 from San Francisco, it's theCUBE. Covering Micron Insight 2018, brought to you by Micron. Welcome back to the Embarcadero, everybody, here in the heart of San Francisco, actually at the bay of San Francisco. Golden Gate Bridge is that way, financial district over there, Knob Hill, right up the street. You watch theCUBE, the leader in live tech coverage. I'm Dave Vellante, this is David Floyer. We're here covering the Micron Insight 2018 event. People are starting to filter in. Any minute now, we're going to start the keynotes with the executives, a lot of buzz going on. Derek Dicker is here. He's the corporate vice president and general manager of the storage business unit, emerging activity within Micron. Great to see you again. Thank you very much for having me. It's a pleasure to be here. You're very welcome. Yeah, so Micron used to be just a straight memory company. We're hearing, we heard at the investor day in May, how you guys are diversifying, finding new use cases, new applications. You run the storage business, and of course, David Floyer was one of the first, in my opinion, to predict the demise of the hard disk, the spinning disk, and it's a tailwind for you guys. But Derek, take us through your business unit, your role, and let's get into it. Sure, that sounds great. I appreciate the opportunity again to be here. The storage business unit within Micron is actually comprised across a couple of product areas, primarily NAND components, and then also SSD, solid state drives. As we like to say, and we've talked a bit more about it since Sanjay's arrival, we have a pretty material focus on accelerating what we call high value solutions. It's a big focus of ours. So not only are we developing the core technology in memory and storage, but we're attempting to build more and more products that add value to our customers in the S system space. But that's generally the storage business focus. Within the company, we have three other business units that focus on compute and networking memory, as well as the embedded business unit, and then the mobile business unit. Talk about some of the big trends that you see. I mean, we've talked about for years, the all flash data center. We clearly see that in the customers that we work with. Some of the spinning disguise don't necessarily fully buy into that, but even they have been investing in flash technologies. What are you seeing? I tell you, there is no better time in my opinion than to be in the memory and storage industry. When you look at what the trends are that are coming out in time. If you go and you stare at how memory and storage has evolved, just going back into the 80s of the PC era, a $35 billion average size of a total market, you get into the mobile space. When mobile era started with smartphones, we were looking at a $62 billion ish. And then in 17, we cleared $120 billion in size of the market. And we actually see a lot of secular trends that are going to continue to take us forward. Couple of things that are particularly noteworthy for us. The first one is the emergence of artificial intelligence and machine learning and deep learning. We're going to hear quite a bit about it here at the event. But in terms of a value driver for the consumption of both memory, DRAM, as well as storage, we see it going phenomenally up in content in every server that's purchased out in time. That's one, I think with the evolution of 5G out in time, we're also going to see that smartphone devices are going to end up having more memory to add features like facial recognition we see today, becoming mainstream, multiple cameras that drives more DRAM content. But then also on top of that, storage is increasing. We're seeing even today a terabyte being put into some of the high end phones. We know that that's going to waterfall out in time. So I think if you look at this combination of what's happening both in the devices, you look at what's happening in the infrastructure, then you couple that with the processing that needs to happen, it's just an awesome time to be affiliated with memory and storage. Yeah, well, I've been following this, the NAND marketplace for the last almost 10 years, isn't it, more than that? And it's just broken through completely in the last two or three years. What are your thoughts about pushing compute closer and closer to that memory, adding to, for example, the SSDs, the capability of doing smart work in very, very close to where the data is originally going to be placed? It's a great area of quite a bit of R&D work that's going on right now. And I actually, I think, you know, I view this as kind of two stages. One is there's the proliferation of solid state, as you suggested, it's been coming over time. I actually see it increasing dramatically as we look forward. And one of the key technologies that I think is going to enable that is QLC. The fact that we're now at a point where we're putting four bits per cell into devices, SSDs are starting to show up, I think that just creates even more opportunity. And I'll talk a little bit about that in just a minute. I want to answer your direct question as to how that's changing with AI and ML. But I think the ability once solid state is prolific to be able to architect systems where you can actually have processing take place closer to the media is a very interesting area. It's right with a ton of research going on right now. People are just starting to implement it. I think there's quite a bit of potential sitting behind it. You know, our focus, of course, is we're deploying as quickly as we can on two vectors. One is how do we proliferate more solid state into the market as an industry? And the second is how do we add value when we build a solid state drive? So I think it's definitely very viable. Let's talk about the significance of QLC. David, your forecast early on were very aggressive in terms of pricing declines for flash. We kind of maybe got caught off a little bit surprised by the demand for it. But also the supply constraints kept prices up, okay? So it didn't actually happen as fast. How does QLC change that, Derek, and what's the significance of it? Well, the thing that I think is most exciting for us as micron is we actually ended up delivering the world's first QLC device. It put a terabit of data on a single die. This is unprecedented. But then in addition to that, what we did is we actually built a solid state drive called the 5210 Ion. This is a SATA drive. It's the world's first SSD built on the technology. And by being able to develop a solution early on, it allowed us to go engage with customers and find where the right workloads were where we could add the most value. QLC technology actually is perfectly aligned for super read-intensive, very read-intensive environments. And if you look at what's happening in the data centers, we're actually seeing more and more workloads move into more read-intensive workloads. And a good chunk of that is just because there's analytics going on. The data's being collected, it's being housed in one place, but as we've talked about quite a bit here at the event, we want to be able to deliver insight out of that data, which means we're going to be reading it quite a bit and massaging it and performing analytics on it. And what we're now seeing is what in the days of the past was a four-to-one read-to-write ratio. We're seeing as high as 5,000 to one and in some cases a million to