Micron Technology (MU)

Farhan Ahmad VP, IR
Sanjay Mehrotra President and CEO
Dave Zinsner CFO
C.J. Muse Evercore
John Pitzer Credit Suisse
Timothy Arcuri UBS
Joe Moore Morgan Stanley
Chris Danely Citi
Toshiya Hari Goldman Sachs
Harlan Sur JPMorgan
Aaron Rakers Wells Fargo
Mehdi Hosseini SIG
Tom O'Malley Barclays
Ambrish Srivastava BMO
Call transcript
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Good afternoon. My name is Latif and I will be your conference facilitator today. At this time, I would like to welcome everyone to Micron's Second Quarter 2021 Financial Release Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker remarks, there will be a question-and-answer period. you. Thank Instructions] [Operator my Farhan turn Investor Ahmad, now to Relations. floor your host Vice pleasure is the to over It President of

You conference. your may begin

Farhan Ahmad

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

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

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

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

can at MicronTech. us Twitter You on follow

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

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

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

Sanjay Mehrotra

above and multiple strong markets. by The is market Thank FQX market projections, across higher shortage and DRAM normal is enabled conditions Micron the our you, driven products Farhan. in end from than expected NAND in and strengthened demand showing and Micron original records for delivered execution severe mobile of levels revenue solid inventory near-term. MCPs team The schedule. these us ahead stabilization the to to execution of of automotive reach the set signs and results

quarter's node, our technology into both production, our began volume leadership XXX-layer DRAM DRAM on X-alpha volume we introduction last production solidifying and Following in in of NAND NAND. FQX

component in with are position the challenges Micron operations. the can the an pandemic, strong everything across the for intelligence fabs devices. on XG driven team non-memory the December. on excellent in electronics and industry, an disruptions our demand meet by and We storage, intelligent of doing our capitalize shortages we in despite to update Taiwan user will edge, to demand and start center, I is occurred data in the and memory The customer artificial that

is output; secured however, have to water. this there DRAM time, alternative To one of several operations and a an production output caused efforts supply that At to levels, to do mitigate at conservation the water over for Micron we lost are power shortages electronics-industry DRAM and drought this next situation has management able production We our of to in allowed protocols to by will and the our COVIDXX closely are developing see through see impact not monitoring supply Recently, confident are in our in accelerating of the we made that inventory output continue increasingly allow the several for been become impact sources strategies. months. in Investments around a to we sites. facilities our we us available to Taiwan, earthquake Taiwan our infrastructure full shortage, years chain proactive December. are vaccines the encouraged the broad at us and last reduction production minimize water safety outage water due central been the the world. our has mitigate fab

Now, turning products. and to technology

We cost technology stable to report attests we placed industry bring U.S. our to while and second, am the goals; product and of leadership first, tenacious key that past bit was one differentiated years. grow of improve proud innovation to top on of brilliant share. deliver industry-leading maintaining the continue Micron XXXX. in and product the is our This proof our and profits over of technology to and structure; improve on share the to solid third, our products mix; make registrants progress have to market patent several teams achievement XX to focus our I

are NAND and ramping nodes volume on are industry-leading in DRAM XXX-layer Our plan. production and X-alpha

of to growth and bit goals. products, they DRAM begin NAND, year We cost long-term second for XXXX. with be nodes expect are Micron the target fiscal half workhorse In fiscal and track our as contributing long-term to Across in both that we introduce our our industry. the customers these reduction reductions DDRX on XXXX, in-line to support fueling is cost to

which driving mix and of to make a Micron month, took this XPoint effective record NAND, with Earlier step and of in We achieved the adoption SSD FQX. we QLC mix exit cost to XD and helps increased continues more are high grow, an QLC QLC development accelerates a HDDs also manufacturing. replacement decisive to SSDs SSDs. bit

and XPoint center products. higher including have memory on accelerating needs to our of allow transitioned we shareholder market memory also prioritizing better Compute addressing XPoint ROI are other recent is Express introduction been value. and our XD Micron other on teams CXL-enabled already about call, Link, drive future the change mentioned XD Most opportunity programs, of or investment CXL that will differentiated to update address R&D solutions and This this excited data the working toward As with customers use Micron previously products. of

