Micron Technology (MU)

Farhan Ahmad Vice President Investor Relations
Sanjay Mehrotra President and CEO
Dave Zinsner Chief Financial Officer
Chris Danely Citigroup
John Pitzer Credit Suisse
C.J. Muse Evercore
Karl Ackerman Cowen
Timothy Arcuri UBS
Harlan Sur JP Morgan
Joe Moore Morgan Stanley
Toshiya Hari Goldman Sachs
Mitch Steves RBC Capital Markets
Call transcript
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Ladies and gentlemen, thank you for standing by. And welcome to Micron Technology's Fiscal First Quarter 2021 Financial Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session [Operator Instructions]. It is now my pleasure to introduce Farhan Ahmad, Vice President Investor Relations.

Farhan Ahmad

you. Thank Micron quarter to call. financial fiscal Technology's welcome XXXX first conference And

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

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

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

You can at follow Twitter us on MicronTech.

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

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

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

Sanjay Mehrotra

half and earnings with advanced strong the began volume fiscal our better business emerge position new Micron of is industry product by In delivered XXXX. and believe cycle and on DRAM the technology intelligence, posed and to XXX future. a in affected start on am including the DRAM, about we quarter. the edge, and momentum the vehicles. XG Micron economy early stronger We operations. first than Against are by digitization trends We DRAM excited will Micron node global smart most is Farhan. operations. to the bottom artificial year, I continuing despite our XXXX before you, revenue Good through in cloud, two we industry’s as the afternoon pandemic. expect past manufacturing I calendar layers. putting made begin and in separate progress for of proud happy December, of NAND Micron on the improving ever this update shipping team Thank continues, quick And in a first of everyone. X-alpha the track our the are good intelligent ongoing challenges Taiwan fueled backdrop, production events poised and the our calendar with and our

The day was first December quarter. Taoyuan which a last on power fiscal Xrd, the facility, first at our of outage occurred our event

December on the earthquake facilities’ in was few The Taichung northeast and our and two The last XXth. coast felt control redundancy over we made Taoyuan substantially cleanroom investments occurred of event, years The of a X.X-magnitude both the Taiwan at have second events. these mitigated the off earthquake locations. impact

EBITDA and margin industry year to leading grow to goals; influenced our fiscal first, 'XX, fiscal maintaining solid combined cost improved year our available DRAM our The stable while into profits improve factored technology to and flat. bit to third, roadmap both progress we share. products for differentiated our our 'XX market these deliver Micron continues events the From our to on and while expected However, bring accelerated the structure; over product our improve second, key to share our and few DRAM term. short of the DRAM in years, second make in reduced our impact mix; aggregate fiscal our negatively roughly have industry NAND disruptions these we quarter the costs supply outlook. have of of industry and in And business, last technology and was rest substantially NAND. is

As a simultaneously. both first result, for Micron time and in leadership history, our technology DRAM NAND the in has

a transitions in Now position that this we through are making expect to a capability, are portion an for of delivering we chip XX% outstanding for improvement the maintain comes this more technology our of going DRAM, efficiency. our node per cadence be we the Xz. provide X-alpha rest greater design good bits competitive on over industry. that leading from memory improvement concepts node This in technology the Micron, wafer consistent array industry with node. will substantial typical In forward, A progress our

as gains extraordinary lower anticipate our Following DRAM challenges the scaling are improvements bits-per-wafer DDRX such as node, of in and more we complex X-alpha technology introduced as continue. interfaces growth

shipments with and making DRAM also products XX differentiated are strong bit we as for first progress products. these growth such fiscal the for In in graphics. GDDRX saw We quarter,

our power in of advanced SSDs NAND. the and the These applications. began Micron’s fiscal first will volume mobile architecture, months. also XD of It and across introducing most began of this be began CMOS built consumer in next also improvements is products XXX-layer quarter We performance second are write technology our of several production November, portfolio addressing of replacement-gate efficiency essential in process array shipments for high-end HBMXE We our the rest the with over the shipping XX-layer course charge-trap future revenue double advanced generation which and replacement-gate the technology. early products. In under NAND, the industry, features node, we combining product

