Appleton, Steven

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Appleton, Steven

Micron Technology, Inc.

Overview

When Steve Appleton became chairman and chief executive officer (CEO) of Micron Technology in 1994, his role was to guide the semiconductor manufacturing company through a turbulent time. With increasing competition from Japanese manufacturers and the company's management in turmoil, the then-34 year old Appleton provided the direction and leadership necessary to maintain Micron's dominance in the industry.

Personal Life

Steve Appleton grew up in Los Angeles, the son of a school teacher mother and a father who owned doughnut shops. He studied hard and graduated from high school as class salutatorian, but according to a profile by Peter Burrows in Business Week, he ran with a rough crowd. One friend reportedly died of gunshot wounds and others ended up in prison.

Appleton looked to Tennis as the ticket out of the tough neighborhood. By sheer guts and determination, Appleton made himself into a top high school player. His success on the courts led him to Boise State University (BSU), which he attended on scholarship. Competing for BSU in the Big Sky tennis tournament in 1982, Appleton broke his right hand. The next day, he cut off the cast and competed in the finals, finishing second in singles and winning in doubles. He taught himself to play left-handed to finish the season.

Today, Appleton is a fitness fanatic who can bench-press three 300 lbs. His daily schedule includes just four hours of sleep, but he schedules his long work day around 4:00 a.m. and 9:00 p.m. workouts in his gym. He also flies his own fighter plane and competes in triathlons, skydiving, and motorcycle racing. Appleton is divorced and is the father of two daughters. He is a member of the board of directors of the Semiconductor Industry Association and of St. Luke's Hospital in Boise, Idaho. He is a trustee of Boise State University and a member of the Semiconductor Technology Council.

Career Details

After completing his bachelor's degree in business administration at Boise State in 1982, Appleton joined Micron's graveyard shift in 1983. He started at $4.46 per hour on the company's 64-Kbit DRAM line. DRAM (Dynamic Random Access Memory) chips are the most common type of memory chip used in the computer industry. By the time Appleton began his career, many U.S. DRAM manufacturers had been destroyed by Japanese competition. Only Micron and Texas Instruments were still manufacturing the chips in the United States, and Micron, using a unique manufacturing process, had established itself as the low-cost producer.

Appleton's drive propelled him from the production floor to the board room in just 12 years. On the way, he worked as production manager, director of manufacturing, and vice president for manufacturing.

He became president and CEO in one of the executive upheavals for which Micron has been notorious. In 1994, company cofounder Joe Parkinson, along with his chief operating officer and chief financial officer, left the company for "personal reasons." Industry analysts suspected friction between Parkinson and Jack Simplot, a potato farmer whose $150 million investment in the company made him Micron's largest single investor.

The announcement that Appleton would take over management of the company surprised Wall Street, according to Idaho Business Review, and indicated that there might be a serious rift between shareholders and management regarding the future direction of Micron. But as stock analyst Thomas Thornhill noted in Idaho Business Review, "The silver lining in all this is that Steve came up through the operating side of the company, and has great depth of operating experience, and has day-today responsibility for the principal operating unit." According to the Seattle Times, workers cheered Appleton's ascension, saying that he knew the company from the ground up and would be the right person to keep Micron competitive in the industry.

According to Business Week, Micron's workers admire him for his work ethic, enthusiasm, and willingness to hear all sides of an issue. As a line manager, it is said, he once mediated a worker's complaint with his boss by interviewing all 22 workers on the shift, and then moving the supervisor. He also introduced a novel, but popular, pay plan. Micron employees are given a lower base pay than they would receive at other companies, but they take home 10 percent of the company's profits. Thus, the payroll drops in a bad year, limiting layoffs. In a good year, workers share in the bonanza.

When Appleton assumed leadership of Micron in 1994, he announced that the company would continue the basic strategy that had brought it success. It would continue to emphasize quality and low cost, and to control as much as possible in the production process. By also focusing on its workers, the company ensured a loyal and skilled labor force.

Appleton's widespread popularity throughout the company ultimately saved his job. It was the support of 20 angry and frustrated friends and colleagues that set in motion his recall when he was dismissed by Micron's board of directors in January 1996. Company executives demanded that the board rehire Appleton and insisted that the board end its autocratic interference in the company's management. According to Fortune's Andy Sewer, the board, recognizing it had fired the best man to run Micron, was in a no-win situation unless it acted immediately to rehire Appleton. As part of his agreement to return, Appleton obtained a promise that the board would cease its day-to-day oversight of the company and later saw to it that many of his rivals left the company.

By 1997, Micron had topped Japanese and South Korean companies to become the largest unit-volume DRAM producer in the world. Converting to smaller geometries and larger wafers in the production process, enabled the company to beat its competitors. Micron produces some of the semiconductor industry's smallest die sizes: all of Micron's DRAMs are manufactured in eight-inch wafers at .25 or .21 micron (one-millionth of a meter) line widths. Micron uses a unique intelligent burn-in and test system as part of its stringent quality assurance and testing process on every device it makes.

In late 1997, Appleton announced that Micron would devote 10 percent of its wafer starts to 64-Mbit chips. His announcement made it clear that Micron intended to remain competitive in the future of the memory chip market. "Micron will be there when the 64 Meg takes off, and we will become the market leader—just as we have in 16-Meg," Appleton told Jack Robertson of Electronic Buyers News. He also announced that the company would spend up to $1 billion in capital investment in fiscal 1998.

Social and Economic Impact

Micron has remained a success due to Appleton's unique business strategy. Under Appleton, Micron has survived the fierce competition in the DRAM industry by focusing on quality and low cost. The company's main facility is located in Idaho, where costs for land, facilities, and labor give it a competitive edge. Micron has been very conservative about expanding operating facilities. It runs its plants at about 90 percent capacity while other manufacturers run at 60 to 70 percent, enabling Micron to keep production costs low. The company began construction of a $2.5 billion test facility in Lehi, Utah, in 1995, but has decided not to open the plant until market conditions warrant.

In addition to its sound business strategy, Micron has served as an example in its commitment to environmental issues. In 1996, the company received ISO 14001 certification—an internationally recognized standard for environmental management. Micron's environmental team focuses on reduction of hazardous chemicals in the manufacturing process and on recycling. In 1997, Micron earned the U.S. Environmental Protection Agency's Evergreen Award for Pollution Prevention. EPA regional administrator Chuck Clarke praised award recipients as "models of how American businesses can achieve economic prosperity while not jeopardizing the environmental quality of future generations."

Chronology: Steven Appleton

1983: Joined Micron Technology as a factory worker.

1994: Appointed chairman and chief executive officer of Micron.

1996: Fired and re-hired as chairman and chief executive officer.

1996: Micron received ISO 14001 certification for environmental standards.

1996: Joined team to negotiate U.S.-Japan Semiconductor Agreement.

1997: Micron became world's largest unit-volume DRAM producer.

1997: Micron earned U.S. EPA Evergreen Award for Pollution Prevention

Appleton was appointed to the National Semiconductor Technology Council by President Clinton. In 1996, Appleton was one of three SIA executives involved in negotiating the U.S.-Japan Semiconductor Agreement. Appleton has been instrumental in ensuring a place for U.S. companies in the computer age.