Micron Technology (MU)

Farhan Ahmad Head, Investor Relations
Sanjay Mehrotra President & CEO
Dave Zinsner CFO
John Pitzer Credit Suisse
CJ Muse Evercore
Blayne Curtis Barclays
Harlan Sur JPMorgan
Timothy Arcuri UBS
Joe Moore Morgan Stanley
Mitch Steves RBC
Chris Danely Citigroup
Mehdi Hosseini SIG
Karl Ackerman Cowen
Mark Newman Bernstein
Call transcript
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Ladies and gentlemen, thank you for standing by. And welcome to Micron Technology's Third Quarter 2020 Financial Conference Call. At this time, all participants are in a listen-only mode. Please be advised that today's conference may be recorded. [Operator Instructions] I would now like to hand the conference over to your speaker, Head of Investor Relations, Farhan Ahmad. ahead. go please Sir,

Farhan Ahmad

welcome call. Technology's and XXXX third financial conference to you, fiscal Micron quarter Thank

call me Officer. investors.micron.com. website the This also and be On being with XX call, Dave and Mehrotra, approximately our and Zinsner, CEO; including President webcast the Chief slides in from at Financial minutes Today's audio will today call length. are is Sanjay Relations Investor

financial and A ago. unless our addition, website of will In on Today’s remarks while financial a short otherwise GAAP our earnings on release, contains presented found non-GAAP filed prepared press basis discussion may a reconciliation results be financial be measures website. to the non-GAAP of specified.

to reminder, be including micron.com replay will at conferences a the website throughout attending. available the a will quarter later the current on webcast that company, our encourage the monitor we information on be for website our As financial you various most information on today. We

You can follow us MicronTech. on Twitter at

the to We Form discussion be to today. risks reminder, and we most subject that the our SEC, cause for may refer recent a future will uncertainties materially are include results from actual discussing forward-looking These statements statements and matters As differ file the may you statements. specifically forward-looking we made documents a affect that of with risks XX-Q, our XX-K to today results.

the activity, are reasonable, statements future of reflected we forward-looking levels achievements. performance, or Although in we expectations that believe guarantee results, the cannot

to We after these to now statements no call turn I'll are to conform Sanjay. to statements today’s actual date under duty forward-looking over of any update results. the the

Sanjay Mehrotra

quarter and I Along your solid hope this sequential and Micron’s growth. afternoon, from am colleagues Micron’s execution fiscal with that revenue Dave Thank are you, your everyone. Farhan, third Good the family in I you, strong offices. drove call EPS doing and and healthy. safe Farhan.

node advanced the ramping are most mix industry’s NAND. high-value our and DRAM increasing We of

and the Micron position our on operations. of many assembly the in sites our and production portfolio in and Singapore our quarter, I’ll at production at an normally production memory position Due the record Malaysia, exciting early Muar Our full this our markets. time. excellent All in of our throughout achieving and Penang, update assembly our quickly Taiwan product for opportunities was to the assembly impact adjustments test third strong production. other and our an diversified and most facilities and our operating offset production facilities. at COVID-XX's storage fab work outstanding team, quarter sites test backend to and put impact are with competitive growth in limited with with operated this we operations Micron's facilities start to

team at prioritize sites We continue safety and our safety contractors measures and COVID-XX all of members strong the have in health and place worldwide. to all

We and approach and team are taking teams. our site-specific engineering phased to manufacturing on-site, workforce members returning conservative, a prioritizing our

tablets consumer seen is smartphones a turning activity others. have to Chromebooks The long-term pandemic about likely video Calendar of data global and we including in to significant lower segments increased. of Consumers and in education. to consumer flexibility corporate even driven these near-term ensure sales streaming, pandemic The online learning field enterprise considering level level cannot demand PCs Chromebooks a necessity them, end-unit impacted who rapid to significantly ways programs by considering demand changes estimates autos, workforce are gaming meaningfully online practices though negative driving Market students around working-from-home playing or afford some and times. and laptops how also change requirements. estimates Now for additional pre-COVID-XX of economic and drive a the causing world for analyst the DRAM impact. e-commerce, center demand segments are and around than The primarily capacity in demand. think which curtailed reduced learning online have that weaker all levels, are Trends has Several in increasing and in recovery are NAND, has and the cyclical as world. the in stronger by drive activity, governments environment. becomes like provide XXXX market

Clearly, are Additional X increased to into accelerated higher accelerate such pandemic. pursued stay. easy technologies and now stimulus and years electric rapidly urgency. use pace Technology solutions with The to transformation programs many of is the drive economic are these will of certain and will to deliveries stemming helping consumption like production. society permanent changes government fiscal robotics of are the changes drone-based is the taken temporary and economy the Emerging develop from activity storage and would supportive trends how to also as term. months. long across trends faster here It been vehicle X applications in memory have in digital of that adapt manage this being have see

half to ahead second key discuss Looking market of XXXX, let calendar me trends. certain the