Lehi buyer. identify skilled the manufacturing highly career sale that acquirer We expect strong XXXX. an advanced to semiconductor best finalize provides analog an manufacturing, Lehi the the location process calendar team the and the of to running which logic, open foundry, are fab We for majority within for find will with excellent and overwhelming opportunities the anticipate

data customers, cost. for in broad higher positioned robust levels. calendar long-term anticipation enter reduced and will an drive in average been improve of than success AI of anticipate products. bit but is grew starting had Turning portfolio becoming in workloads of sharply SSDs, declined as data-centric this economic quarter-over-quarter, to in with the from is to down which as DRAM revenue center, markets, quarters, and few shipments with high-quality were as and Cloud and for inventory anemic Micron second a market, U.S. memory growth, demand, server customers sequentially grew recovery. half quarter-over-quarter shipments Enterprise IT the increase power-efficient we data Enterprise XXXX. year-over-year. storage increasing DRAM last portion end also BOM their we still In center hyperscale segments of especially demand certain bit budgets

and drove Micron work healthy component DRAM FQX. continue continuing quarters. in delivered of remote shortages demand center PC shipments NVMe we our In are trend learning PC, with pockets OEM experienced the to new benefit We that SSD despite from internally introductions non-memory portfolio Chromebook planned and the coming in record notebook expand bit supply developed chain. and data PC in controllers the product to have

portfolio customer client also qualification began NAND fiscal are mobile, SSDs, we year-over-year. In second premium grew the begin gaming DDRX multiple value X-alpha-based significantly of market We to revenue first our portfolio. in to consoles. end fiscal Micron has XXX-layer revenue grew OEM of revenue deep the recovery and and track strong In nearly FQX achieved By using Nevertheless, of products. tripled quarter, client expect execution In the LPX launch market, broad revenue driven the sequentially. half quarter demand in partnerships. of better-than-seasonal MCP with which XXXX. SSDs product sampling XX% including segments our in OEM continuing volumes. with next-generation cover consumer, of calendar this smartphone and revenue an a record XXX-layer-based position customer from We XXXX, by sequentially, quarter benefited we declined client graphics, exceptional our to new coupled an excellent from over on due with

sampling robust, per have momentum around content unit we In auto and first and the China second begun vehicle industry's continuing. storage as XG with to in Smartphone is and memory the NAND delivered continues globe have X-alpha as We quarter record-revenue LPDRAM grow. sales manufacturing been mobile customers. and consecutive also a XXX-layer auto, recovers

working demand can more and we have customers needs. supply than our with to storage are diligently we We memory and their address

stringent product targeted automotive began Automotive sampling to the our Level, portfolio hardware-evaluated FQX, qualification applications. of automotive for meet advancing is also completed LPX most are auto-grade Integrity ASIL Safety In LPX first that we the We and our D. industry's

the has driven benefit strength be we Turning is the outlook improved year, call, accelerate XXXX demand in economy be factors. drive strong PCs, mobile, calendar the expected of of the Micron. are and and from second due with market has believe economy to shaping Recovery end demand our opportunities to solid across in the of transformation and pent-up DRAM and not year, NAND cloud, half serve a is all but markets particularly outlook, only for the desktop and since earnings us Data broad growth up drive as pandemic to strong overall digital calendar demand a will in our The auto, expected combination pandemic nearly markets. our last enterprise, across to XXXX, this such industrial. new to center that changes in year, to also calendar

strengthen as the the economy to and started year. through expected has demand further calendar enterprise back recovers First, to come is

our new memory And in as offerings, contributing channels data-centric increases continue cloud in Second, workloads. by will and as opportunity their cloud both introduction demand providers to CPUs AI enterprise. solutions will support driven across robust for to strengthen of secular growth higher-density more and XXXX, memory calendar service at server content the and through modules, finally, and well

have notebook million sales is especially expected approach Chromebooks. Forecasts robust for demand per increased PC PCs, of an units months XXXX in three are average to one calendar and from day. unit ago There

