The Simplot Saga: How America’s French Fry King Made Billions More in Semiconductors (Fortune, 1995)

February 12, 2012, 7:00 PM UTC

Editor’s note: Every Sunday, Fortune publishes a favorite story from our magazine archives. This week, we look back at the wild and wooly tale of billionaire J.R. Simplot and the Idaho chip manufacturer he backed, Micron Technology. Micron’s CEO Steve Appleton died when a small plane he was piloting crashed earlier this month in Boise. Fortune Managing Editor Andy Serwer wrote the piece in late 1995 and he remembers that Appleton, then 35, seemed to have a need for speed. A picture in the article shows Appleton without a helmet making a jump on a dirt bike. Appleton’s tragic death is a sad chapter in Micron’s incredibly cinematic story.

Micron Technology is one of the Big Board’s most active stocks. Behind it is the most active octogenarian spud farmer in Idaho.

By Andrew E. Serwer

FORTUNE — The cream-colored Lincoln eases down a dirt road along an Idaho feedlot. Cowboys spot the car’s MR. SPUD license plates and yank the reins of their horses to stare. At the wheel is their boss, John Richard (J.R.) Simplot, the remarkably vital 86-year-old billionaire. The old man stares right back at the cowpokes and nods with approval. Why shouldn’t he like what he sees? He owns everything in sight: the Bunyanesque feedlot, the huge complex of potato-processing plants, and, beyond, miles and miles of farmland. “It’s a big moose,” he says. “Awesome.”

As with any megafortune, Simplot’s wealth was built from a few simple but revolutionary ideas, much sweat, and a generous glossing of luck. The details of his experience, however, are singular in the extreme. To begin with, Simplot is really the last man to have hewed a great fortune from the preindustrial West: Starting in the 1920s in southern Idaho’s Snake River basin, he built a potato-based agricultural empire that, among other things, supplies McDonald’s with more than 50% of its French fries. Now, amazingly, he is emerging as one of the single biggest winners in semiconductor technology. Through mind-boggling gains in the stock of Micron Technology, his high-tech fortune has suddenly ballooned to the point where it is clearly exceeded only by Bill Gates’ and Paul Allen’s. Besides being a wild ride full of bigger-than-the-sky personalities, intrigue, and potfuls of instant money, his life begins to look like a metaphor for the history of American business in this century-a man makes a fortune practically in the era of Manifest Destiny and then makes another in the age of the Internet. It seems impossible.

But it’s true. Simplot’s stake in Micron, the Boise chipmaker, has grown more than $2.5 billion, to $3.4 billion, in 24 months. That’s $5 million every working day. You may have noticed Micron on your newspaper’s business pages. Its stock nearly always on the NYSE most active list-in fact, only Teletonos de Mexico, Ford, and Compaq have had more shares change hands this year than Micron. Depending on the vagaries of the equity markets–and lately Micron and other tech stocks have fallen somewhat–the value of the 21% of Micron that Simplot owns or controls is on par with the stockholdings of Intel’s Gordon Moore, Oracle’s Larry Ellison, or H-P’s David Packard and William Hewlett.

Unlike those men, though, Simplot never finished the eighth grade, and he accumulated half his fortune after the age of 84. (Actually, his Micron stock would be worth over $4 billion except that the company’s shares are down 25% since September. But, hey, they’re up more than sevenfold since November 1993.)

Like most overnight success stories, Micron’s took years of toil, blind faith, and, for a long while, good money after bad. Simplot was there almost from the beginning. He didn’t just sneak in two years ago for the joy ride, nor was he some passive Dutch uncle. He bankrolled Micron, propped up the company when it was on the brink, and helped push it over the top. Today, Micron is a major provider of chips to Compaq and other PC makers. It’s also incredibly profitable.

There is bickering in Boise over who really deserves credit for the success of the memory chip manufacturer. Simplot, of course, wasn’t the technical brains, nor was he the day-to-day CEO. But he was the sugar daddy. “Fella,” Simplot says, “Micron is my baby.”

