Gov. Otter shares the founding story of Micron
Micron Technology Inc. has come far since its founding 40 years ago this month in the basement of a dentist’s office at Cole Road and Northview Street. And in recent years, its relationship with Boise has changed dramatically.
When Micron’s CEO joined with Gov. Butch Otter and Boise Mayor David Bieter on the Capitol steps Thursday for a 40th birthday party, they didn’t mention the loss of blue-collar Treasure Valley manufacturing jobs since Micron closed its last production line nine years ago.
Instead, they celebrated Micron’s contribution to Boise and Idaho as an employer, taxpayer and benefactor. The founding “began a great day for Idaho,” Otter said.
Micron has survived in an industry that defeated dozens of competitors worldwide. Its corporate campus on Federal Way has emerged as a research, development and administrative center that recruits scientists and engineers from around the world.
Those well-educated, hard-to-find specialists are paid better than the former fabrication-unit, or fab, workers in clean-room “bunny” suits who once made up most of Micron in Boise. The engineers buy homes here as their work supports tens of thousands of other fab workers in bunny suits in states such as Utah and Virginia as well as abroad in Japan, Taiwan, Singapore, Malaysia and China.
Micron had a humble birth and has had a rocky, sometimes amusing history.
How Micron got its start
It began with Ward and Joe Parkinson, twin brothers born in 1945 and raised in Blackfoot, in eastern Idaho. Ward earned a master’s degree in computer design at Stanford and later worked for Mostek, a memory chipmaker in Dallas. Joe became a Boise lawyer.
In the late 1970s, Ward and two younger colleagues, Dennis Wilson and Doug Pitman, left Mostek and set up their own consulting company in Dallas. They had a dream: to build the next-generation computer memory chip.
But Pitman, an Idaho Falls native, did not want to stay in Dallas. He wanted to return to Idaho. His partners were amenable. Pitman and his wife arrived in Boise to look around. He got a good deal on the dentist’s basement. He told Ward Parkinson that he felt so good about moving to Boise that he bought a house.
“I almost died,” Ward Parkinson told the Idaho Statesman in 1997. “There was my long pause. Then I said, ‘Well, I guess we’re going to Boise.’“
It was 1978. Joe Parkinson drew up the incorporation papers. The partners moved into the dentist’s basement, where sedative gas wafted down from the floor above. “We got used to smelling happy gas,” Joe Parkinson says. “I think it knocked our IQ down about 10 points.”
Joe Parkinson recruited investors, too. The first three were Boise businessmen Ron Yanke, Tom Nicholson and Allen Noble. Over lunch at the former Royal restaurant Downtown, they agreed to sink $300,000 into the company.
The businessmen knew little of computers, but the brothers impressed them. They gathered Saturday mornings at the Stagecoach Inn on Chinden Boulevard. Micron needed more money. Soon Nicholson, Yanke and Noble called Scott Simplot, son of the late J.R. Simplot, Idaho’s potato baron.
“Because they were in it, it made it easier for us to be in,” the younger Simplot told the Statesman in 1997. He recommended the investment to his father. J.R. Simplot invested $1 million.
Ward Parkinson, Wilson and Pitman designed a dynamic random-access memory, or DRAM, chip that was smaller than the chips of the day. They and Joe Parkinson struck deals with other semiconductor companies to test their design. “So we knew what we had by the time we built the facility out on Federal Way,” Joe Parkinson says.
That would be Micron’s first plant. It still stands on Micron’s sprawling campus. It was a lesson in how to start a high-tech manufacturing business on the cheap.
Nicholson, a rancher, grazed livestock in the desert southeast of Boise near Interstate 84. He signed over 50 acres to Micron, requiring that the company pay him only if it succeeded.
Yanke, the second-generation co-owner of a family machine-shop business, witched the land for the water Micron would need for its plant. He found a gusher.
Joe Parkinson knew an architect who had designed the D’Alessandro’s supermarket at 4983 N. Glenwood St. (later a Max Foods, now the Revolution Concert House), a big supermarket in its day. The architect and Joe Parkinson used that store design for Micron’s first building, expanding its meat locker space to create a dust-free “clean room” for manufacturing.