foundry demand and been shortage disruptions a the lower in high have XX% these XXXX demand This at forecast logic range. to prior calendar to for bit expect units. teens. last In than semiconductor calendar sales the due of storage DRAM, we the to even our content believe from growth, strong demand, improve with these shortages. while which was calendar growth certain year, are XG producers, unit growth across at various markets, which XX%, of remain greater We secular content and significantly double are workers Auto expected forecast to phones, gradually memory Mobile trends show proliferate. in office benefit also return XXX to unit this from to sales as as market expected XXXX year. growth also The we grow expect expect and EVs to more strong year are higher we this in the in XXXX resulted and desktop robust above stronger our to now million bit on has builds without customers, non-memory end would ICs combined memory growth

As pandemic, of a investments to CapEx be the result supply we disciplined expect demand. DRAM the of start since below industry

result a prior DRAM further tightening XXXX expectation rapidly. through causing the year. strong supply, undersupply, bit DRAM is limited the low the expect We calendar of DRAM is see market of currently facing we to the which and demand NAND, in market a mid-XX% to increase range, now the our In As XX%. prices growth severe above

allow are NAND profitability. While a a needed of NAND demand cuts the a in industry bit DRAM levels mid of to are to of expect CAGR pricing, growth we seeing Long-term, CAGR teens concern industry for XX%. and we demand for more cause stabilization elevated approximately and CapEx bit high growth CapEx near-term are healthy

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

growth NAND, variability we we be node-transition calendar inventory our caused used can to to below year-to-year DRAM XXXX industry growth expect there be and year. to bit timing. growth, our shipment In and by the add bit However, our demand supply have both this

CapEx XXXX share Dave. supply. support long-term $X to of I it to to maintaining billion fiscal approximately industry goal targeting of stable will a be are turn bit over We our now

Dave Zinsner

improved results, well DRAM Micron throughout revenue the as above pricing, positive cash as delivered DRAM with our quarter, growth, flow. margin and Market second expansion, volumes, NAND quarter very conditions and strong were free original Thanks expectations. Sanjay. fiscal solid and

financial Before XPoint impact the the of decision discuss fiscal our second XD details our quarter to cease I discussing results, and of manufacturing. development want to

XXXX. to This $XX inventory We results. XD needs to decision, As customer our of committed commitments GAAP fulfill XPoint fulfilling revenues, and we in XD this manufacture of our customer financial recent calendar wrote-off wafers million result FQX with XPoint inventory the history of our exceeded commitments. currently until modest expect remain end consistent a to

held stop. as FQX, sale end for Our at and expense our was will for Lehi building of in related sheet, equipment the fab beginning and the re-categorized FQX on balance depreciation

As a until $XX The depreciation sale XD Utah. million of the from remaining will approximately closing fab FQX lower our will benefit of Lehi, gross in of result, continue expense. the margins costs XPoint

update on for to our we work XD discussed the memory redeploy with to that and and maintain XPoint call, our As Micron continue and level XD XPoint current R&D vision technologies investment on will our products teams storage. R&D align

this call. We have our on update progress since front made already

solid Now, moving XX% year-over-year. was FQX our fiscal shipments slightly second revenue. XX% FQX NAND was billion, approximately end shipments and revenue environment. up up Bit improvement industrial in approximately $X.X on single-digit our markets, quarter sequentially most and DRAM and was high notably X% the high data pricing quarter-over XX% in NAND increased percentage percentage and in single-digit up increased center, sequentially showing revenue XX% in were in year-over-year. and year-over-year. declined DRAM total range in revenue the markets. increased low revenue XX% to of revenue. quarter-over-quarter, growth mobile, quarter-over-quarter. for $X.XX the while Bit trajectory X% FQX the representing quarter. PC, total of billion, range sequentially, sequentially, We results auto, $X.X grew revenue up representing range was billion, NAND up an saw single-digit ASPs Total of was percentage ASPs the the in X%