Simple words, but perhaps irksome to one of the company’s founders and a former CEO, Joe Parkinson, who clashed with Simplot over financial and fiduciary matters at Micron. These differences came to a head last year, FORTUNE has learned, after the CEO and Simplot locked horns over whether Simplot was divulging what Parkinson considered inside information. Parkinson asked Simplot to cease. He also made a motion that Simplot be removed from the board. When Simplot said Parkinson’s charges were groundless and didn’t step down, Parkinson resigned. Micron apparently felt no ill effects. The board installed as CEO a then 34-yearold named Steven Appleton, who had started out working in the company’s clean rooms at $4.46 an hour.

Micron’s boom has benefited Boise tremendously. In fact, you could say this town of 347,773 is in the midst of a Chip Rush. Boise is now the fifth-fastest-growing city in the U.S., thanks largely to Micron and no thanks to other local businesses, like Morrison Knudsen, which has imploded, and a Hewlett-Packard disk-drive and printer plant that has cut its work force. Micron has created 8,000 jobs and dozens of millionaires, and upon a lucky few has bestowed truly huge fortunes. The latter group includes members of Micron’s board, ranchers, farmers, and developers- friends of Simplot’s. They are powerful landowners–the state’s elite who each now happen to own $50 million to $100 million of Micron stock. Some mornings you can find them at Burns Bros. truck stop off Interstate 84 having breakfast at 6 A.M. Last one in gets stuck with the tab.

And Simplot is their aged king. Up in the private card room of the Arid Club–where none of the new women members dare tread—J.R., or Jack, as they sometimes call him, holds court. Every afternoon he drives his Lincoln five blocks over from his office in downtown Boise, parks in the handicapped spot out front (“No cripples here anyway”), and unlocks a special door that leads directly upstairs. “Hey, boys,” he says, walking in, a little stiffly now after his second hip replacement surgery last April. “How about a game?” And the boys oblige, gin rummy or bridge, for a couple of hours.

At an age when most of us would be thrilled to push a shuffleboard stick, Simplot is the éminence grise behind his private Simplot Co.–which has potato, ranching, chemical, and mineral interests–as well as Micron. Both do close to $3 billion in annual sales. Yes, his hearing and memory are diminished–he’s not great on the phone. Yes, his driving is a little shaky–he parks wherever he chooses, which drives truckers at his plants crazy. And, yes, he looks better in a hat. But his range of mental and physical activity is amazing. He neither smokes nor drinks and is an unflappable optimist.

Simplot just returned from a two-week trip to Australia to inspect 11 food plants he recently bought for $300 million. He plays golf–21 handicap–and skis. He recently addressed the Federal Reserve Bank. Accompany J.R. through one of his potato-processing plants and you soon find yourself trailing him across slop-slippery floors, up and over metal scaffolding blasted by starchy steam, and underneath clickety-clack packaging lines. “J.R.,” says everyone who knows him, “is incredible.”

Officially, Simplot retired in April 1994, but each morning he drives the Spudmobile down from his home in the foothills—you can’t miss the 50-by-30-foot American flag on the 100-foot pole out front. He takes an elevator up to the 13th floor of the Capital Centre building on Main Street. There, in an office filled with pictures of family and the requisite Remington-style bronzes, he meets with the men who run Simplot. He’ll query them about cattle and potato prices, but clearly his new love is technology and Micron. “Fella, we got something special in Micron. We’re leading the world. It’s real. It’s not just a bunch of bullshit. We’re rolling out the chips,” he says, eyes widening.

Simplot has a growly, rolling, almost theatrical delivery–George C. Scott would do well as a movie version–that tends to rise in a crescendo at the end of sentences. It could be a radio voice, which isn’t surprising, since one of his best friends was the late broadcaster Lowell Thomas, whom he met years ago at Averell Harriman’s cottage at Sun Valley. Simplot stretches his solid 5-foot 10-inch frame and pulls out a little wallet-size display of Micron’s chips. “On this little chip we can get 16 million bits of information. That’s 1,000 to 2,000 pages of information, and we can get it off the chip in a millionth of a second.”