Micron bought obsolete equipment that other manufacturers had used to make chips on 4-inch-wide wafers. The standard then was 5-inch wafers. No one else wanted the 4-inch stuff. “The weight of the metal is what it was worth,” Joe Parkinson says.
A tech leader had told J.R. Simplot that no one could build a DRAM plant for less than $200 million, Joe Parkinson says. Micron opened the 50,000-square-foot fab in 1981 for $7 million.
Some of its problems demanded low-tech solutions. Ward Parkinson came up with the corporate symbol: the Greek letter Mu. Micron printed it on the top of its chips. But customers noticed that the letter smeared whenever they inserted the memory chips into their motherboards. This cost Micron sales. “We couldn’t get qualifications from IBM, Apple and so forth because the logo was smearing,” Joe Parkinson recalls. So Micron’s first chief financial officer, Leslie Gill Rader, brought her hair dryer to work to heat boxes of chips and dry the ink.
Micron grows up
Joe Parkinson interviewed nearly every employee that Micron hired. Although the founding partners and Boise investors were essential to Micron’s start, he says the company would have failed without the talent of certain early employees, including Jim O’Toole, Barbara Gatton, Tom Trent and Randal Chance. Chance’s assumption of control of a chaotic production unit “was a major turning point in the history of the company,” he says.
One of the job candidates Joe Parkinson interviewed was Steve Appleton, a Californian who had gone to Boise State University on a tennis scholarship. Appleton joined Micron in 1983 as a 22-year-old production-line employee working 12-hour shifts for “$3.84 an hour, just like other operators,” Joe Parkinson says. Parkinson’s hope from the start was to promote Appleton once he learned enough. “I told him, ‘You’re going to have to start on the line with the rest of them, and you either make it or you don’t,” he says.
Appleton made it. Focused and competitive, he rose fast. As Micron faced stiff Japanese competition, Appleton taught himself Japanese.
The company had more than 700 employees by 1984, when it first sold stock to the public. It grew fast through the ‘80s and ‘90s, but competition took a toll. In 1985, Micron was in danger of failing as Japan dumped cheap chips in the U.S. It cut its 1,250-employee workforce in half.
That wasn’t the only time Micron’s future was in doubt. Chipmaking is capital-intensive, and shutdowns are costly, so for more than 30 years, Micron followed years of fat profits with years of staggering losses when chipmakers worldwide churned out more chips than buyers needed.
In 1994, Micron announced that Joe Parkinson, then 50 and the CEO, would be replaced by the 34-year-old Appleton. Sales and profits were growing, and employment had climbed to 5,500, but media reports then said Simplot and Parkinson feuded, and Simplot still owned more than one-fifth of the company. For his part, Joe Parkinson says his brother had already stepped down and that “took a lot of the fun” out of his work.
Appleton and the Micron board feuded too, and Appleton was fired in 1996, only to be rehired eight days later after the executive team rebelled and J.R. Simplot acknowledged that the board had made a mistake. On Appleton’s watch, Micron built a plant in Utah and bought plants in Virginia, Europe and Asia whose owners had struggled.
Employment in Boise rose, too, as sales grew. But as the 1990s passed into the 2000s, the manufacturing processes and equipment used in Boise gradually grew out of date, and thousands of workers were laid off. Appleton decided to stop investing in new manufacturing in the Treasure Valley. In 2009, amid the Great Recession, he closed the last of the manufacturing fabs. Fewer than 5,000 workers remained in Boise.
Appleton, a pilot, loved to fly, and he led Micron until 2012, when his experimental plane crashed at the Boise Airport, killing him as he was starting a solo flight. His No. 2, Mark Durcan, took over as CEO. When Durcan retired last year, Micron’s board hired SanDisk founder Sanjay Mehrotra, the first CEO not hired from within.
Micron’s impact in Idaho today
Though employment has shrunk locally, it has grown worldwide to 34,000 people. And Micron’s role in Boise has grown in other ways. Its corporate foundation has donated tens of millions of dollars to Boise State University, largely in a quest to develop homegrown talent.