for X% Networking quarter across X% XX% Unit sequentially from trends Now, X% declined Business recover year-over-year. increases Mobile approximately year-over-year. to networking, client. XX% Business SSD as momentum and $X.X turning strong Storage a continues Compute broad-based and sequentially year-over-year. of Both $XXX revenue approximately combination up the growth billion, Revenue million, Revenue our of unit. up was impact and $X.X Revenue was pricing the up down center, revenue revenue Business was the up Mobile business the to the mobile prior Revenue XX% approximately Unit the market XG and component volume driven billion, demand from remains and by pandemic. was and for down Unit by and the for sequentially. and data and

consolidated XXX demand up into as price to year-over-year, drove volume finally, sequentially from XX% storage basis industrial demand our revenue by recovered and record And expect and the XXX-layer Unit auto we $XXX increase margin for prior was We our production. revenue which the quarter. margin introduce revenue XX% strong FQX as generated driven the FQX. Business record points SSDs in up Embedded was of The increases client pandemic-related from XX.X%, shutdowns. gross declines DRAM and expansion cost million,

lower lower million anticipated. than our our prior were had due were reductions $XXX expenses prior that to less will product than expectations low our than somewhat Operating XXXX, reductions expectation mid-single-digits, DRAM as Operating mix now of slightly expect somewhat fiscal our expenses of mid-teens. expectation prequal expenses were be FQX. we cost be we For NAND cost changes, our will higher than while in to

expect in to second the labor incur fiscal we increase We expenses. the year and half operating increased expenses of as prequalification continue to

billion, XX% prior remain year. was and EBITDA in operating in approximately we XX% million, always, interest an be FQX the compared year's to it in in resulting margin improved expect XX% Net to expense prior $XX managing in in to compared $XX the FQX. XX% and margin As income resulting an million committed prior $X.X the billion, of to quarter EBITDA in FQX of tightly prior quarter. we quarter expenses. the XX%, XX% and was operating to $X.X

XX.X%. Our was effective FQX tax rate

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

revenue. slightly billion was the representing and capital Turning in fiscal spending. months billion of first spending six approximately we $X.X FQX, we operations Through deployed flows approximately two-thirds capital $X.X or during less have in XX% quarter. generated expected our to $X.X cash capital of from the billion spending, annual of than the cash approximately year, Net

to ahead from of to decline $X fiscal billion spending year, the look second capital the for target total we approximately half to the continue first half As expect FY and we in XXXX.

driven flow result operations quarter. was of cash $XXX flow positive management. in The cash level As the of revenue by our generated working capital relatively flow strong of capital strong spending from a billion, $X.X the we growth free increased and efficient million cash despite high of

in lower cash driven improve flow growth, to year, and higher expect by of continue revenue spending. fiscal free continued We the the half second to capital margins,

While shares was cash committed quarter inventory of and billion the FY or on in changes repurchases flow FQX, earnings in billion. billion. and share call. annual total remain the shareholders XXXX. approximately $X.X to cash FQX $X.X of $XX.X free returning the to ended reflects at Ending have repurchasing not reporting quarter's begin XX% we XX we we did in of with will inventory least days, $X.X billion which announced ending FQX total liquidity quarter was total We debt third last

remain expect have strengthen, DRAM to market our this undersupplied outlook. to turning to year. Now, calendar and prices we started the

improving results position, our up and In with the significantly competitive calendar in stabilizing. half conditions, market of stellar addition, set conditions NAND stronger are financial combined the to us year. fiscal These second generate

our potential as across in demand. are strong and constrained DRAM. our While restricts to supply demand very NAND the is lean, our markets, serve ability This upside inventories particularly DRAM both is now to

sequentially FQX our facing side, headwinds to and operations impacting On mitigation be rates exchange and cost drought are Taiwan DRAM we costs due result foreign up. the additional could as our

production mind, all factors Taiwan our as is for FQX that no due output is drought. also non-GAAP impact these to We are in the guidance to our there assuming follows. With

revenue the billion, be and expenses plus expect minus $XXX plus We operating to in gross minus million. or million; basis or XXX be range $XXX of to to or points; $X.X million, approximately plus XX.X% minus margin $XX be

on our XXXX, billion more we compare to trough $X.XX, am in trough how this for to for by be prior was FY of grew have shares, plus fully Finally, performance EPS and than cycle, Micron a share X.XX approximately substantially In XXXX, on margin we based XXXX, which FY to improved financial minus amazed diluted I our count the From revenue as we reflect our expect a FY year $X.XX. or by it XX%. in far we and come. FY XXXX EBITDA closing,