Okay, but what’s the connection? How is it that an 86-year-old farmer got mixed up in megabits? First, calling Simplot a farmer is like calling Bill Gates a college dropout. And second, a look at Simplot’s career shows that he has always harnessed the power of machines and technology to make quantum leaps in business. Simplot was born in Dubuque, Iowa, in 1909 and moved to Idaho when he was an infant. His family settled on the south bank of the Snake River and cleared the land to farm. At 14, he left home, dropped out of school, and built his first machine. It was a giant boiler for cooking up scrap potatoes and horse meat–from wild horses he shot out on the desert–to feed his hogs. The boiler helped him prepare mass quantities of food through a tough winter, and in the spring he sold his pigs for a profit of some $7,000, a small fortune at the time.

Steven Appleton started out working in Micron's clean rooms and became CEO at age 34.

The next machine that grabbed Simplot’s attention was an automatic potato sorter. Then still in his teens, Simplot and a partner ordered one of these machines. Simplot owned a 50% share and won the other half in a coin toss. That machine gave him a monopoly on the fast sorting of potatoes in Idaho, and Simplot was on his way to his first million. Another technological breakthrough: food dehydration. On a trip to California in 1940, Simplot saw an old prune drier adapted to drying onions. He ordered one and used it to create dehydrated potatoes, which fed the troops in World War II. That device helped make him an even wealthier man.

His next breakthrough was successfully freezing potatoes, which had never been done until one of Simplot’s engineers discovered that the trick was blanching and compressing. That technology led to a deal with Ray Kroc in the mid-1960s for Simplot to sell frozen French fries to McDonald’s , which made him a billionaire.

Micron was founded by a group of engineers, including one Ward Parkinson, who were joined by Parkinson’s twin brother, Joe, a lawyer. Raised in southeastern Idaho, the Parkinsons–who married and were divorced from sisters–worked potato fields and delivered spuds to Simplot warehouses as kids. They excelled in school and attended Columbia University in New York. After a decade of wandering and various jobs, the twins ended up in Boise, Ward doing contract engineering for Texas chipmaker Mostek and Joe doing dreary, small-city legal work. Ward and his engineering buddies had decided to form Micron in 1978. They set out to create a new, smaller version of the 64K DRAM chip, which is a memory chip that holds some 64,000 bits of information. (Joe ended up helping out so much he joined Micron and became head man.) One major problem: money. They needed sacks of it. The Parkinsons were introduced to Allen Noble, a farmer and inventor of irrigation systems, and to a couple of other potential investors, Tom Nicholson and Ron Yanke. The three men anted up $100,000 each-the Parkinsons pitched in too. Later they went to Simplot and his big bucks.

And just who are these founders and insiders? All Idahoans of the old school. Take Nicholson and Yanke, who both became board members (though Yanke later left) and played significant roles in nurturing the company. Frontier-friendly and best friends since Boise High School–Nicholson was student body president, while next to Yanke’s yearbook picture it reads, “Lanky but never lonesome”–they each own about a million shares of Micron stock today.

One recent morning at Burns Bros. truck stop, Yanke and Nicholson arrive around 6 A.M. to eat and chat with the boys, including Bill Deasey, who preceded Bill Agee as CEO of Morrison Knudsen, and Harry Bettis, who owns some $85 million of stock in West One, Idaho’s biggest bank. These are conservative Republicans, though politically distant from the off-the-grid types who inhabit the state’s deep woods. Simplot, who says he’s been offered and has refused two U.S. Senate seats, says he stays out of active politics since he has to get along with politicians from both parties.

After breakfast–a few order buffalo burgers and eggs, with hot sauce—Nicholson and Yanke hop into Yanke’s truck and head over to the airport. Hearing that Micron stock is down two points, Yanke flips on his Motorola cell phone and calls his broker. “Get me 10,000 shares of Micron.” Done deal. A $750,000 stock trade out of a 1.5-ton Dodge Ram. Then it’s up in Yanke’s Cessna Turbo 206 for a little elk spotting. (Is this their own private Idaho, or what?) “There’s two, Ron,” calls Nicholson. “No, Tom, those are cattle,” replies Yanke. “Turn the plane around, Rory, and let’s see.” In a blink the pilot twists the Cessna sideways, 100 feet off the tall timber just west of the Sawtooth Range at 125 miles per hour. “Barf bags are behind the seat,” says Nicholson.