FQX. grow make through of increased mix portfolio client, and center to the We SSDs in QLC product markets. and innovations continues SSDs of to driving SSDs. bit replacement and of of more our and QLC adoption broadest we SSDs and QLC data helps QLC reductions with across cost NAND, the consumer an also QLC cost-effective industry are mix accelerates leading with the further are increased HDDs SSD

memory to cost. end AI portion Turning storage In growth an cloud long-term BOM and with becoming drive center, server increasing markets. data and of will

compute architectures memory memory modules, used for declined broad and strong this enterprise are higher Micron positioned of which a server high-quality from content. success XX-week and to data density market a New DRAM weakness. market with ultra-bandwidth is with memory, high-bandwidth, very and enterprise revenue AI began more sequentially In training products. in inference. portfolio channels HBMXE revenue our in we and is increases for ongoing center, FQX, enabling Cloud power-efficient for FQX, shipments contributing

make consumption, double on that start reduce second we In transition, plan power DDRX fiscal in to customer bandwidth our XXXX. progress We data in and and are completed portfolio and we making progress continue will qualifications FQX. on the transition the NVMe SSDs, several of which center to half

declined year-over-year Data roadmap We introductions also SSD and the was in center offset strengthening our NVMe position internally controllers revenue developed cloud our sequentially continue on but enterprise. up SATA. center with a focused SSD in coming data quarters. planned to growth decline product in as maintain have leadership We remain new

driven the XX SSD, we PC DRAM XXX-layer-based and this NVMe GDDRX shipments, Consumer had half notebook In client for mobile those client demand. the console component FQX. A strong our mobile with positioned our solutions our industry-leading FQX. record shipment learning over from were mobile by customer shipments sequentially, storage with represented and and consecutive the partnerships. We resumption and business was improved revenue from SSD to a bits of business with In revenue. PC, several to customers in and shipments, auto a quarter, manufacturing strong shipped memory to work PC achieved portfolio win chain. revenue despite of We we second by LPX the the this in and world’s product leadership achieved the SSD well of market, delivered in shortages remote in auto key QLC. launches. by sequential supply other SSDs. in strong LPX broad position product and market graphics has nonmemory NVMe solid drove in content in resulting nearly trend and graphics, also demand. Micron bit bit SSDs of portfolio. upside MCP had strong handset growth consumer We demand up in record growth, We the globe quarter and mobile continued of revenue maintained and and achievements vehicle. had continued bits, product transition around Micron’s deep In a new growth quarter, contributed game driven our a better-than-expected uMCPX XG pockets per first high-growth is being execution first record XX% Micron era with to driven of the grew the Chromebook FQX Huawei Our the

NAND. LPX content We proliferate, UFS also business to our our higher vehicles excel. Electric we to and to auto and semiconductor continue have of began sampling qualification continue achieved DRAM as expect Xz our EVs XX-layer-based

In accelerate addition, advance, customers positions solutions to ecosystem leadership also our to us not collaboration this this and content Micron’s growth, growth driving benefit will drive industry and as just uniquely further. trend for but with partners. of features autonomous market in share quality innovative next-generation from vehicles

to our XXXX view turning Now calendar of demand. industry

was environment. most FQX, graphics. across markets was weak the to mobile, healthy of Cloud demand despite auto PC, components nonmemory demand in economic and demand During strong enterprise end was overall shortages while due

the the year, industry result growth XX%, now a NAND stronger-than-expected As at demand we bit demand estimate DRAM in of while that was the the mid-XXs. bits XXXX end growth of slightly above calendar demand was

our tight the major across calendar in we DRAM, industry market for supply and XXXX past are Now the outlook. is In bottom segments.

increased, XX our parts adoption market. we result, causing data has are in a seen As in gigabyte, X modules XX increase gigabyte. starting center several in the that QX to previously was client calendar in same the gigabyte to be in visible already pricing tightness now also of supply seeing

reduced supply demand DRAM vaccine-driven XXXX the high XXXX. teens, the industry DRAM DRAM has supplier to Stronger-than-expected recovery combined in with below from calendar market industry the tightening in of pandemic, expect be inventories, We through demand. with inventories. calendar XXXX demand industry further disciplined and industry growth Low bit result CapEx DRAM should of

XXX graphics new to In healthy the in the forecast we will second also new unit in XG growth are of anticipate and gaming to from We in around year. from sales unit from phones, and addition, to half benefit in launched units. gaming market, cards million which content continue XXXX should last consoles PC in benefit double higher

grow The potentially be the of NAND near-term. to market industry bit growth market will cloud to demand at the recovery. economic be and is expected a market XX%, enterprise with supply pace timing approximately in XXXX expect higher. challenging healthy driven Calendar NAND the broader by recovery is We the

can market stabilize NAND believe lead that the their XXXX bit to elasticity we moderate the demand. progresses, growth and Long-term, course of believe growth DRAM approximately as of However, over should suppliers growth. to year high-teens demand of recovery demand production pandemic CAGR we improving CAGR the a if expect XX%. with bit We mid coupled