one. So we get these heavily read-intensive workloads coupled with the technology that's optimized for it. It's more power efficient than what rotating media solutions offer in certain workloads. We're starting to see these tremendous values coming out of these early engagements that we're having with customers. And does that have implications for longevity or do you just make an assumption that the read-write ratio is still going to be more right-intensive in terms of ware leveling and things like that? How does it change the reliability, if you will, of the technology? Actually, the beauty is we're able to deliver an enterprise-class SSD with these read-write capabilities that are affiliated with these read-intensive solutions and we can fit within the workloads and the needs that people are talking about. So the drive-rides per day that are required in a machine learning infrastructure, we believe we can address with QLC. Same thing with Hadoop style clusters and stuff clusters. We've actually, as we've gone out and engaged each of our earlier customers, we're able to crank out reference architecture documents that we're now posting to our websites and we're describing how we can actually leverage this technology to allow us to, in some cases, well, better optimize where an SSD was used before, but in many, many cases, we're actually in the process of displacing hard disk drives. So what are the limits of this QLC? How many more bits can we add? How many more layers can we add? So it's actually a great question, David, in terms of what does a roadmap look like? I've been asked in the recent several hours what the longevity for NAND looks like and what I'll tell you is this. QLC NAND is just getting its start. What comes after that in terms of bits per sell, I don't think anybody's made any broad claims on, but from a layer stacking perspective, which is kind of the dimension upon which the industry is growing, for the foreseeable future, we see nothing that encumbers us from going substantially higher and higher in layer count. So I think it's going to be great for our industry because it's going to allow us to deliver more bits in a given device and hopefully that'll allow us to get into markets that historically we haven't been able to approach. If you think about the demand elasticity dynamic that occurs, when we start to bring more and more costs down, the number of applications open up. Not unlike the machine learning workloads I just mentioned or Hadoop workloads, we're starting to see more and more thirst and interest for replacing with solid state just because it's more power efficient, allows for a cost structure that's better and gives better performance to it. I'm fond of saying that data's plentiful insights aren't. You guys are a $30 billion company now. You're making some interesting announcements today that we're going to hear about a little later on that I won't divulge right now, but you're putting your hands in a lot of different places. When you're that size of a company, you can't help, but as you mentioned before, adding more value, becoming more of a systems focus. How do you help the industry go from just raw data to insights? What's your role in that? Oh, it's a phenomenal question and this is a major focus of the company, not just in our business unit, but across all of the different business units in the company. We have a huge focus on sitting down with our customers and getting closer and closer to understanding what their workload needs are, where their pain points are, and then working with them to find solutions. And the beautiful part about it is, as Micron, we're the only company in the world that can combine together a 3D cross-point set of technologies, a NAN set of technologies, a DRM set of technologies. We go sit down and talk about these challenges with those in mind, plus the emerging memories that we're developing to go develop better and better solutions. But after we're able to come to a solution, we put together a reference architecture and we deploy it broadly. We've been trying to squint through 3D cross-point and understand the right fit. It seems to us that one of the big advantages of Flash was it had this behind it, right? The consumer volumes, thank you Steve Jobs. It's unclear whether or not 3D cross-point will have that and maybe have the same sort of cost advantages, but at the same time, it sounds like there's new and emerging applications. Like I said, we're trying to figure it out. Have you guys figured it out yet? You're obviously betting big on the technology. Help us understand where the fit is. Sure, I think if I look back in time, just at the storage hierarchy alone, I don't think the memory hierarchy is any different. You have these portions of the market where you build out hard disk drives and we had DRAM before and SSDs came along and people started asking, not unlike several years back when we talked about the early parts. Hey, how big is this going to get? Cost structures may be prohibitive, but as innovation unfurl the more time and investment got placed into it, we found new workloads, new use cases, we were able to drive cost out and we ended up slotting in solid state drive squarely. I think this is another tier of memory and storage. That's a beauty of the 3D XP technology. There's both memory semantics and stored semantics that are available for use. I think we're still scratching the surface on the early days, but I love what we're seeing from the customer base that we're engaging and targeting in this space. People will pay up for that performance capability relative to Flash, they'll pay down relative to DRAM. Is it, are you seeing a great answer from like the hyperscalers for example, or is it, so maybe the industrial internet, where are you seeing the... It's fair, actually I think, it's probably reasonable to say that the challenges of inserting a new memory tier into a system requires new programming algorithms, new APIs and interfaces. There's a lot of ecosystem that needs to be there as well as not to mention you got to have an ecosystem to go put memory products into a server, for instance, or any other platform. I think we're still early days of enabling all of this. And I also believe we're going to learn more and more where the value of this sits as we put it out there in a cost-effective fashion. So I would say that people who control software environments are very, very well suited for this because they can take advantage of some of those challenges without having to have a whole ecosystem in place. I think there's going to be a continued ramp and acceleration as an industry to build out that ecosystem. Well, it's been amazing to watch Micron the last several years. I mean, the last several decades, moving from just a pure memory manufacturer to this diversified, you know, gorilla in this space. I mean, you guys are really, and an extremely well-run company. I mean, your financials have borne that out. You're really transparent to the street and have provided great guidance. And congratulations on all the success and looking forward to watching in the future. Well, thank you so much. It's a privilege to be part of the company and I really appreciate your time today. Ah, a pleasure, thanks for coming to theCUBE. All right, keep it right there, everybody will be back with our next guest right after this short break. You're watching theCUBE from Micron Insight 2018.