Ron Yanke, in front, and Tom Nicholson, Micron multimillionaires, take the waters in Jackpot, Nevada.

The pair fly up to the town of McCall, on Payette Lake, where many of Idaho’s power brokers–including Simplot and Yanke–have homes. Nicholson recalls a flight he made in the very same airplane with Micron co-founder Ward Parkinson back in the early 1980s when the company was struggling. Simplot’s people wouldn’t let him put in another penny, and Nicholson and Parkinson flew up to meet with Bill Agee, then CEO of the auto-parts company Bendix. (Agee was accompanied by his then-assistant Mary Cunningham.) “We offered him 50% of Micron for about $1 million,” says Nicholson, who has known Agee for years. “And he said, ‘It won’t work: No.’ ” Much has been made of Bill Agee’s boneheaded moves. That 50% stake is now worth some $7.5 billion.

But for Micron in the 1980s, Agee’s rejection was just another chapter in a Russian novel of nyets. “We flew down to Dallas to talk with L.J. Sevin, head of Mostek,” recalls board member Allen Noble. “And he said, ‘You’ll never make chips up there, never.’ ” In an exercise of sheer hubris, the Parkinsons pushed ahead to build a fabrication plant (called a fab) while they were still designing their chip. Bankrolled to a large extent by Simplot, they completed the fab in 1981 for between $7 million and $10 million, a tenth the cost of a typical facility. The company turned out its first 64K DRAM in 1982.

Micron went public in 1984. Terrible timing. Eleven U.S. firms would soon stop making DRAMs domestically–all except IBM, which mostly used the chips internally, and Micron–because the Japanese had broken into the market and crashed prices. “They dropped the price of DRAMs from $2 to 25 cents and kept it there for 18 months,” roars Simplot. “They were dumping!” At various points the company was in deep trouble. But eventually the Reagan Administration slapped a $300 million tariff on Japanese chips. Next, Micron was hit by a slowdown in the chip business. By 1990 the company had $333 million in sales, but profits of only $5 million.

“We learned from those years,” says Steve Appleton, the motorcycle-riding CEO. “We learned that to survive, we had to become the lowest-cost producer.” Rather than focus on cutting-edge technology and then look for an application, engineers at Micron became experts at the process of making chips, especially a technique called shrinks. The smaller a company can make a chip, the more profit it can make, since tinier chips allow a company to produce more chips per batch. Chief technologist Tyler Lowrey, whom several board members call the company’s franchise player, explains that Micron has been known more for its expertise in manufacturing chips than for actual chip design: “Our hallmark has been process technology. We’ve been high volume. We don’t look for little niches.”

So while the rest of the industry is now focused on making chips with 16 megs of memory (which can hold some 16 million bits of information), Micron still mostly churns out four megs. While most other companies have converted from six-inch to eight-inch wafers, Micron is just now switching over. Not that the company doesn’t keep up with the latest technology. But it makes changes conservatively, carefully weighing the costs.

High volume, low cost is a familiar concept to Simplot, who’s used to doing battle in tight margin commodity markets. But if Simplot didn’t like the company’s strategy, he’d probably change it. He may not be in control of scheduling shifts, but he does call the big shots. As one card player at the Arid Club bluntly puts it, “The board runs the company.” Initially, Appleton takes issue with that notion. “Our board, like any other board, decides what the company tells the public. It decides what executives are paid. And it determines what we do with the stock.” But when pressed, he admits that Micron’s board is “slightly different.” Major understatement.

During Micron’s crisis years, the board began meeting every Monday morning at Elmer’s Pancake House. It’s a habit that stuck like syrup to a napkin. Even though the company now has billions in revenue, the board still gathers at Elmer’s–where two ceramic pigs stand guard on top of a rotating cake display–once a week at 5:45 A.M. Get there after six and Simplot will cock his head and ask, “What’s the matter, did you sleep in?” For breakfast Simplot passes on the short stack (which isn’t bad) and orders a bowl of raisin bran. He’s known to steal a few strips of bacon from the plates of other board members. Does this breakfast club really conduct serious business? “We go over everything,” says Appleton.