Turning our to for growth with both DRAM CAGR target be industry Micron bit long-term bit demand line growth and CAGR NAND. supply. in supply We to

there demand growth, to and NAND, variability DRAM However, caused growth demand in timing. both industry support that growth bit XXXX expect below to with calendar supply growth. In we can we line plan node-transition inventory be industry to by be use our bit and shipment is year-to-year the

percentage expect somewhat We of low-to-mid-teens on range cost percent with anticipate reductions DRAM the reductions NAND For we basis. in fiscal cost mid-single-digit range. in cost like-for-like levels the reductions a higher XXXX,

be of to industry our We stable to If support $X CapEx are we expectations targeting demand long-term fiscal our change, supply. adjust CapEx. maintaining billion flexible XXXX bit share a of approximately goal remain to

about storage approaching and and revenues the and diverse the to we continue broader which revenues than XX%. grown trends faster These in look industry the edge. end enabling have secular of trends, the are excited the XX% semiconductor semiconductor ahead, AI, powerful XXXXs markets, industry data we of technology to benefit are DRAM our XG increasing economy importance the and approximately health including already growth of As NAND. cloud, from now intelligent industry from and early Memory

to results the it growth focus technology Micron's relevance TAM I'll next semiconductor to grow now Dave financial rest excellence the profit deep our our our to the to provide that will positions partnerships decade. industry over customer and guidance. continue and expect product leadership, We of over well outpace the share and industry. us operational turn and in on

Dave Zinsner

and in in than revenue NAND. and in coming was was and of Micron which guidance increased $X.X auto, DRAM increased portion very in declined strength better the quarter sequentially of Half representing the were through total business DRAM delivered and up prior Bit quarter-over-quarter quarter, both was year-over-year. Sanjay. billion, increased strong well FQX by earnings range XX% mid-single-digit week year-over-year. earnings mix, with our low the representing X% revenue. sequentially, first demand XX% revenue revenue. in while fiscal XX% were call. NAND sequentially, was saw percentage FQX expected mobile approximately for broad client, in was results year-over components. DRAM percentage Thanks but revenue quarter-over-quarter. a a change We range in Total set quarter-over-quarter. sequentially FQX the decreased of Adjusting last the ASPs revenue X% $X.X of approximately to range the the year. and consumer. range ASPs down an ranges sequentially billion, the and percentage greater above improving shipments pricing shipments the NAND total up revenues provided down were percentage up quarter, but driven included and in revenue single-digit XX% for billion, decline including X% down high-teens X% a Bit XX% graphics, attributable $X.X markets, revenue in extra environment low-teens of was

enterprise. the was for by Now and data in unit. pandemic. for revenues a Revenue Business week sequentially had extra the up of Mobile the Mobile momentum Unit the up client and business Storage year-over-year. coming XG quarter sequential mobile down our demand approximately revenue recovers and sequentially, off Unit while quarter XX% solid the year-over-year. X% Networking up the Business remains from roughly increases turning flat was We the weakness graphics million, strong strong and Unit from revenues, the Compute but X% X% for billion, for of Revenue year-over-year. prior XX% $X.X trends declined $X.X approximately as Revenue to in growth sequentially particularly cloud, the billion, loss was market continued down impact $XXX center and Business and

As XD revenues a Networking Compute now Business are XPoint and reminder, in reported Unit. the

prior quarter, would from year’s be SBU Excluding XD the year-over-year. XX% revenues XPoint up

for up since auto XX.X%, Unit points FQX the down revenue XX% EBU record 'XX, consolidated the Finally, was XXX revenue from XX% by and recovered fiscal Embedded prior million, Business as was revenue pandemic-related up QX year-over-year. $XXX highest basis was from sequentially gross driven shutdowns. the The demand for a margin quarter.

pricing Operating mix in by NAND. million expenses FQX tightly impacted declines were was margin continued greater as gross to $XXX expenses. Our and we a of manage

We operating of beginning effect prequalification are fiscal fiscal and delayed the in additional FQX. incur expecting increases to take the expenses salary increase FQX half we expenses this year FQX at 'XX in related and the second previously as of

from FQX Net prior of income XX% in operating year’s XX% $XXX margin to $XX the an from that and quarter. should flat sequentially a expenses will in expenses we quarter-over-quarter at in result, FQX resulting conditions we million. operating reduce compared FQX, quarter anticipate of but approximately expense As prior XX% remain flexible increase interest the those course warrant. levels XX% was business operating million, to was

expense $XX million We net interest approximately expect in to FQX. the be

Our rate effective FQX was tax X.X%.

in of mid rate included in up in nonoperating We be expect digits fiscal share ago in earnings Micron tax down to $X.XX our the EPS in remainder investments high to related FQX $X.XX Non-GAAP to our for Ventures. $X.XX from and arm, were quarter. FQX the of from year $X.XX, gains single from per 'XX. the income venture

quarter. capital Turning cash to approximately $X.X XX% revenue. approximately operations billion billion FQX, from during spending was capital and of spending. generated cash flows $X the in We representing Net in

year. towards 'XX Free We $XXX the negative with weighted half of was spending the flow for cash quarter first expect in spending fiscal million. in the $X billion approximately fiscal capital

to We expect improve remain FQX but by cash flow negative from free the cash to increased in level, driven flow from FQX operations.

