firms negatively.

Economic Factors

Micron Technology operates internationally. It is hence influenced by international factors including fluctuating interest rates in different countries affecting the debt levels, export and import duties which are always changing. Various government have different regulation, and this affect the operation of the company, the regulations also change with time and the firm should, therefore, incorporate this in their plans. The company supplies its products to developing countries that are easily affected by inflation; this negatively affects its returns. The company is also affected by exchange rates.  It has to convert the different currencies it operates in, mainly the Singapore dollar, Yen, Euro and Shekel, to US dollar that is the company’s reporting currency. For example, the company lost $6 million from changes in exchange rates in 2012 and $23 million in 2010. The economy is faced by boom and recession which affect the firm’s operations. For example, the European financial crisis and the overall downturn has negatively affected the demand for the devices. The company operates in locations prone to natural occurrences like poor weather conditions and geological events like earthquakes and tsunamis. Occurrence of such events affecting the company’s operations will result to significant losses to the company. Most countries like China that were known as primary sources of cheap labor have started to develop minimum wage policies which have raised wage rates negatively affecting Micron.