Perhaps that’s the kind of stifling oversight that precipitated the falling out between Joe Parkinson and Simplot. That, and the coincidence that both of them are as hardheaded as mountain goats. It’s been over a year since Parkinson–who’s now CEO of Integrated Information Technologies, a videochip company in Santa Clara, California–and Micron parted ways, and so far both sides have maintained a remarkable silence. But FORTUNE has pieced together what occurred. “You have to understand they were two extremes,” says Appleton. “Joe Parkinson always liked to prepare for the worst, while J.R. Simplot is an eternal optimist.”

That congenital divergence was reflected in nearly every decision the two men tried to make. Simplot says that Parkinson’s communications to shareholders were unnecessarily pessimistic and that Parkinson would sell his Micron stock instead of hanging on to it. “I offered him a $50,000 loan several times to buy stock and he refused it,” Simplot says. (Not that Parkinson needed to borrow $50,000 from Simplot.) Another divisive issue, Simplot says, was whether to expand the company, and if so, how to finance it. Says one Boise insider: “Joe was very suspicious of the markets. He wanted to hoard the company’s profits and issue stock to pay for any new fabs. ” Obviously a strategy that diluted the stock was not going to find favor with Simplot.

But there’s another side to the story. Sources on the board say Parkinson believed Simplot was talking up the company to his buddies down at the Arid Club and perhaps to Wall Street. In the process, they say, Parkinson said Simplot revealed insider information. Parkinson, wary of shareholder lawsuits–the company was sued in 1989–or an SEC investigation, had Simplot sign a highly unusual document in February 1993. This “indemnification ” document–a copy of which FORTUNE has obtained–states that “Simplot will not disclose to anyone not employed by Micron any proprietary information about [Micron] … ” And, “In the event Simplot breaches the foregoing, Simplot will defend … hold harmless, and indemnify Micron …”

In October 1993, Simplot sent a letter to the Wall Street Journal talking up Micron’s stock. Not knowing whether the Journal would print the letter–it ultimately didn’t—the company felt compelled to issue a press release stating that “the letter is a personal statement of Mr. Simplot,” that some of his comments were “factually incorrect,” and that “Micron disavows any forecast of earnings.” Meanwhile, Parkinson confronted Simplot about his loose talk, but Simplot–who has run a private company his whole life–said he wasn’t sure he had revealed any numbers and that anyway he was not speaking for Micron and would damn well do as he pleased.

This wasn’t the first time Simplot’s business conduct had been questioned. In one of the largest scandals ever to hit the commodity markets, he was charged with manipulating the potato futures market in 1976. Basically, Simplot sold short potato futures, some say trying to depress prices. Instead of buying back contracts to cover his position, he let them expire. When those who held the long contracts demanded payment, Simplot sent them potatoes–though not Maine potatoes as the contracts stipulated–instead of cash, setting off an eight-year legal battle. Bottom line: Simplot was barred from trading for six years, paid a $50,000 fine, and settled a civil suit for $1.4 million. In 1977, Simplot was charged with tax fraud for failing to report more than $1 million in corporate income and claiming over $250,000 of false personal and family deductions. He pleaded nolo contendere and paid two $20,000 fines.

The conflict at Micron came to a head in September 1994, a week before the company was set to release yearly results. Over the weekend of September 17, Parkinson got a call informing him that Simplot again was spreading what Parkinson considered insider information–in this case Micron’s year-end earnings to the penny. On Monday, September 19, Simplot skipped the meeting at Elmer’s and drove out to the airport with his wife, Esther, to fly one of his Hawker jets to Canada for business. At Elmer’s, Parkinson told the board he wanted a special meeting that morning in the privacy of Micron’s boardroom to discuss the Simplot situation. Simplot was called and told of the meeting as he was about to board his plane.

Joe Parkinson, right, who resigned as CEO, and twin brother Ward were among Micron's founders.