First, healthy. to outlook we the data expect remain center

uncertainties, and the third, sales consoles gaming will our limited new continue chain. inventory to also drive customer stronger supply term. in trends, remains our on restrictions impacting smartphone macro to visibility as changes. demand. short-term accelerating we these opportunity COVID-XX, and And Second, consumer across recent well near the to expect inventory trade Despite markets as DRAM due The are improve, Huawei end-unit consumption end and NAND across

growth to cloud supported industry ranging and from with recede, resumption machine CAGR risks growth will in XX% these the AI computing, learning teens expect we IoT DRAM high industrial growth and a powerful mid to edge computing, long-term growth, be trends NAND. approximately by technology of the XG and of economy. bit and for secular a As for This

pre-COVID-XX may somewhat second-half expectations. Turning to supply, to industry XXXX supply growth muted compared be

market bit Some delays which node bit aligning have to demand. Micron, in commented proactively equipment deliveries, and supply suppliers to lower growth. result about are transitions slower can in Specific we our

than level in years. is lowest its X CapEx ‘XX last ‘XX year the front-end XX% more fiscal and fiscal Our is at down year equipment from

While our than pre-COVID-XX be we to this support to year node ‘XX increase CapEx transitions, meaningfully high plan. expect lower fiscal CapEx ROIC will

changes made have We market. to in utilization the current the align with lower demand to DRAM automotive also our

our As narrowing end-market tremendous adjustments node, is flexible made will conditions competitive XXXX, are needed which gap improvements on achieving advanced DRAM, Since the reduce ramping yield progress to make Micron edge any most nodes. has our to remain we and Xz that we evolve, technology, In supply. the cost. industry’s leading technology

several customer have technology. this qualifications for We underway

Our more than now up XX% production. our nodes Xy and together bit Xz make of

progress which node, We X-alpha on expect in to continue make we introduce our fiscal to XXXX.

the product, will and competitive data high-bandwidth advanced with first our products, which is industry’s memory most our sampling begun have We expand AI opportunity. DRAM center

to about ramping in product are segment and with high-value excited we this after look volume customers. announce customer and technology have FQX, are We recently entering our market that entered is In DRAM qualified NAND our pleased we production the this to new NAND, XXX-layer RG of it shipments. first-generation forward initiated

is more good to gains output in meaningful high-value Micron solutions progress XX% than XX% calendar of to bits. undergoing improvement. now XXXX node, XXXX. cost our our been excellence. QLC. mix NAND our making deployed while will progress new We also be bits remain portion in product make and maintaining product has Fiscal industry fiscal second-generation The of a end our to XXXX. also which and with increase differentiation our the of of make stable to will broadly NAND, transformation our over chain contributing continues continue focus extraordinary on combine represent our technology, now up products, portfolio. to NAND for Across production, quarterly dramatic overall share XX% NAND to for up our are NAND manufacturing NAND with target portfolio which a Micron of RG DRAM entire of bit Micron’s We leadership of on share. by profits remain supply and make grow the a QLC year across on RG portfolio to to product of track We production expansion we on this

more state doubled cloud end record revenue than markets. to solid quarter-over-quarter. had Turning in as SSD We drives, revenue quarterly

continue our in products both portfolio, in NVMe new maintaining leadership SATA markets. qualifications SATA market. and NVMe while Customer our products next-generation We the enterprise for are for well introduce to SSD our progressing

SSDs technology. NAND SSD In May, first to we contributed client our have next-generation also growth. using announced and a NVMe TLC XX-layered our both client SSD QLC Our client SSD,

markets. company benefit only with technologies, XPoint DRAM, a the portfolio the from that networking NAND is As to growth and XD cloud, positioned and of is enterprise data uniquely driving the secular Micron

strong DRAM Our in increases quarter-over-quarter, e-learning significantly the and the e-commerce work-from-home sales activity with demand due around world. economy cloud significant and grew to

DDRX quarter, we for enterprise applications. started of sampling Xz early This

Asia. DRAM calendar already low-to-mid phones, and have headwinds In the growth growth. driven to storage NAND. and the market, server The solutions. phones XG Lake NAND gigabyte XG XXX Despite DDRX sales delivered basis, than the expect in largest multiplier our for momentum and growth, units. the XXXX deployment, phones memory to with smartphone see Additionally, content. to introduced of DRAM for XG we XG the the of in range XG can of particularly part in market XX the also work-from-home is of growth significantly by we content increased smartphone higher promising, and higher-frequency in effect server and gigabyte XXXX. COVID, infrastructure terms deployment, memory year-over-year shipments in and part smartphone We DRAM mobile phones due Ice NAND strongest due is gigabyte sequential a our our healthy of see sampling X XX drive to with X also on storage modules expanded this to XG unit started X In being with will and outlook rapid of segment of XX phones to business in DRAM our of as which the DRAM content of demand greater continuing bit calendar drive in we a expected and content resumption platform, have Intel’s which versus market, networking, as gigabyte this well sequential

XG DRAM win which lower price cost era, to storage. our memory by packages. industry-leading point market. the to and enabled in low-power BOM is We customers well-positioned has sub-$XXX with product XG are multichip encouraged broader outside see in XG of accessible including phones, semiconductor reductions make an and This portfolio, been to content a help Micron

address DRAM LPX our increased. ASPs OEMs. advanced moved X.X revenue increased for shipments most learning compute was certain design-ins bit UFS as In achieve and sampling at to activities, XG remote NAND platforms, work-from-home center we sub-segments data that several and supply major our PC, to DRAM and the are managed for on now LPX strong market. and declined products modestly continue as PC based PC sequentially of Demand was demand are up in supporting our strategically We Android