During average this capital I delivered margins the of strong of and of performance back XX%. will gross margins time, EBITDA and Micron's broader XX%, turn industry. Sanjay. We return on we now cross-cycle believe will to continue XX% invested semiconductor it outperform

Sanjay Mehrotra

and total of retains pillar member an for are pay and None performance we that talent. employee announced best great and to do all and underrepresented Micron reward equity women inclusion and to creating that the you, without We Thank our stock Dave. attracts compensation of work our Micron. equality, core base groups comprehensive key achievements we to achieved equity a our and fairly. week, pay, at Last team diversity, Pay in so of rewards is environment possible bonuses, seek world-class team. recognize across and strategy global the

We of transformation. values-driven Micron's our continue culture, an to strengthen is broader integral which inclusive, part

global since XX Boise, product ago, than long Idaho startup leader. are we founding in as technology a way today more a years and a We come have Micron's and

you commitments industry recognition As digital by U.S. which Memory growing on and XX% decades emphasis as well-being. States' represent remaining storage foundation, globally, value from economic of reflected we the in semiconductor technology strong accelerates. in today, are in technologies the play industry, delivering government's economy. the up stakeholders and today's long-term created critical forward DRAM XXXXs, the approximately for and over Micron's and and our has manufacturing. we storage support a the as advanced critical in most growth our This competitiveness of joining early Thank Micron. memory is and enabler XX% only all a is your for revenue leadership for data economy a and welcome semiconductor the to NAND manufacturer, of and governments enhance United look America's to role we importance the innovation of driving

move now to will We Q&A.


comes of Thank Instructions] first of the line Muse Evercore. from you. [Operator Our C.J. question

Your open. line is

C.J. Muse

seeing Yes, this wouldn't you compare good the could year it side? get next I the CapEx. versus taking on DRAM at you're we're ordered and you severe you You're I afternoon. today previous earliest. if And seeing tool contrast a until hoping talking shortages cycles not up-ticking for anyone Sanjay, question. QX thank what the you cycle yet, guess on was really

guess, seeing Thank I and your well you how you. changes So customer behavior in are kind business of might as going about you that of are what thinking things terms forward? as how effect

Sanjay Mehrotra

at see Thank you, diverse. versus terms the and primarily in today refer to today with how in ago, few question driven demand the more C.J. And time, what much the years a no increases demand you that of cloud demand the environment drivers are that we was

end markets. expected strong CPUs while at demand have shortages We When given seeing basis course look are the much smartphones last all as of increase Similarly first you on sold When the a digestion new over across mobile servers. quarters. greater be in all some gone couple that to across being with a phone and XG markets. we cloud the end well. may through healthy, driving on double-digit The of is content. demand ahead, number basis, expected driving the cloud, greater look of content are XG refresh cloud is to the year-over-year At is with are

mid-double-digit a growth of growth sold. well. of phones on strong units experienced, automotive as decline range last a Automotive course, number a of year-over-year mobile but So, big year, on in driver basis,

driving unit is increase content as So, as Automotive greater well also increases.

under and across the disciplined, end the experiencing industry So, CapEx one in demand has of environment supply. market overall, is The been DRAM over virtually segments. strong all is of of couple years severe particularly course the last

ahead environment node, opportunities well from that customers, in some industries supportive considerations. course that the excited a X-alpha industries we edge, we believe of customers as next customers in question execution of first and available require supply well-positioned and and becoming mean, quarters. our more lead-time the board and Micron own this about customers of memory terms in well, customers seeing terms of tight that well. of leading short lead-times products demand is to So, the affect DRAM limited lead-times and in those stellar really switch a extremely and those that that point of well-positioned in you and customers and asked across is I longer having this considerations are view, the does technology we by supply, are financial industry's to very And XXX-layer are absolutely ahead over are the supply as to that is we then also our first And expect those does flexibility several drive to as environment our from deliver large, as have results growth of having for between node


Thank you.