Simplot quickly drove the three miles over to Micron. When he arrived, the mood was somber. Board members say Parkinson asked Simplot if he was divulging insider information. Simplot said he didn’t believe he was. Parkinson said he could no longer serve with Simplot on the board. Parkinson then made a motion that Simplot not stand for reelection to the company’s board. But no one seconded the motion, and it failed. Simplot recalls reminding Parkinson of his controlling interest in over 20% of the stock. “Has it really come down to this,” Simplot asked, “that it’s either you or me?” It had. “I’m not leaving,” said Simplot. So Parkinson and two allies, chief operating officer James Garrett and CFO Reid Langrill, resigned. It wasn’t the first time Parkinson had walked. Years earlier, Simplot lost his temper. “You’re fired,” he said to Parkinson. “You can’t do that,” responded Parkinson. “Then get out of my building,” J.R. growled. And Parkinson did. But this time Simplot was shaken and held his tongue.

Parkinson insists it was only Simplot’s leaking confidential information and denying he did so to the board that caused him to leave the company.

Insiders acknowledge Parkinson’s contribution, but many say privately that he could be difficult to work with. His twin, Ward, left the company in 1989 after some serious head butting. Most won’t comment on the record other than to compliment Parkinson’s successor, Steve Appleton. For instance: “Steve is someone who really listens,” says Gene Cloud, Micron’s head of marketing.

Others say Simplot is the bad guy. He’s a manipulator, they claim, who hypes Micron’s stock. One board member says he sometimes cringes when Simplot starts talking during shareholder meetings. Simplot recently told FORTUNE: “They might not want me saying this, but it’s my opinion. I think Micron is going to earn $12 a share next year.”

Certainly, Simplot has his demons. His older sister Peggy lives back in south-central Idaho, but he doesn’t see or talk about her much. And his son Richard, who had battled alcoholism, died of diabetes in 1993. Except for his daughter Gay, his other children, who are all on the Simplot board, don’t seem to have anywhere near the same business acumen he does. His second wife, Esther, a classically trained singer in her early 60s, has preoccupations of her own. In 1991 she hired a mysterious Russian emigre to run the Ballet Idaho troupe–he left the company suddenly in 1993. In mid-September the nude and strangled body of the emigre’s wife was found in some brush down the hill from the Simplot house.

But Simplot waves off all this unpleasantness. Personal tragedies, the feds, willful CEOs, lawsuits–Simplot seems to just brush them aside. With Parkinson gone, he has moved to push Micron harder.

The company is expanding full bore, funded by internally generated cash, of course. Last fall Micron announced plans to build a new $2.5 billion fab complex in a to-be-determined location. That set off the usual speculation and courting by states and municipalities.

By all accounts the company would have been content to stay in Boise–there’s nothing but acres of sagebrush surrounding its facility–but for a nasty intrastate squabble. Micron, which already employs 1,000 engineers, wanted to build its new plant near an engineering school to help supply it with a pool of trained labor. Boise State, mostly a commuter school, has no engineering program, but the University of Idaho, 220 miles to the north in the otherwise low-tech hamlet of Moscow, does. Would the state be willing to move the engineering school, or let Micron help underwrite one at Boise State? Negative on both counts. Even with Micron, the Hewlett-Packard plant, and Zilog, another thriving chipmaker, in Boise, the state refused to move the school and made it impossible for Boise State to run an accredited program. Simplot was livid.

Not surprisingly, Micron announced the plant would not be built in Idaho but in Oklahoma, Nebraska, or Utah. Still, Simplot wanted to give it one more shot. On the morning of February 20 of this year, he demanded that a special joint meeting of the legislature be convened (that day!) so that he could address the lawmakers on the engineering school brouhaha! The lawmakers agreed to listen to him that afternoon in the statehouse’s largest hearing room. Despite a half-hour appeal by Simplot, the upstate forces wouldn’t change their minds. So on July 1, Micron broke ground in Lehi, Utah, at a site 20 miles equidistant from the University of Utah’s and Brigham Young’s solid engineering schools. What happened to Nebraska? Says Simplot: “Well, Warren Buffett called me up and talked to me for about 20 minutes trying to convince me to move the plant down there. He’s a nice fella, but we just decided on Utah.”