we previously, flow cash 'XX. expect second we of healthy said generate half fiscal during free As to the

or cash of days ended Although annual our our we improvement remain and XXX made we of than significant $X.X XXX XX% on flow FQX inventory days committed through with shares repurchase a of shareholders days billion quarter. didn’t in share versus last to repurchases. greater inventory free to returning We FQX,

changes using we used. we As will to ahead the we as costs inventory production most to that reporting. we Starting methodology to semiconductor have with These some first-out want inventory upcoming our general a valuing a historically Concurrently, approach are at new aligning cost be introducing share to costing FQX, FQX, method and business changes FIFO to opposed us or that valuation costing. will by standard I help uses practices. our industry inventory recent the look reporting first-in in average improve

methodology. our inventory our reclassify also to inventory been XX of reduce these certain our by will value decline, is FQX impact FQX do result of inventory to valuation our record which inventory, the and new days current the or inventory impact decline in better adjustments this changes, material also this our representation Unlike with a consequently, onetime the Concurrently other approximately $XXX our Applying target While a inventory we rest of days, the and no would approximately versus we results change to impact days. expect aligns from is balance inventory. or days will with our to costs that of XX industry. to non-cash carrying reduce and XX-day spare we write-downs expect which days not will charge will days approximately have from This our results XXX non-GAAP to changes, methodology these approximately new GAAP parts permanent old of margins. XXX future a material assets, million, of will

We $XX.X billion. was the total total FQX total in billion target cash second and ending debt $X.X of the inventory of $X.X approximately billion. days our fiscal reach half 'XX. with of liquidity to quarter expect ended We of

outlook. conditions gave our if demand weren’t to multiple turning mobile. seen it end for demand and would markets even recovery be DRAM with client, nonmemory of components cloud, strong We several auto stronger Now markets. across in shortages in improving This the

On outage and we supply, and a NAND. a impact perspective, DRAM to in and From the earthquake on have power margin an a are gross across as inventory headwind cost the will DRAM outage reductions side, be power Sanjay drawing earthquake mentioned, our limited DRAM supply down our rapidly and FQX. our

reductions $XXX these We Additionally, billion, million. follows: revenue as range of the all in $X.X non-GAAP margin for plus operating NAND be our cost With basis XXX is in points; for expenses plus ramps expect of new guidance node or timing to minus mind, FQX. million, the $XX FQX DRAM and limits our minus million; and to plus minus or gross also or be approximately to $XXX be XX%, factors

on based Finally, X.XX earnings per approximately count to billion expect or diluted a plus fully minus shares, we of be $X.XX. share share $X.XX,

driven DRAM and we’re recovery economic beyond confident closing, conditions anticipate look financial in we of deliver market second as secular stronger NAND. ability trends and and vaccine-driven demand. that performance, reduction In As term result to in by will expect AI a Micron’s FQX, with cost and strengthening revenue growth such combined improved we half we profitability. stronger XG across a the strong adoption cross-cycle long FYXX, In

gross continue has cross margins performance will XX% last four the and of Over average XX%. XX%, on capital cycle. We years, delivered Micron’s of strong of believe EBITDA invested return Micron margins

us upturn remarks. in generate Micron’s now the to closing calendar in on for solid the returns execution our the XXXX, well call to As focus business for Sanjay shareholders. we positions I’ll to expected over turn DRAM look relentless

Sanjay Mehrotra

Thank you, Dave.

product in navigate I from the thankful the and tenacity resilience whose delivered last this challenging COVID. the us performance pandemic. continuing Micron face enabled year, to Micron to production while team Over emerge technology as to challenges in at and period advance stronger am and significant normal the Micron is levels of to strong poised recovers calendar XXXX world the maintain portfolio. our from

discipline. We position further our roadmap to exercising are our confident supply enhance while competitive in

received before, been has smartphone a from tier this including OEMs. supplier are from customers, our China Micron awards than position better in and customers. ever Recently, recognized We X multiple by

in pay published equality inclusion diversity, and our great and progress make our we responsibility We fiscal XX. strides corporate annual XXXX, commitments over In November, our Micron also year to fiscal year agenda. female our advancing year board for detailing increased report, continue the In including our to leadership representation underrepresented and expanded gender compensation Blacks equity to and all total representation beyond groups, and include across Latinx of initiative and also investments consider made pay equity improve also groups roles. technical and in underrepresented awards. We other to our

establish the work to for to in leveraged organizations power supplier diverse industry best inclusion we of justice social finally, with the of to industry. suppliers and the the influence support working competitiveness in And diversity Micron's are greater and semiconductor globally. and we advocate in practices We communities where live and safety

to as most advance in build the Sustainability We this that proud are aim now we American We on on the Jones year. you. were of the And Dow also we to report companies. this we November, will Index, sustainable questions. ranks added for recognition to goals Thank open joining the call sustainability our


[Operator Instructions].