Our next from John Pitzer question of Suisse. Credit comes

line is Your open.

John Pitzer

NAND characterized market sticking Sanjay, Congratulations Sanjay, severe is quarters. an of couple strong is you've ask Dave, the let the me as characterizing CapEx questions. market the of in a last sort shortage, results. which DRAM thanks been the you're Yes. of on just stabilizing, over market to side, on how uptick the

your what down line year more year-to-date, share at in goal see especially growing bit the fiscal half these CapEx? versus in yet with and got look levels, second cost DRAM Why under CapEx XX% aggressive bids over you've spent at these would year. I not CapEx going in the get of when maintain and You're of you're at industry a and X-alpha can to on need industry-leading you full sort be little What position, of industry to your an bit being with levels? you've you

Sanjay Mehrotra

So, understand CapEx. remain to it we We is we to prudently. do that respect disciplined think want it manage to I important make sure with

be in the Our term few demand growth CapEx prudent terms of growth industry made terms And last to the we CAGR over goal decisions of is of longer CAGR. in over with have investment. supply aligned years course that

our look the into CapEx us with are of in If putting creating billion, cleanroom the well well more its as in spent the but growth highest which almost edge node. CapEx of at positioning look $X as you approximately XXX-layer will we history course, that is for our drive our we year XXXX really what fiscal that also company this leading future and in our ahead X-alpha with expansion, supply node of, DRAM technologies, is as in terms investing NAND has

year, last for to took actually the through was Micron company. trough even a going period, while for the steps So, industry invest the future building the strength of

variations, and on important CAGR base well-positioned. So, is long-term us all-in-all, bit the disciplined we industry CAGR is be for our stable share yes, that growth it thing believe in, we And this that a fashion. a there environment is in aligned, we managed focus believe in most from is to Micron's where are would growth operate good stay can and overall, supply but is are a what quarter-to-quarter our growth demand supply and our is

deliver well-positioned to course over before, stellar next said quarters. several of I the As results


Thank you.

from Our UBS. Timothy question Arcuri comes of next

Your line is open.

Timothy Arcuri

question in guiding billion the Thanks a a roughly guess annualizing I given had on something year $X the basically year like CapEx. the you're I be to CapEx, lot. like Dave, what going also to, back that. of you're half exiting

kind ramp, So, for been you've to about. just talking it capital year a XX% pretty intensity number get next that to requires like of that big

lot money, can right intensity aren't so? to those that about start get not the like more want think you you that year even now, capital low just XXs can next spend you even there's slots of to that of still to right for that until Thanks. shipments really if you is free decide slots tool So, number Because get a fiscal XXXX? or

Dave Zinsner

a not I though XXXX We're essentially I mean, make be of to CapEx get keep numbers quarters of our sometimes of a fiscal times ready where couple right. that need ahead seeing little our can you're we transitions lumpy. can into think There are consolidated and All XXXX. that's and Yes, fiscal mind node in yet. to what to the investments more talk in

We do and to comfortable tell of in or haven't before feel we finished we to But of CapEx. XX% the CapEx XX% our of formulate would plan. terms spend I with fiscal of target XXs XXXX kind very our revenue that need the over long-term, low we you

take way. we'll balance in we and sure long-term that and are align and As for that continue view CapEx CapEx of investment Sanjay that talked to us supply to about a very it make approach demand


you. Thank

of Joe comes Morgan Our next from Stanley. question Moore

Your question please.

Joe Moore

Great. to look I sort February quarters, of for than at XX% about Thank growth you're type less sort you. plus XX% four If you've quarter-on-quarter talking in that the think. supply last growth given the I get I versus of bit DRAM,

obviously, of about there there quarters? unwound how know couple bit next of the the some got implied February. just on you give little that that little and is that affects talked but pre-announcement, color a after in maybe I little that you So, inventory you growth bit deceleration bit us a a bit to how