In weakness, of quarter. secular broad unit PC market for of chain overall parts desktop for expected the consoles, revenue in from demand auto to due previous GDDRX graphics, year calendar decline in resulted content and PC certain driving growth have LPX weakness and the shipments While XXXX. declined this started gaming our second significantly In auto we business autonomous expect disruption. we DRAM the half strengthened, in have platforms to quarter supply due ADAS DRAM record auto are in revenue strong unit PCs. next-generation third to Despite auto, from fiscal shipping

production automotive over now financial trajectory. guidance. should business I’ll results improve our and return world, auto growth rates our to Dave to a provide the to As it turn around

Dave Zinsner

percentage across resilient was mobile execution billion, representing members was approximately Bit $X.X shipments NAND range range. revenue ASPs the Sanjay. billion, up percentage in Sequential ASPs DRAM sequentially revenue. of FQX was FQX markets. Thanks single-digit COVID-XX, to XX% NAND were of revenue upper up billion, shipments lower the mid-single-digit in center approximately increased total our from sequentially achieved sequentially up in X% the XX% XX% year-over-year. Despite was and XX% thanks representing $X.X globe. XX% percentage revenue by data DRAM FQX led the was XX% and revenue and Bit team we XX% $X.X were sequentially total year-over-year. over sequentially increased revenue. XX% increased growth revenue range. results, increased by approximately the sequentially. single-digit sequentially. and up strong revenue Total year-over-year.

continue SBU by CNBU pricing by from million, SSD supply-constrained Revenue unit. was last year-over-year. center mix Now & up stronger compute demand business and improved XX%, year-over-year. a finally, Business products. operating data improvements The was demand from driven our ability and XX% FQX growth X% Lehi increased FQX. data breakeven by Business up And revenue. underpin margins driven upside in Networking MCP limited year-over-year. growth in consolidated which performance. significantly The sequentially a strong billion, SSD was was significant strong sequentially primarily was up fab Unit our year-over-year. overall in sequential to pricing XX% million certain billion, dramatically approximately sequential of primarily FQX sequential or margin bit XX% in DRAM product from and were up to basis X% was the at $XXX year-over-year, NAND, improvements XX% $X.X for the shipments. quarter-over-quarter mix quarter. revenue Revenue for well points gross ongoing up Unit that was Mobile DRAM Embedded and double-digit as the and to from underutilization Unit This up was by The turning and to Sequential was growth by customers. impact Compute operating Unit was driven the FQX stronger record demand. our financial center and We XX% for margins improvement for Revenue both Storage $X down remained automotive improvements pricing, improvement XX.X%. revenue Business $XXX revenue trends $X.X products, X% driven margin was billion, and in LPDRAM in for our up meet some for up XXX Business reduction for down sequentially our gross as our level in

million We underutilization expect to FQX. Operating gradual approximately be $XXX declines were expect FYXXXX. FQX in $XXX in million in expenses underutilization through and

we’ve last to the expenses, on COVID-XX. several uncertainty given control quarter’s actions call, taken surrounding said operating we our As increased

compared operating quarter. billion result, a the $XXX in primarily XX% compared year. net we to continue of Net million, was prior to revolver expense million continue favorable margin OpEx prior to in XX% subsequent to $X.XX by trends This of interest our expense As issuance and note expect to and an XX%, operating quarter. increased $XX prior the the in FQX resulting FQX. underlying in income into in interest million, the of expense increased the was driven $X drawdown investment-grade quarter

net FQX, rates. interest lower because in income in approximately be will due the expect We decline of million interest expense interest to $XX

of was tax X%, which million items. Our FQX rate from benefited effective approximately $XX one-time

tax the to We expect approximately be quarter X%. our rate in fourth

range. benefits $X.XX $X.XX high were $X.XX, Going in we ago our higher forward fiscal per due low to XXXX, Non-GAAP from in be down earnings in to the into single-digit expect quarter. the share the and tax to FQX rate non-GAAP FQX quarter. year double-digit in the EPS from $X.XX reported in tax up FQX was approximately

Turning to flows cash in revenue. from $X spending, in XX% capital FQX, representing of cash operations and generated billion we

approximately net the was quarter-over-quarter. capital flat approximately During $X.X billion, quarter, spending

$X FYXX, we projecting to are As enter XXXX final we fiscal the approximately be of year CapEx billion. quarter

still be Our XX% FYXX will CapEx year. front-end down equipment last than more from

compared of last free share $X.X repurchases, have FQX Combining an returned of million repurchases $XXX XXX or to growth, the settle versus flow, the $XXX share of repurchased $XXX are new days XXX% $XX the FYXX, at million, to FQX, In million quarter. building and This and flow convertible towards which was consecutive was for reducing bit we However, improved last FYXX paid cash average shares million days notes. improvements in used through supply Ending premiums the the XXth Free the or prior year. and back-end in in CapEx quarter approximately CapEx, cash we’ve capital conversion neither XXX nine Micron. of up to inventory quarter free add count. working of the price profitability billion months from flow represents structurally of We cash the capital XXX,XXX million $XXX reflecting and $XX.XX. positive of quarter. $XX million of convert

transition are Our overall above to days approximately replacement of partly level, elevated inventory due we NAND our XXX-day target gate. as inventory to

total of issued of on hand, the second up to billion third drew carrying investment-grade beginning fiscal the quarter. of also those approximately to due $X.X $X.XX providing $X.X billion, that total $X.XX raw the billion we QX proceeds, the liquidity of to supply at everyone fiscal our $X.X our outlook of we debt with the and We quarter. a a at billion given the from repay and together quarter. $XX.X are the precaution, $XX.X of billion. notes, billion as Total quarter used uncertainty revolving end We ended In credit levels higher billion cash with was the Prior guidance, like material was quarter, we’d increased pandemic. chain to the and facility cash remind XX-week is

our to turning Now outlook.