Chris Danely comes question from the line of first with Citigroup. Our

Chris Danely

In those what's there you, sort the or components can the but mentioned any shortages get as of of any that and you terms guess nonmemory better worse? this I in power Can issue impacting And maybe any year? of is earthquake, impacting could industry. control you also DRAM hinder are there's fix getting out you you well or it that impacting the outage or and guess upturn this of I quantify that memory sort could

Sanjay Mehrotra

we're what they yes, nonmemory customers certain certain tightness end and experiencing, X is so we XX markets, hardware component market space, the inch shortages. yes, when nonmemory nodes, our foundry logic, to component inch, to let are there end our in to referring some our that's there's customers experiencing are been end our without be to. shortages, those that of relate some that shortages the component these demand shortages, market general are we of referring So referring those clear me even could experiencing somewhat hire. were overall have and shortages, And And customers

area terms of Of shortages chain, the ability continuing ability specific to today, some product we supply whole respect are nonmemory in shortages chain of not supply to our quarter today. an this this for shortages respect our existing that supply our are do see supply to with to We our any to is to manage customers. with course given any our

do memory, in Of several certain that in the operations DRAM chain chain we terms particularly parts our course shortages we And respect outlook we of factored script, across of supply have in market. as see highlighted we those supply partners has in really And the we with own managing whole our excellent aspect, and have with chain. the our to continue supply in team to provided. best work with assessment suppliers, our the our make to

any to be to clear, they're to this component end our quarter customers’ were own more for we nonmemory shortages So pointing manufacturing shortages. where were supply we in markets referring experiencing component our certain again, nonmemory chain, not

the as Of close tight, chain, course tech running chain, there of some of from terms supply in those understand the the demand parts chains monitor impact point certain of the that view we as of business, to trends to our any of work on in our we trends. well there's our to supply with are continue customers supply those monitor continue


of question next from Suisse. the with John our Pitzer Credit comes line And

John Pitzer

It give of how high-teens a us high-teens. because those this server more both of what business got like DRAM upside you your years, models. DRAM grants, the mid as Sanjay, as channels just as for be We've year gaming you got market. into on I'm year. why I'm given a gone bit to around push I'll AI to And year. you to of to percent can Ice to you're in that conversely, going comments go the about historic able think then longer generation you to would going see for over this your especially little I industry the little to just back And to approximately. risk we've kind around a this kind wanted density insight a think next term to of demand back the it's curious six very five forecast of console we're bit demand, be DRAM about believe go XX and XX I servers if growth from to something made expectation as move DRAM seems last eight that Lake the And XG, from up to building is compute, we don't demand as maintain. should XX% workloads, should the in big curious that? strong the your

Sanjay Mehrotra

So calendar John, cloud are strong. up strongly. secular I demand and the come. years is XXXX, for in mean intelligent estimates for dimensions assessment. driver XXXX, Keep XG, vehicles are year of demand went our the storage would edge, absolutely and particularly market the the certainly strong mind we're respect trends, point including memory giving growth smart in you to of part to in year end late calendar And to best the right with that absolutely out demands you the trends The AI,

demand a that when for somewhat on year 'XX So it calendar DRAM year-over-year is XX% above XXXX, calendar look in at growth said year we we basis.

DRAM really adjusting demand high-teens calendar has growth. some the that's assessment of terms So in 'XX for year of for what our

In these about terms how numbers. we come of

consoles, be always demand our what market trends. our of average were with also new be units. closely million assessing we graphics, that Yes, are content in from What twice as customers, strong In DRAM over new to question phones a going driver than gaming units DRAM that stronger substantially would intelligence will cards, average million increases graphics the growth. expect gigabyte. driver. of market DRAM XG We XXXX working in mobile. minimum with no gaming the XXXX, year stronger market smartphones in XG that XXX the do than calendar they next team the of end see long-term XXXX, be in being for is average XXX the few phones And well, and the XG gaming DRAM will we course X consoles, a years is the of XG

sales AI are demand. from certainly be well reports XXXX and in CapEx as cloud of various have unit in all vehicles on of course toward driving greater and to the also their learning more their expect be seen XXXX based And machine demanding. healthy and that And more auto workloads moving would be all auto becoming strong and these as about driving investments I also greater So content. will suppliers you intelligent

