Tech investors may already know a few things about Micron Technology (NASDAQ:MU), which crushed the market by rallying nearly 200% over the past 12 months. They likely know that it's one of the world's top memory chip makers, that it's been partnered with Intel (NASDAQ:INTC) for years, and that it was nearly acquired by state-backed Chinese tech giant Tsinghua Unigroup for $23 billion in 2015.
Investors may also know that Micron's rally was sparked by tightening demand and rising memory chip prices across the market. But today, I'll examine five lesser-known facts about Micron which may change your perception of this memory chip maker.
1. It didn't always make memory chips
Micron was founded in Boise, Idaho in 1978 by former Mostek engineers Ward Parkinson, Dennis Wilson, and Doug Pitman. Joe Parkinson, Ward's twin brother and Wall Street lawyer, eventually joined as the fourth co-founder and became the company's first CEO.
Micron was initially run from the basement of a dentist's office, and served the founders' former employer Mostek as a semiconductor design consulting company. However, Micron's initial business model of relying entirely on Mostek for its revenue crumbled after United Technologies (NYSE:RTX) acquired Mostek and axed the contract.
The loss of its only customer forced Micron to pivot toward chip manufacturing in 1981, and it started producing 64K DRAM chips after the completion of its first wafer fabrication unit.
2. McDonald's was one of its earliest investors
As a start-up, Micron initially struggled to secure financing for two reasons -- the memory chip market was dominated by bigger Japanese chipmakers, and the only U.S. chipmakers which could still compete were based in Silicon Valley and Texas, not Idaho.
But instead of moving, Micron stayed put and secured the backing of big Boise investors, including billionaire potato farmer John R. Simplot. Simplot's farm was the biggest supplier of potatoes to fast food giant McDonald's (NYSE:MCD). Simplot's big investment attracted the attention of McDonald's, which followed suit and invested tens of millions of dollars in the scrappy start-up. More than three decades later, Micron remains based in Boise.
3. It emphasized quality over quantity
Facing off against Japanese chipmakers -- which controlled 70% of the memory chip market at the time -- was a daunting task for Micron. But the company achieved a technological breakthrough in early 1983 by dramatically reducing the size of its chips, making them roughly half the size of Japan's leading chips and a third the size of Texas Instruments' comparable chips.
Micron's smaller chips were also cheaper to manufacture, which countered its bigger rivals' scale and helped it carve out a niche in the memory chip market. That impressive growth enabled the company to go public in 1984.
4. It believes that Chinese chipmakers could crash the market
Micron has gone through several acquisition-layoff cycles coinciding with the cyclical demand for memory chips. Memory prices are currently rising due to a global shortage of chips, but Micron believes that Chinese chipmakers could crash the market in the near future.
Speaking in Taiwan last December, CEO Mark Durcan warned that if China spends "the money that they say they are capable of spending," they can create an "oversupply" of cheap chips. "Is it a concern or something to think about?" Durcan rhetorically asked. "Absolutely."
5. It once sold CMOS image sensors
Back in 2006, amid one of its acquisition streaks, Micron acquired Avago Technologies' (now known as Broadcom's) image sensor business. In 2008, it launched Aptina, a dedicated unit for those assets, and spun it off as a private company the following year.
Micron retained a stake in Aptina, which continued making image sensors for many of Nikon's high-end cameras. The company was eventually acquired for $400 million by ON Semiconductor in 2014.
The road ahead
Micron's evolution from a chip design firm into a memory chipmaker backed by ranchers, farmers, and McDonald's, is a fascinating one. The company is now one of the biggest DRAM and NAND chip manufacturers in the world, and its next-gen memory projects with Intel could keep it ahead of the tech curve.
Micron's future growth could be volatile due to the cyclical nature of the memory market, but there are still plenty of chapters in the company's history which have yet to be written.