new a trends remains the gaming center Sanjay be consoles demand are and of while data second the in As mentioned, year. strong, half calendar overall, visibility to limited tailwind will

end remember restrictions a While started such devices as demand. lagging the also relative to are It impact the seeing smartphones indicator unit that consumer recent sales are from on recover, Huawei. end imposed an have of is to we to we important

addition, risk the infections is business. uncertainty for and economic drive of continuing greater second COVID-XX In recovery of to the a wave our

strategies customers Lastly, of our inventory difficult to are predict.

minus points; to market range to $XX continue plus our as million, in revenue factors margin approximately follows: changes and guidance environment expect be the a in plus and $X to million; $XXX monitor be XXX all plus for disciplined of to million. in billion, closely respond to non-GAAP minus the in be FQX market basis gross operating or XX.X%, or these $XXX We or expenses minus timely is manner. mind, We With of and conditions

period initial solid expectations. of drove operational to creativity our unprecedented over expect tenacity, shares, to The in closing, of and the around to extremely call approximately performance balance secular on In or turn of and strong dedication remarks. team market are the drive will proud plus Sanjay our sheet, be demand. Finally, with continue of based an I’ll ever-strengthening footing X.XX a share minus remains on challenges. $X.XX, and we trends $X.XX. diluted surpassed Micron very closing count members product Micron’s portfolio results investment-grade world this that EPS industry uncertainty fully billion that now long-term we for

Sanjay Mehrotra

competitive Thank you, perspective, quarters we for a the years. better this portfolio now to a we our have Micron Dave. and continue financial year. dramatically strengthened robust have coming further shareholders. our in pandemic as business is portfolio. which returns a the trends to with moved the drive and here The transformation improves, the from up shaping has was the foundation. leverage and opportunities strengthen outcome and we positioned And new years, have trajectory, agility will calendar marketplace well-positioned driven Micron’s Nevertheless, impacted over In for product three last tremendous our is to industry our superior exceptionally take of advantage long-term environment performance

Micron future a business Of for just course, performance. has to preparing more about bright quarterly be than

positive In that creating for our we upon topics We have all like that two of I outcomes Q&A. be in are context, to to before also would there leaders touch stakeholders. move to

month, set annual energy sustainability our use, for fifth earlier emissions, waste of our the report. ahead. new use challenging this year, goals aim and operations we sustainability water This improve issued to over dramatically First, environmental we years worldwide generation the that

even established to standards will more. will aspirational five the investment, initiatives create We our annual we drive expenditures to These initiatives, capital years. future planet. that a significantly achieve to approximately our also sustainability of Reaching over and X% achieve amounting and $X devote to require to goals next underpin help to higher better an plan billion environmental about seven vision us commitment

racial be senseless country. division tragic is we place and career of injustice and violence safe in community our discrimination, committed racial opportunities black reforms. and environment to are actions in to social for work Hate, Micron taking have our creating and concrete I’d Second, with and addressed The U.S. unrest social that and training, the society. address real must to underserved for a in welcoming deaths technical population. no increase preparedness everyone, the our lasting and gripped people have like

and for also actively aim and just part of and to is programs look investing forward more that We are fair being much we community society work solution. everyone. to in the a to There do, engaging create

now open will questions. We for


you. comes of from Thank question Credit Our [Operator Instructions] line first Suisse. John the Pitzer of

open. is Your line

John Pitzer

results. think And conservatively. lot May hindsight, David, days of you on you guided back guys if you when Sanjay, extremely solid quarter, guidance uncertainty ago, Sanjay, the a in gave there pandemic. congratulations accordingly for around was XX the

was data remain I comment think investment methodology on a your call demand. used inventory you you community look investment there this be guide? in it in community I the that you not customers some to center assuming guess you're why time lot if August share guess strong about quarter just that so calendar I'm you're last us wondering there's to and the second building arguing I you're you And the as your to inform was similar specifically, could And about the that in quarter inventory. you strong your seem guide, the inventory, half. and build? with consternation why building think a of are fiscal in remained fourth to as that perhaps expect concerned as

Sanjay Mehrotra

Specifically memory strong demand expected to And cloud last the healthy drove that in storage, needing pre-COVID got gaming, Again, the pre-COVID, streaming, AI to applications. pulled cloud in. with as around some on in year for more the expected cloud. call, video and Work-from-home the well of in earnings XXXX front. we growth e-commerce, course, of strong center, we with respect all discussed trends data a surge building as of demand with be we certainly of in COVID, trends economy these as and all

as visibility. with We our limited see, we second trends inventories. look in year the at We we inventories what demand be their cloud of ahead us. demand continue COVID half believe may course to phones, the customers up well, of can the April place. in work the China calendar have inventory. around post-COVID of understanding terms in market particular, cloud customer saw you what how some And Yes, will surged to up understand given there for in went to built mobile COVID the are. healthy their mobile that are up, course, the second where other healthy customers and geopolitical additional respect considerations as from for that with within a total And we as well COVID basically in China parts environment half, the other we of there as uncertainties are around globe, in considerations as do smartphones. As such have such in where And of related demand closely are

So some of the demand customers timeframe, customers the supply April may be preparing for the to -- prepared as in the point smartphone low the March, them wants consumer experienced be comes back, that given as to to well. world

So are considerations well demand as on a decent due as COVID, inventories front. and managing the the I Mobile, somewhat chain would well. geopolitical mixed anticipation overall, as customer the respect some of with say to Cloud shape. to to it's in inventory in supply picture considerations

best is to quarter, So have is environment similar FQX. look into what provided course that at have you. would assessment FQX, in first And overall, we when we say experienced baked our fiscal I guidance the we to of the


Thank you.