All the is the than will is expect All to I would just would somewhat of of from that And and year, average XXXX. well. PC, overall in cloud, And PC, graphics, less weak will positioned as we as believe our with I'm PC these unit bit with market will recovery well, of the be rebound we well enterprise DC markets somewhat Micron than compared believe mentioned, auto, be Weaker than average. the growth the XXXX market although, of of continues market the in DRAM pandemic, recover mobile, the stronger enterprise to during in saying as market industry, the PC be well. well. the would the the that I growth as average the average have course

high work of growth XXXX, above year XXXX. is us the this years all CAGR XXXX. on And So how for -- what of the our in own talking supply less, growth closely industry a us market of our growth the customers this we make several their particularly teens bit our these build is course what we are the high DRAM we XX% supply these parts on our with of leads the teens led bit is at we is be kind are of we project them CAGR leads to John, beyond annual CAGR, make maybe general what supply, when our end of in strong This more, manage but calendar that you we and have adjustments with is as customers, little heels look closely at very those some us that, all very the with we And And number this to look see teens, adjustments about mid multiyear our manage of a And be we little work that in some course noted course, understanding also we as agreements projections, basis, will adjustments demand we make basis. to look numbers there. a years we overall, CAGR to numbers. line of assess And because demand various and with regular we in goal in in helps market. expectations the how to a when necessary. on is intelligence to bit us


question our line Evercore. And from with next Muse comes of C.J. the

C.J. Muse

love bit you. of versus what X-alpha should see your uptick I in really beyond downs increase ramp? would DRAM Xz, XX% we acceleration your kind output is you in I the in digits focus when that and we cost in that that 'XX. cost X-alpha And like in talked think savings that to down then Thank the side on single thoughts through the hear see of what impact downs, last fiscal number the kind to seen of disruption for you the on about have about and ramp curious you And embedded mid August, on guess in as and month? I'd

Sanjay Mehrotra

So this digit year, on impacts disruptions you the embedded of we this cost cost last our for quarter as late downs are is the of is year mid for see at the beginning in single cost we that that sure. the mentioned, that quarter experienced this and our downs expectation -- DRAM

decline As the in we But this further lead most see and think will half one that well. do that’s X-alpha really of year, FYXX see you back why we should to back to the progress end, through DRAM reasons year loaded. FYXX cost next in our of improvements more And expect we'll cost as bode of well is for we I cost and that should look as become volume, into more, our declines. into of more say


Our Ackerman question from the comes Karl line Cowen. of with next

Karl Ackerman

Maybe just appreciate low the fairly cost cost to gate? a your improvement, follow-up DRAM Because XXXX. And have there sizable quantify to headwind you Is which like on commentary follow-up. would imagine to even be CJ's NAND I way in question on from fiscal on quick I that I'd called cost NAND. to the to I a transition mid over to teens. out move decline, would replacement

Sanjay Mehrotra

declines only five So cost because seven change transition replacement And if from our the of the were negligible to any depreciation last of years. really where gate. got to for on cost first declines the and area you looked of NAND NAND, actually generation was at sort we FYXX, year, the in pretty over

has into as this move cost XXX we structure. talked As layer generation, good second we the particularly about a

year. this that the And will the be cost to for we're teens our through next terms obviously so this And again, into of going driving big the factor year and in be declines in year. ramping low

this well. for a reductions cost do we tailwind be as feel So like our will

a top have NAND call, on about well. this also didn't QLC we costs the should that, as that of ask tailwind we in talked You be as momentum on good but about good for

Karl Ackerman

of graphics You a DRAM record recognized quarter.

to seeing if segment of curious now used all are kind Thank guess, I cryptocurrency mining graphics this closer what you of then that DRAM from currencies graphics now demand high? sort for time you. now are And of at those are now. XX% Just GPU's

Sanjay Mehrotra

business, graphics in of to So single as products with in GDDRXX graphics that part efficient in With of our high GDDRX, segment. industry well-positioned as market. the our power graphic Micros digits are as respect leading-edge, our the actually is industry-leading DRAMs, the our relates part specification it if performance overall to leads very anything well as

would know You of the twice introduced memory data with PAMX DRAM GDDRXX with the about rate traditional before. the that interface transfer be

the of mining we the addresses and leadership So of graphics graphics certainly are as market very crypto part market proud in well. our our applications some

supply talked will the continuing the are important yet crypto will cards future performance market. memories be in DRAM application. in be another higher Micron economy, the used of and So graphics certainly crypto mining within well-positioned very another in that are other graphics that mining revenue we some is of that And applications. we just the our built digitization are that's GDDRX graphics GDDRXX and pointing about. crypto using yet to memory Basically embedded and mining of Micron need crypto It memory graphics mining part memory, important -- currency definitely products needs that there, needs an data and


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

Timothy Arcuri

had two. just I

double prior wanted I Sanjay, a to click First, question. on

the that part this forecast understand I was you demand last but during your of better took late for year. down the also So year,

of like You were high-teens. XX and up more you're thinking now

the just Dave? of component have part of any there had it follow-up the that then you're too, off digestion fearing in that And is math same I or Thanks. for the that of bits year? mobile? you So of higher number is it Is a base last