Micron hasn’t exactly given up on Boise. The company is spending $900 million to expand its 1.8-million-square-foot headquarters. Every room, clean or otherwise, is buzzing with the business of making chips and is simultaneously expanding. Chipmaking equipment is so expensive and becomes outdated so quickly that shifts must work 24 hours to amortize. In one 2,000-square-foot space, dozens of $2.5 million chip testers are being installed. Half a mile down the road from Micron, a brand-new housing development–put up by guess who–is open for business. In a quirky television commercial, Simplot looks into the camera and barks, “You young people … get a piece of the action!”

He may never make it onto a postage stamp, but Simplot has made his mark.

The 64-megabit question: Is Micron moving ahead too fast? The Idaho Statesman recently reported Micron is set to build another new plant in Ireland. Certainly, demand for DRAMs can’t grow much faster. Worldwide semiconductor sales are expected to grow an amazing 40% this year, according to the Semiconductor Industry Association. The market for chips has become humongous. Micron, which has only a 5.5% share, could do $5.5 billion in sales in fiscal 1996 (which ends in August). The diversified Asian giants–Samsung, Hitachi, NEC, and Toshiba–control over 40% of the market, though much of their production is for internal use.

Right now Micron’s profits are fat indeed. Net margins are over 28%. Prices for chips, which usually decline 30% annually, have risen or held flat for three years. Driving demand for Micron’s chips is the boom in PCs, which need increasing amounts of memory. Simplot, who doesn’t even own a computer (“Hell, boy, I came before the goddamn typewriter”), was recently given a demonstration of Windows 95. His assessment: “I love that program. It uses all kinds of memory.” But will demand for PCs hold? Over 50 fabs are under construction around the world right now–including one by Taiwan’s Chia Hsin Livestock–which will eventually depress prices.

A few security analysts have expressed concern over possible declines in chip prices, though they haven’t cited any weakness in Micron’s business. Fidelity Investments, which owned 26 million shares (12.7%) of Micron’s stock in January, has cut back to 18 million shares (8.9%) as of October 1. And so the stock has dropped 25% in six weeks. At its high on September 11, Micron had a market capitalization of over $20 billion. That’s bigger than Texaco’s. Even today, at nearly $15 billion, Micron’s market value is greater than that of Sara Lee or Merrill Lynch. Simplot isn’t at all concerned about the stock price: “Hell, I’d buy more today, but my broker at Merrill Lynch won’t let me. Says I have to diversify.”

Micron bulls point to the company’s tremendous profitability and its nearly debt-free balance sheet. They argue that Windows 95 upgrades, plus strong demand from consumers, plus overseas growth, will keep chip sales and margins strong for the foreseeable future. Yes, they say, new fabs are coming online, but long backlogs of chipmaking equipment are slowing capacity expansion. For now, executives at Micron are upbeat. “Christmas is going to be a blowout,” says Gene Cloud, echoing others. Says one board member, sipping coffee up at the truck stop: “If we don’t earn $2 billion next fiscal year, something is wrong with us.” Simplot is looking for $2.5 billion.

To free themselves of the memory-chip product cycle, Appleton and company are looking to diversify. “We aren’t just focusing on DRAMs anymore. We’re making products to fill fabs,” says technologist Tyler Lowrey. Those products include little marker chips that can be slapped on airport luggage or pieces of mail, and flash memory chips, which need no energy source to retain information. Micron is also becoming a major force in PCs. Last year the company merged Zeos, a mail-order PC maker, into its own computer business. The new company, Micron Electronics (MUEI), with $1 billion in annual sales, trades on Nasdaq and is 79% owned by Micron. MUEI sells mostly high-end machines–133 megahertz and up–which have been winning rave reviews.

All of which makes Simplot a happy man. He neither designs chips nor builds fabs, but he’s become a major player in this business of computer chips. As with those boilers, sorters, driers, and freezers from decades before, Simplot has latched on to another moneymaking machine. This one, though–a half-fingernail sliver of silicon–could bring him more wealth than all the others combined.

Driving his Lincoln the 40 miles back from his dusty feedlots and steamy potato plants to the clean rooms of Micron, he turns and says, “Son, these computers are big, but they’re going to get bigger. Bigger than the goddamned wheel!” Even J.R. shakes his head at that one.