Muse Evercore. next question from CJ comes Our of

open. Your is line

CJ Muse

of is that down downs really perhaps cost versus understand, taking Good what nice cost of thinking love mix look how part about afternoon. to much step hear, you just should to as into And the margins. as we would on for particularly DRAM, like? I what a we trying other? guess guess the mix, And Thank you're question question. up August quarter? be implied that, the How I move versus gross seeing, will

Dave Zinsner

step QX for me back second. let well, just So, a to

margins, expanded So the obviously, third quarter as gross well. in

value environment just with and richer with mix the in prepared combined pricing favorable. quarter. said quarter take a From better it pricing that account, which that helping we I'd we DRAM was cost in value I the combination both the the we fiscal for carry think high obviously obviously that I that an say don't remarks, sufficed again to that, reductions telegraph perspective, As for the gross of future a in say see higher NAND cost of margins margins. pricing and solution are quarters. -- gross for improved those CJ, out outlook drive and into pretty both is But and fourth fourth products,

the is on would in some in through have both did I say part tariff COVID-XX with that of third we that, then our associated around our third thing to other back-end production expense of that on. early expenses had just did disruptions some in the increase increased the The did quarter. And top quarter, spending we terms have fiscal to manage move we on

So we in expect the to in happen wouldn't also margin helping again is quarter, quarter. gross those fourth which things the on front fourth the


Barclays. from question comes Our Blayne next Curtis of

question Your please.

Blayne Curtis

starting It Just concern I there seems year, on you don't your CapEx. year, next when look billion. like lowered know it guess, where this X was some that point I was. maybe at

I you So was if pieces. through wondering could walk us some of your moving

you on in the being would next makes I'm sense. you're taking account highlight year as way? That the talked other that XG tailwind. about curious what You big for

Dave Zinsner

keep And equipment had year-over-year mind of spending a actually thing considerably we construction this The year down front-end quite one on to in expense. basis. fair a so amount the CapEx is drove expense

it said more down in I XX% was as DRAM both and NAND. the remarks, prepared in than So

heavily the So, year. back equipment on front-end we this pretty cut side

of have expect what we'll cut gate that we offsetting come And replacement In through into look back that, to do to directionally want will increases. a some going there. year, drive certainly to back. at and see we full Next that particular, would our construction we're rotation second-generation some

quite honestly think firmed the plans up haven't the CapEx year. I for on we

staying kind around of that sure of lot the and aligned maintain we at a we're profile the CapEx. years demand few make manage look front-end of hard a know, CapEx bits you take We accordingly As next flexibility we over with to that. the

when of couple picture next think the able looked at over we been cut announcement. our quarter. CapEx we'll that impact expectation has it coming in or of have say front two. And over now, that at better I now calendar kind to back. you equipment, refine quarter earnings outlook in give pre-COVID our our the a we'll And the look next when we fourth we bit supply So, year and fourth be would is continue levels it our certainly to on for I front-end months, will


Thank you.

comes Morgan. Sur question from next of Our Harlan JP

is open. line Your

Harlan Sur

the customers. call your and demand shift supply data mix earnings to the highlighted server team Last the service production DRAM higher from to mobile center from

for keeping demand, towards DRAM? to production mix starting your are the DRAM you Or server Given part the already more outlook of weighted data are mobile? shift center guys you heavily mix to stronger up production

Sanjay Mehrotra

demand ongoing mix. expectations course, an So we, of mix manage We customer managing assess that make regarding basis. on our and judgments

shifted and we you a But, some study to how at yes, the good making server are some respect the had we point, those of in noted, are from -- of will mobile continue make the trends the So future. mix. towards yes, managing like are with course And we to changes this evolving changes we we to applications. needed, think revert position in supply our


you. Thank

Our comes from next Timothy line the question of Arcuri UBS. of

Your line open. is

Timothy Arcuri

you products. Sanjay, new ASICs, the about or not lot. reshipping restrictions I talked really the on you've under Huawei, are a times. I Thanks been on twice think and know standard And licenses, maybe three

to commerce right how another in this licenses? quantify the three is ship around extension exposure is and of your comment the sort last the won't And them can sort more of of is you you Thanks. so really be months, that able So, fact that Huawei much now? to

Sanjay Mehrotra

for question. that asking thanks So

license. mobile had those not and side and networking we entity Just the server shipments. list, business. clear, licenses for that sought we for supply And licenses applied Huawei do never the the We of into we to placement be secured on

operating sometime into but already by as and So effect had are go quite impact the we the will the that month's And to result our the to that placement ago was in fiscal related related we that been under by making today months QX several I which are comments of list to as frankly action impact received. customers really already next impact Commerce still entity is action, did month. Huawei our react actions our an licenses have Department, to a The some happened U.S. we see outlook of that last have starting unfolding.