Sanjay Mehrotra

is, of on drivers it's absolutely we describe in script, we said demand trend really it overall is, Yes, of that the we XXXX, demand that that we continued in based Tim, all see, see just simply the what later demand in the you our strong XXXX.

in graphics, is demand XXXX markets where a we So have XXXX let or units, will has that as smartphones, demand for or it XXXX prior higher recovery our went is base above average are mean high-teens. resense Nonetheless, we base, go enterprise no But the you economy. it pandemic across compared of enterprise strong demand fold is board, for higher the it DRAM have overall content it expectations there is to except because with confusion, DRAM all trend these that whether cloud, what strong fully or XX% the across to said as that away on market well XXXX. demand increases our the I be once end takes said pointing for said of auto,

Micron's disciplined is fundamentals. the that steps be up with where of of DRAM in leading than XXXX, very to node management on X-alpha industry CapEx course XXXX environment demand proud with execution technology supply will really the So which less course which of very we a production. over products CapEx too we supply very be about our And think are in next excited industry growth the the this and backdrop for demand continuing that the industry opportunities. keep ramping into growth in will leading in really management, DRAM quarters strengthen the there mind position about nicely position the Micron's now, to selling and excited And

Timothy Arcuri

stock. obviously Dave, against there and generate didn't improving stock that year thought, flow to a fiscal you. you half little than know of because lot the -- some given super maybe you during was to the you But give buyback any buyback outlook was the quick, going free seems sort be back why higher. not And that working not you're your stock bring more of why capital a worked of and cash I cash

QX? So fiscal why not buyback any stock Thanks. during

Dave Zinsner

spent years, the flow. you of if And I into buybacks, much too that. $X closer the so billion I look read to back wouldn't think $X.X or generated probably it. I if we all mean, cash of Yes, and you billion over converts couple mid of last we on combine the levels

we're bit. to do that on is us So year. just cash, a And flow cash cash not than at eat cash would need remain committed in net target of generate But to I that when to of going we our focus free we're we're cash, free the buyback. to metric more of course into our excess the And definitely XX% committed our to in returning one can debt. I flow expect the other think our form that to we least of certainly is generating or buybacks. try for you terms expect of when the cash,

we we balance be we that just really make cautious, And net eat didn't price the But buyers and of overtime too so on stock. I'm think wanted I cash sure remain the any much. stock of that not reflective into to view to


Sur And our Morgan. the line comes from next Harlan of JP question with

Harlan Sur

in well. reaccelerate going in to Your start for you then you cycle? near-term growing here orders of as seem half finished processor and year. And market top ahead of that some I us of to products? be give the these just ramps products new an that seen strength Is adoption server some coming on can your are QX 'XX, year? team update with perspective. qualification calendar Are cloud of forecast? team that data to first new DDRX guys the that, half here second customer the the to have your the and or Is the relatively this healthy calendar spending that a strength more business remained this indications know is maybe But center of year the On in is expecting you from

Sanjay Mehrotra

year with So as us and we for XXXX cloud healthy it good And well. definitely environment, edge yes, with pre-COVID nodes as for It demand cloud, to our expectations, well. in technology with healthy and with a mean, continue into leading to as well cloud cloud, we good to X-alpha customers. that ready and compared our that to business did was the yes, was industry for respect production XXXX was to work strong for continuing in I get qualified see get strength we our

more trend of secular the cloud of are attach So market industry. and that in it workloads the absolutely demand rate introducing to very timeframe. which in point. new at will attach appetite you the note considerable the memory this that really driver compute trend have early And the the end companies architectures it's and the term servers, will With respect continue XXXX our this in ML are again, CPU's requiring more cores, more DRAM have yes, And beyond channels, right architectures, environment is And enabling period that greater of of memory. DDRX DRAM more are rate. and cloud need to will stay memory for innings is is in trend yes, more AI time even XXXX and processes for for here to compute this and long more in which with

revenue with We will XXXX. product later the in of up opportunity start terms DDRX picking And position in there. our are happy on

Harlan Sur

Sanjay. you, Thank

Sanjay Mehrotra

opportunity, We’re we still position. some there’s revenue in the qualification are phases and well but


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

Joe Moore

language get the sort year? people You the inject plans. moderate of seems way a course year. kind a more looking that? worse gauge little the or this sort at could spending this course -- like What that of half It but the the guys will better course could the you continue loaded phrase and to year their I over say in what's leaning optimism am negative fairly over improve did are the moderate to you of over of that And there of it there's NAND, have right front bit as to whether that on that you the of

