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The Connected Home Is Micron's Next Growth Frontier

  • The Connected Home is necessary to allow consumers to save money and time moving forward.
  • Micron has already started "seeing increased DRAM demand in Connected Home segment.".
  • Micron's 20nm technology, Inotera acquisition & 3D XPoint will enable it to gain more sales in the Connected Home segment.

The big question in this article hinges on whether or not the Connected Home Segment could be one of Micron Technology's (NSDQ:MU) next growth frontiers.

"Our Industrial multi-market segment, we’re seeing good design-in activity of our M500 IT industrial SSDs and specialty DRAM. And in the Connected Home segment, we’re seeing increased DRAM demand from key set top box customers in both Asia and North America." - Micron's Second Quarter Fiscal 2016 Financial Results.

The big question stems from Ernie Maddock's (Micron's VP, Finance and CFO) remarks during Micron's Q2 2016 earnings call. He stated that Micron is "seeing increased DRAM demand from key set top box customers in both Asia and North America."

These remarks are critical for Micron because DRAM sales represent 54% of Micron's total revenues as of Q2 2016. The breakdown of DRAM sales are as follows: Mobile was in the low 20% range, the PC segment was in the mid-20% range, the server business was in the low 20% range and specialty DRAM, which includes Networking, Graphics, Auto and other embedded technologies, was in the high 20% range. Therefore, any growth driver for Micron's DRAM is paramount to the companies future.

But what exactly is the Connected Home Segment? Why does it matter? And how does Micron fit into the picture?

A "Connected Home" or a "Smart Home" is a way of providing home owners with comfort, energy efficiency and convenience. This is done by enabling appliances, lighting, heating, computers, air conditioning and others to communicate with one another. Because this is a novel and emerging concept, most homes do not have appliances and systems built into them.

This matters because as homes (people in...