Micron says it has given $88 million to Idaho schools and nonprofits. Now Micron is starting to donate 100,000 hours of employees’ time worldwide each year to worthy causes in their communities. “Recently, especially over the last year, we talk a lot more as a company about the importance of giving back,” says Karen Metz, vice president of business planning and process management.
Meanwhile, Micron’s business has grown less cyclical and more stable. That’s a consequence of consolidation in the memory industry that has left just three major DRAM makers in the world: Micron and two Korean companies, Samsung and SK Hynix. Japan is no longer a competitive threat.
It’s also a consequence of a strategic focus on selling products tailored to specific customers’ needs at higher prices than commodity chips command. “We’re a lot more proactive in what the customers need,” Metz says.
Mehrotra sees big opportunities for Micron memory in stored information, artificial intelligence and machine learning. “The data market today is very different from the PC-dominated market of the past,” he told analysts in March.
Micron today employs 6,300 people in Boise, Metz says. That’s down from the peak of about 12,000 in 1999. It is still the largest for-profit employer in the Treasure Valley, second to the nonprofit St. Luke’s Health System among all private-sector employers. The Boise campus still has fabs, but they’re for research and development.
Joe Parkinson does not understand his successors’ emphasis on manufacturing abroad. “We didn’t need facilities elsewhere, because of FedEx,” he says. “I hear people say they need to have facilities where the customers are, and I have to scratch my head. If they can get it overnight, why do they care where it comes from? And I could manage, and motivate, a helluva lot better here. People are motivated when they have the leaders right there with them.”
But that’s as far as Parkinson steps toward criticism. Micron is bigger now than it was in his day, and it has survived brutal downturns. Today it is adding production capacity and is enormously profitable: Micron earned $14 billion in profits on $30 billion in sales in its latest fiscal year. It is the world’s fourth-largest semiconductor company by revenue and the nation’s second largest, after Intel.
“The last 40 have been awesome,” Mehrotra said Thursday. “The next 40 will be even grander.”
Joe Parkinson still keeps in touch with former colleagues and visits the Federal Way campus, though only occasionally.
“They’re too nice to me, and it interrupts the flow of their work,” he says. “I love Micron.”
A Micron timeline
1978: Micron Technology Inc., is founded
1980: Ground is broken on Micron’s first water fabrication plant on Federal Way
1981: Micron ships its first 64K DRAM
1984: Micron goes public, becoming a publicly traded company on Nasdaq
1994: Micron is named a Fortune 500 company. Steve Appleton succeeds Joe Parkinson as CEO
1998: Micron acquires Texas Instruments’ worldwide memory operations
1999: Micron creates a foundation to advance STEM education and support communities. Boise employment peaks at about 12,000.
2000: Micron stock reaches $96.56, its all-time high
2002: Micron acquires Toshiba’s DRAM operations in Manassas, Virginia
2004: Appleton is hospitalized briefly after a plane in which he was performing stunt maneuvers crashes
2005: Micron and Intel form a flash-memory joint venture, IM Flash Technologies, to operate Micron’s Utah plant.
2009: Micron ends memory manufacturing in Boise. Fewer than 5,000 workers remain
2012: Appleton dies when his plane crashes in Boise. Mark Durcan succeeds him as CEO.
2013: Micron acquires two struggling competitors, Japan’s Elpida Memory, Inc., and Taiwan’s Rexchip Electronics Corp.
2015: Micron donates $25 million to Boise State University to build a materials-sciences building
2016: Micron acquires Taiwan’s Inotera Memories, opens a Singapore fab
2017: Micron opens new cleanroom fab for research and development. Sanjay Mehrotra named CEO.
2018: Micron stock tops $61, its highest in 18 years. On Thursday, it announced it will dissolve the IM Flash partnership in 2019 and run its Utah plant by itself.
The Valley’s big private employers
This list, prepared by the Boise Valley Economic Partnership, does not include nonlocal employees.
St. Luke’s Health System 7,000-7,999
Micron Technology 6,000-6,999
Saint Alphonsus Health System 4,000-4,999
HP Inc. 1,000-1,999. (Hewlett Packard Enterprise has 500-999)
J.R. Simplot 1,000-1,999
Fred Meyer 1,000-1,999
Idaho Power 1,000-1,999
Wells Fargo Bank 1,000-1,999