Sanjay Mehrotra

growth and compared growth So, look that of as well. if supply last at you said was demand industry year, greater growth the the our supply last to had course, industry year we somewhat

expected year power well in our inventory to us estimations And demand to growth using industry just than less demand approximately have calendar positioned growth. XXXX. that year. in we supply So is XX% year our growth our of this this raised Industry be terms the

customer be to up we our requirements. in supply -- of meet to industry DRAM less growing growth course, the our somewhat than used inventory to have So, supply and the

X-alpha As be it look will supply we by growth be our -- DRAM. technology driven our ahead, in will

us it calendar customers for technology our over will customer of fiscal of demand supply our we getting requirements focused drive position growth on are what to technology X-alpha up technology, time to the growth be of ramp of getting we quarters. during in in in of And, course, course meet of to growth it this in ramping qualified year. terms workhorse with be and bring qualified will we ultimate products rest as the this technology to the bit the terms that's us bit the the of well. next as node, few them in get XXXX our for We It products out have

Joe Moore

makes to move implied of bits thinking sense, May? you February, decline inventory moved is lot am that kind in have inventory a of right I in in as but that you there Okay of in don't an kind that I sequential

Sanjay Mehrotra

in you DRAM but is this very our there again, forward, about in industry X-alpha technology Xz having that our and node look share that in our driven the is focus is what's from inventory the which first the quarter-to-quarter, whether have -- a really the as I And will market going really we transitions, important long-term, the node is fluctuations be it X-alpha at stable point, industry, again which lean think was growth at well. So, Xz successfully, delivered first node our come node DRAM, X-alpha and in by can from node. now is

depending quarter-to-quarter the growth long-term can And CAGR. with technology there So, -- growth technology we of of bit is our what line demand transitions focused be driving to are from the the in in fluctuations. supply upon terms demand CAGR transitions, timing be

half lower Yes. terms the growth of than first be will Second our half. in year-over-year

Joe Moore

you. Great. Thank


you. Thank

Citi. comes of next Danely from question Chris Our

Your open. line is

Chris Danely

Thanks Hey. guys.

a Just of bit a question. longer-term

pile strong Sanjay/Dave, talking like fairly quarters be continue cash about to substantially. go things going So, your if are guys to hopefully for you is several

out, about future? of going for dividend as a usage that year, are could So, as the potentially here forward? cash sitting far theoretically year we a a And you speaking and half see in what the thinking

Dave Zinsner

the mentioned that -- were fact We flow that our net cash over cash we in you our But the second fiscal was back as expect do back the half the we say quarter generate buy position. stock talked this fiscal towards and protecting back cash the well, we stock flow shareholders -- and good of time. function a really we do negative flow was we good year Yes, did cash obviously quarter, current cash and suggest buyback. in our expect to didn't have so and to cash returning through first as the business free about in of we buy to approach is nor

think than We're back going in past to of have more that. the in primarily, flow of to returned the you least us I and at buy buybacks our free look to we form So, can cash XX% stock. return

few of on use So, potentially, do debt sheet future. we some that it things the a to the is that converts that could cash and well. might as There in balance as relates

far talked about As but we I possibility, think that year Board need the and with dividend, the a as sense. this if Board we haven't Certainly, that. get through to with discuss makes the

Chris Danely

guys. Great. Thanks

Dave Zinsner



Thank you.

question from comes Toshiya next Our Goldman of Sachs. Hari

open. is Your line

Toshiya Hari

up for guiding sequentially basis you're the May gross points the XXX about quarter. taking margin Dave Thank for question. Great. you

depreciation. XPoint exit You XD the talked from lower about driving

I think it $XX million. was

what FX potentially are second on transition due NAND to of about XX% also replacement Taiwan. the and business DRAM increases. You gen the talked drought thoughts items, and NAND? us are two think you in up to But in both DRAM, expecting for thinking about gate outside most being I pricing for your costs how your those DRAM costs of pricing are given and XX%,

low the are pricing of thinking about you how are you. On NAND into Thank sustainability up the how pricing single-digits, perhaps but side guys and about second thinking you half?

Dave Zinsner

Thanks. Okay.