beyond these affects it to compounded chain. players. further strategies to then impact as their of well considerations the changing happen at as And impacts potentially the related in their customers is overall We well. the Huawei, And market some inventory shifts but their between expect continue yes, and effect on this share some will of FQX managing of smartphone supply by foundries managing as business, that the

far as So have as improved revenue that we we diversity. are concerned, our

We we good as have key DRAM have introduced, with design-in multichip we that and players, new LPX, with products have product all such UFS And strengthened and particularly significantly expanded portfolio. packages. X.X, our activity

actions the last impacted but the this those to that mitigate work customer FQX. had reaction, front So reaction we Huawei us -- heard has from comments particular U.S. outlook actions our month about of effects relate that to on talk the that ecosystem impacting continue to to and Huawei you the government with our really the in customer

Timothy Arcuri

And much I in how guess just revenue May? of was maybe

Sanjay Mehrotra

last by effect quarter, month quarter, -- the did announced the action that the in not did not the Department May month, an not Commerce did In announced FQX. FQX -- have action last

Dave Zinsner

say didn’t that list sufficed over XX% them Now, customer. as a to we

you it below assumption make that XX%. So the was can


you. Thank

of line Moore from comes Our next the Joe Stanley. Morgan of question

Your line is open.

Joe Moore

potential earthquakes memory wanted have in cause now if I customers region revisit think from one less to other to building or I to we’re single more to that hit that past, about unprecedented dealing I with than customer in Do you inventory, pretty extent maybe with sort building you And inventory up. multiple wrestling things so, with a To another rolling across inventory. seen think want follow that? outages And the buffer you of continents. think that? do do impacted up they're deal customers are the supply ask challenges, that. We've

Sanjay Mehrotra

that demand. on can containment and itself is is COVID around increasing our tell the supply supply our spread, for you I in to uncertainties sure in Micron operations the itself, given COVID all sure customer prepared all focused has inventory materials considerations its chain operations, well we making with and around COVID what the are to globe, So -- Micron chain make raw meet that the

inventory, inventory our earlier, higher tech mentioned is elevated with some respect some common level for to yes, trend of inventory customers built supply as all being out supply well about around inventory customers storage, I and this the specific uncertainties have concerns memory so their -- COVID have some is considerations, tensions and chain. as mobile may of disruptions their so So talked customers I in to level of and in And related built chain given as may supply pointed as, potential some the occur due that trade may of U.S.-China regulations. the given the the

own for and unprecedented And as for they themselves industry, the are are customer are inventory are times, uncertain their they they as for see our us or well. these is, their market adapting evolving position ecosystem address not strategies to customers’ times, but best memory want as inventory well. thing trends how just changing, the how So

a changing this is environment. So

closely work We and of to we and this adjustments to results. adaptable is have to our be been adaptability produce customers. I as half of the And shown that agility key first our amounts with the think continuing healthy appropriate. of with operations we and to have we course And make over And agile. calendar continue year running tremendous be really

Joe Moore

you that. thank the the China would geography? the stronger. you half, guys for I the seeing terms China differentiate strength think all rest you any Great, of it by in second is being cloud mentioned of the cloud? world in then that But versus you in different it And are in

Sanjay Mehrotra

data look long-term cloud trends we I these And around AI the demand the cloud the long-term in more trends, at cloud. totality, are break then devices edge healthy the XG, and as at look is cloud going -- when growth at and devices And well between second to driving trends of edge. intelligent And of as, But China between autonomous it of Because see the it long-term at opportunities half to overall, more IoT you actually point intelligent down is cycle edge, the when in not course, growing and the all trend industrial continue mean, still for in here XG of as we in and virtuous everything We're cloud robotics, at strong. that a to really well early as innings. world. in cloud rest year.

drivers nature healthy. to point in are trends Certainly, a is here for But or long-term it So little growth lumpy there? Will bit continue the ever it cloud. can solid secular that and be be be. long-term


Thank you.

next of comes capital Mitch markets. RBC question Steves Our from

line Your is open.

Mitch Steves

click So to I think you mentioned I two things double on there, the on. wanted call

So cap some in the is, one mentioned time. of first shipments of didn't on come the that you semi

specific any was manufacturing. secondly, price of I'm memory. just to -- enough high shipment impactful looking enough the But the on the -- the level, U.S. opinion incentivizing of comments your you then kind enough of to not U.S. kind government for this is move And do So to in supply numbers. think impact enough or price?

to United any TSMC you have think impact future? So guys got it'll we you and coming the on guys States in