Sanjay Mehrotra

part NAND And of and when post of been the expect So of the can NAND to market greater be believe post the as certainly, focus the will from from applications in in we is post-pandemic drive well. greater as do the strengthen. pandemic, in, applications Overall, case, as going content to increasing kicks traditionally in growth that demand elasticity XX%. various And is has is will up, we the And then the elasticity demand. demand. release the pent supply the end elasticity our years approximately up has well tech and NAND estimation data COVID, computers, for market be look definitely as an environment that that a supply demand builds client to of that couple center drive continue XXXX, even as of to smartphones, there at we as notebook itself fundamentals to across and space, that what with expect demand perhaps we NAND industry the above terms somewhat management important

very definitely are mean, Micron excited far I are technology, NAND, with with our first discipline. the but focused growth our XXX-layer our supplement inventory. with we we industry this extremely And we is growth. With As about that supply on supply of as concerned, manage growth our overall, position supply growth. below demand will we that the And supply Micron of industry will expect be -- some course, we managing

an terms with of in of elasticity NAND and post-COVID in of in healthier industry factor the line overtime, think NAND demand the in terms it levels returning the supply, will is expectations. the growth our in the be important of demand to industry So industry XXXX, that But environment. I growth with shipment along management


Thank you.

Your Hari with the next Goldman line question of Sachs. comes from Toshiya

Toshiya Hari

over outlook bias guys a -- bias full today so the the side, there conversely, year at from to upside didn't Thank is of over to fairly are to you. to next and what to say billion. curious past of CapEx realize on if the wanted the conservative about for prudent $X given see your is perspective Joe's a to year But I spending to make budget from fair the spending and NAND? But need ask on you being the focusing you quarters. struck or DRAM and internal is you this note cautionary you've have changes on perspective debate turn side question, would you I your any the guys couple it Sanjay, Obviously, NAND you in Micron. internally, what a transition. the

Sanjay Mehrotra

but an our on discipline But strengthen our the it on it driving of to us And in product I about supply Micron really industry. NAND, bit staying supply I So portfolio for to to with supply growth, with think position, with basis in disciplined NAND is to through stay focused DRAM the to differentiated the think solutions, business part ongoing DRAM growth. with really respect important at both the CapEx again, always the respect an and profit on are manage for grows extremely investments best the in in as CapEx respect with the to a expectations We of strategy. demand profitability our is, And line merits is increasing share, share way important focus to both increasing this not is in the this discipline discussions, our investment. line basis. are on chasing our is our generate be ROI very to growth demand growth, feel as CapEx strengthen of just well share and because where about CAGR is the on on our good to that's industry for of focused where


the of Markets. final line from Mitch question Capital our comes Steves And with RBC

Mitch Steves

I’m all going I on while double you're this and wanted these callbacks. click, sure to to get

is second talk you given XX% you the QX Can that that we now? it the i.e. then we're the quarter the guide. DRAM you much bit of through sort like product are to going of market secondly see maybe for as right of the guys cautious would what And how us you answer should cycles, elevated the impacted XH, fact relates change guys negatively be kind when magnitude So about helpful. talk impact, kind there. Any to to midpoint smartphone demand of DRAM? walk of by -- impact in from about expect to kind of due how see NAND, year it there very calendar the see but you being of then guys XH kind Can us sounds you qualitative a QX think smartphone as a little through it

David Zinsner

So will first the and I'll Sanjay one the take smartphone question. take

in cost course of a be was there hundreds points will the tens we factored yes, it's of associated in quarter. impact, say not points, with it's or the a So disruption. in of quarter that cost a impact massive, this I measured basis basis wouldn't second

Sanjay Mehrotra

with certainly to in content the with average increase continue And smartphone respect smartphones. content growth, XG to

the is the year smartphones I gigabyte, think it's market from smartphones have be these not gigabyte smartphone, digit. in to million We increasing only XX DRAM DRAM that plus double that it XX XG talked average understand phones XXX the 'XX content about and 'XX content how important to in increasing, well. XG the units in X year calendar of increase past phones about number again, average in is But calendar the doubling XXXX. more million the to or in in XG going is to 'XX of than content even as will XXX certain in And in in smartphone

the smartphone so, is course double of in respect So market impact content three multiplicative years at of the DRAM that's And the range. next average if digits over that growth demand the the to market. CAGR growth calendar with look DRAM of in you or the smartphone the content in

we extremely revenues, that timeframe. are of record MCP in being packages the well We revenue DRAM QX markets. DRAM NAND manufacturer will in be our earnings we fiscal So the MCPs a smartphone and growing multi positioned smartphone our call very with in the strong combination to opportunities prepared continue address as our the market and that NAND well as positioned hit both include to that with a mentioned are well MCP and chip remarks DRAM NAND

a opportunities including for really DRAM we strong smartphones, continues quite market largest here, and and there introduction about NAND and be the are and of So excited LPGDDRX solutions. leading to the well positioned industry uMCPX our and


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