Apple is turning more to giant US chipmaker -- no, it's not Intel

Micron Technology is a very big chipmaker that's closer to Apple than it ever has been.

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Micron Technology

Micron Technology doesn't get a lot of attention, but it should. Especially because it's one of Apple's largest silicon suppliers.

The Boise, Idaho-based company flies under the radar much of the time in the non-investor community. But it's the second largest DRAM memory chip company in the world -- outranked only by behemoth Samsung -- and third largest chipmaker overall in in terms of wafer capacity, even beating Intel.

And it's now a lot closer to Apple after it completed the $2 billion acquisition of Japanese memory maker Elpida last year. Why? Because Apple uses lots of Elpida memory in its iPhone and iPad products. Most recently, that means the iPhone 5S and iPad Air.

Apple is expected to use Micron's newest DDR4 memory chips in upcoming products. DDR4 will be faster and more power efficient than the current DDR3 technology used widely in PCs, tablets, and smartphones.

Memory capacities will increase too. Future iPads and iPhones -- and whatever new mobile products Apple dreams up -- will likely use more system memory, as designs demand more horsepower (For example, Apple competitor Samsung uses 3GB of memory in its Samsung's Galaxy Tab Pro 12.2).

So, how big a supplier is Micron to Apple? Well, the last time Micron mentioned Apple was in its 10Q for the 2014 first quarter (ending November 30, 2013). Apple was listed as one of Micron's "more than 10 percent of revenue customers," the chipmaker said to CNET in response to an email query.

With Micron's revenue reported at about $4 billion for the quarter, "more than 10 percent" could be a very large figure.

And as the blog The Obsucre Analyst points out, Micron received "a mystery payment" of $250 million from one customer that was "reported during their Q1 2014 conference call and their 10Q [that] indicates that the payment was 'for product to be supplied through September 2016.'"

Micron declined to comment on who that customer may be. But there is precedent for Apple paying very large sums to Micron. In 2005, Apple paid $500 million to a Micron-Intel joint venture in order to secure flash memory supply.

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