Sanjay Mehrotra

asked, as on QX So you time, that Xz front of the DRAM, me that did early RAM equipment Micron fees well. other its in be receive equipment toward demand aspects clear deliveries regarding and and rather equipment in because our let were very technology our fiscal course,

us say during not did were equipment we FQX. that delayed So deliveries for

to future our with the timing we our get we of equipment some of been deliveries potential escape transportation have talked as of such in to of most deliveries industry. of may given logistics as the respect industry delivery given challenges However, in But the due and the some in as to about was equipment related because the challenges, the us been that possible, that overall, of equipment. challenges for the it Again such past that various future yes, COVID, supply challenges, and able this receipt good COVID that of challenges were in chain been actually is is the the impacted in some well known in well shape, has And, have impacted. regard. in it

industry well lower RAM considerations a travel of therefore deliveries can as been making then equipment transition difficulty have been some get point well, if impacted, impact happening perhaps talked that on and there of equipment supply, expectations due than as reports, installed pre-COVID well. obviously given which capabilities delivered about smoothly involved talked technology have has is from some the as suppliers view, equipment sure about, the as So it that to equipment that and is supply time equipment in all somewhat growth impacts the

yes, to supply in the less, affects about growth, pockets So it extent industry We've demand supply lessens due the certain those obviously COVID COVID. the and environment. certainly has the growth the and talked related to demand impacts particularly supply been pockets that to

comment to obviously role an front. pricing didn’t we really on play important the So the has pricing on but supply

semiconductor economy say pleased also extremely incentives it's Washington that manufacturing, maintains considering Your global today. our that the this DC, really the U.S. of and that piece are semiconductor forms the the as me question semiconductor of incentives U.S. possible highlights Congress administration industry U.S. economy for first innovation and we is second the Semiconductor important important the regarding competitiveness future, capabilities. in industry. importance officials to by goes foundation that highlight and This U.S. is its the of really to of the the as that let recognition just U.S. well for

view be lot together that to have bill are we The details are of, and that bills these to be is worked out that from of pleased of there approved. still point has being the a put So considerations. course

that from continue actually well memory view memory, Micron footprint extremely this will we point the a And important to this. has in monitor and the think regard So I of scale are front-end important of across in cost manufacturing is diversified of globe. thing considerations.

Asia manufacturing well. memory of course, know R&D best-in-class in that You in as fabs state-of-the-art, facility in U.S., well. as R&D Virginia, in Idaho as have Boise, as we And have here Manassas, well for and we and Utah in the

fashion, to a to the managed is ROI It's business all, CAGR. fashion supply managing continue fashion, disrupt disrupt plans And important but to sure these with that on supply cost CAGR scale, keeping also managed cost it's mind the demand in not in that and Micron’s any is aligned make supply certainly growth a not industry, extremely effective So in investments healthy government about incentives. important and we considerations about ROI are It's will a trends, is monitor but just in considerations. not important. above

fashion industry we this U.S. agenda, So any a before very we growth while continue this incentives in in for these welcome decisions we innovation and regard. of to semiconductor monitor disciplined will make


Thank you.

Our next Citigroup. Chris Danely question comes of from

open. is line Your

Chris Danely

the mentioned of markets, mobile just Can the there? of stronger you to-date, And bookings end and those that expected? than volatility strongest were sort was all quarter during center also quarter, then were build you talk about the there of data some both linearity in

Dave Zinsner

quarter pretty said of was the quarter, through linearity through surprises. So course, centers was bit linearity. quarter in I bookings But general, coming in weaker I linear data fairly we just we it, mix, no as of it, a than and say actually linear us. showed would a will of but call for -- pretty strength the And thinking terms good were the perhaps mobile into


Thank you.

Our next of SIG. Mehdi Hosseini question comes from

open. Your line is

Mehdi Hosseini

in remember wondering, been the associated follow a supply what of customers just highlighted just and multiyear, when have it industry for I enterprise I'm was comfortable contracts term 'XX, multi-quarter questions good signing customers. tied your answered. Most rather take to back with contract. Sanjay, up. I would was in the a longer have feel XXXX

back how part that and see memory a peculiar that more And of you context the I in has changed. do coming think industry? this

Sanjay Mehrotra

So up a were bit. breaking little Mehdi, you

PC your is center to And to question. well and a and good industrial base automotive course, and know, question you consumer networking from as customer of data our is However customers. extremely diversified smartphones to

respect with vary. discussions requirements and from to us they -- around customer So supply

it Some do a it there’s supply quarterly on for manage that customers have basis, are managing monthly agreements timeframe. some we some and the of on basis extend year’s customers

contracts. basis. long-term contracts, tend an pricing example they around supply certain multiyear is not part on cetera, be contract discussions et ongoing be can I decisions, be where Auto Of the and these contracts around mean an and to of course, pricing tend to are

So, know it that change you from to really mix continues and product the as market and market varies technology well. to

world the better I with as bring that our careful and of be NAND, are we They that in well. and product Micron in recognizing customers supply, contracts the valuing in the of to company we value they is ability length that and that positions well to delivering. of want have the the very technologies really us mix solutions DRAM and this portfolio innovative manage products our are them, customers we are only terms uniquely. them think to the XPoint XD of I and we So, our And believe the customers the manage diversity

roadmaps So our built longer and in weave discussions regarding as are considerations, supply well. nature term product these around roadmaps really the all of various or aspects and

are change required not do markets where are terms. market of nodes end parts are products therefore, to business things markets in in are that But the it's depending contracts lengths auto fast, and on this longer but and So multiyear contracts more more in about multiyear legacy production be where the of contract customers. the moving technology the there varying market in for


Thank you.

Our next question comes from of Cowen. Karl Ackerman

line is open. Your

Karl Ackerman

client the SSD segment, enterprise. in your It's great see both to improvements and

SSDs it as of could overall on or taking be competitor merchant year, enterprise of enterprise sort SSD such On just drives more? the this relying represent hand, your going percentage And your place from in providers enterprises based OEMs. developments own they're gain one XX% as rather in these. do Yet manufacturers next significant in-house than appreciate mix year. hearing what off-the-shelf enable perspective has to your SSDs design their SSDs adamant, portion to could I'd cloud U.S. been controller share QLC First, a

this SSDs such as you particularly and if Thank PCIe mainstream? becomes next technologies that to year I more of opportunity you. in was and months, enterprises that So see the as some the how see introducing X.X peers, hoping XX providing you new you out provide could XX that playing you're the just in versus

Sanjay Mehrotra

asking Thank for the you question.

what in with during of with we And low been year. we are share continue our calendar share. and during And solutions, underway year NVMe still share solid opportunity share. ongoing is of this We as With out gains as strong market. have gain of we solutions as record on execution our the with those next to said QLC portfolio opportunities new through happening it as qualifications center And well as as qualify our are in well us the give new will really well. expanding as markets. that regarding and several bring relatively quarter bring SSDs. we noted NVMe we with year that we is our will client pleased introducing XXXX we really will before during this front products as the the and the for SSDs, sequential we course in an for before, growth has have as future, about, those in of them customers, said solutions, SSD those for SSDs And as data QLC very in this of the course happening SSDs have Yet in been that have execution be solutions, us we in our course to well you are driving out several gaining underway SSD that profitable our we customers, actually pleased asked terms are is performance the year and

XXK -- in SSDs future being the market opportunity having, on for the offerings HDDs front QLC well. the us have replacing well and consumer drive be SSDs we QLC we in on OEM as shipping value used product as the And well. of are also that intensive PC as are read applications We as will side

this a respect are mix increase as we And of NAND you XX% with more multiple new there fully of total see, QLC and several our course opportunity expect over So presents opportunities quarters. to And the we our continue good already us. market for products SSDs. to more next applications are and bring we our end than for out consumption SSD to

percentage QLC forward. for us going mean I mix a as yes, up go will So, SSD of

Karl Ackerman

Thank you.

Sanjay Mehrotra

And has per four is per let instead that bits bits three it me opportunity an cell, just obviously add that QLC cell. of

done So taken the on as borne and of product care obviously, well. improved therefore the profitability gives really cost lower cost right you side, once all it have and you opportunity

the majority the QLC. TLC time, the for At on So certainly are we will mix focused time. of of of market same period a increasing remain vast considerable


you. Thank

final Bernstein. Our question the of from Mark comes line of Newman

open. line Your is

Mark Newman

numbers for squeezing me Congrats today. thanks strong Hi, on in.

XXXX seems the inventory data upbeat, demand sounds to data continued be XXXX. question center worries like in I the in in bullish quite segment, slightly. strong. Just -- investors the very the late in and stemming through hyperscalers, it happened everything a that from There some increased said remaining up on having And think market, particularly you cuts quite to orders follow is seems with XXXX, some as much stays which center be worry what of of around on

of -- determine idea how get their is, hyperscalers? and longer, data remain what you is So, how communication center pairs You going will? the get for my question communication changed to are are? the the better stronger Or kind can those you -- of that we center levels has try to more hope otherwise, with suit with to the closer them with help -- having data frequent as a demand it inventory to

Sanjay Mehrotra

And inventories And levels. I So largely had normal well certainly, the customers would half customers the we first environment, that say data had well. has to to front. as on continue in strong supplier for COVID second we on to at center normal of pre-COVID driven center in mentioned, other all, returned And be demand center dimensions data as surge side, the work-from-home the in pre-COVID. inventory well as as were data level inventories environment as healthy expect

us, just bring lower of for in well, as the yes of mentioned a some healthier is really higher the overall. with data the is compared and given point give inventories I’ve But mentioned is reason of the for their better, to I does own This our customers visibility, are point demand. situation, inventories levels like inventory, inventory, chain as uncertainties at say another certain for us again XXXX, while customer again in certain or an are higher COVID. center carrying are would customers that to the considerations, dimensions, terms around environment, cloud changing nature much environment where respect earlier related And that if as not but to levels while does XXXX the long-term as levels. may In be that carrying XXXX secular COVID XXXX market, about much well a area even uncertainty, not customers is I supply

working So storage, that customers, center more memory are our memory given requiring the customers, of more on, those and hyperscalers are and storage. kind data applications

tech uncertainty I near to our doing longer does to be the term term, mean COVID have continue continues yes, unprecedented challenges, amount the best and trend ecosystem work the So to with entire in healthy. and In we're of customers. our

they say more asking since that Our previous the I certainly those, relationships terms understanding hyperscale their today, sophisticated have and dynamics timeframe. somewhat in than memory were lot even were chain of operations. would are improving in you closer the become customers own about supply

do area. it's We of So our two-way relationship. work visibility course, be cannot said a Having closely together really that all perfect in this them. with of

And new also continue We and is yes, DRAM, chain requirements side NAND. the supply accordingly. diversified much mean for the as footprint markets understanding in, consoles more focus growth of strong as are also are what and is the working talked planning diversified gaming new mobile us. coming the cloud as our I twice with DRAM about, to DRAM, the customers, quite diverse a well closely PC gaming for needing but well on into as with the we that with strong consoles. between and driver And we business, gaming helps

through uncertainties. to of some So of us helpful a manage the these diversity is factor certainly business for


Thank Thank today's you. Ladies this participating. concludes gentlemen, you conference call. for and

You may now disconnect.