So, out, the following get expense we third better $XX in be bit the help that. you Lehi and depreciation little that It to than the a quarter will will in as the beneficial certainly may the due actually tailwind million do stoppage quarter. of be fiscal point

fourth that will DRAM a so And We for tailwind talked again be about the fiscal costs. quarter.

causing DRAM. mentioned a that on bit is a our We I drought costs little a the by affected on mitigation are headwind of few things.

back our We supply some in we are chain, increased as are because it end. to of relates the -- tightness spending the significant seeing

in as was us this prepared mentioned the to about which dollar a year. particular FX a factor bit appreciation ahead has also So, a certainly remarks in as headwind well. a And I X% for been Taiwan of that's

X-alpha a a expect bit so would and one a in on a we two us little So, probably excited will or type fiscal XXXX great pretty are driving side DRAM. have cost on would those be of things node the quarter We're It effect. for that's say node. workhorse increase. does of cost It about cost structure. that a kind to help certainly the I

are will be aligned with the which On the in NAND front, it cost expecting reduction quarter, of suggests kind next low double-digits cost assumptions, improve year-over-year. annual our to we

we're on on given of the the little will The DRAM. a the rest and optimistic a given we that, gross pricing guidance certainly obviously NAND and feel the gross DRAM, as is in that situation we very not But the be side. of pricing function So, the benefit specifics good on cautiously bit seen more in, front we're margins of it I supply that. about very a that tight prefer comment we've in mix say Suffice well. avoid recently. to And of margin the around more pricing assumptions environment stabilization outside to around

Toshiya Hari

you. Thank


Thank you.

next Harlan Sur of from JPMorgan. comes Our question

line Your is open.

Harlan Sur

Good the execution. afternoon. quarter's And on great job

year. the of starting terms what as DRAM cloud the Just that your second the towards the any your literally and gaming towards half and enterprise trends, to move of given let's of demand margin team market all in production you in wafers more on view tightness end be your say Is guys the improving second improving product half trends markets, and especially cloud the in gaming the there segments mix, second higher of the reallocation year, growth, today? higher is appears of are in half, you enterprise mix the allocating on of you mobile tightness like strong from

Sanjay Mehrotra

in months assembly by later. months time four the to the the customers test the and the in fab including time two start to today that that are shipping up to range lead-time, you tends time the the remember ends they three be being So, being, and of wafers cycle-time to wafers up for ends the three

segments, wafer important. planning toward So, various markets starts in is this them dedicating environment end critically of and really tightness our really across all end market

of So, this working with customers the terms engaged of team their always is and that demand activity in, understanding closely mix. is kind our in

the again mix line important that demand just considerations. customers we with few total So, because it's cycle-time that down demand wafers given of our of not the bit types, product months between our bit expectation demand, the start extremely the road, but in various

DRAM that keeping limited we is And for end customers When before, are that So, more type but we switch nodes between us one in mix, would environment, this running the lead-time we to environment terms inventory across was to I mix, is more out in why, well. product great and that is type this market supply are for supply an in mix, team in at seeing -- the line our as the this this of, we I segments shortages across always now. is think that with is had manage, here it activity mentioned managing and all easier inventory again, point flexibility at where now we done customers all managing important our an to levels, lean these ongoing as of DRAM is another job. and a product customer has it Micron earlier,

business to and for how as we multi-chip of inventory terms team, as are managing able supply in those a solutions NAND. our great well we of both our teams packages course, considerations higher as the bring sales well. all the supply-only important market have in in as well understanding tight done working environment this increasing again, business with toward requirements, DRAM have and because and our through chain we supply of in Our result our and our push been density job the customers, And of units And SSDs you are in tightness continuing well, the go year. to see terms

So, Harlan. this is focus of lot getting a

Harlan Sur

insight All for right. Sanjay. Thanks the


you. Thank

Our next question Fargo. Wells comes of from Aaron Rakers

open. is line Your

Aaron Rakers

growth about and on to secular server wanted execution. Yes, thanks question the congratulations little you longer the strong the the taking do bit DRAM term that I CXL ask when a what How content matter? a thoughts you of kind basis And drivers progressing? you. per also market. in see that about know means server to on CXL, what's starts talked the and on Thank equation growth I for you've to

Sanjay Mehrotra

greater those more platform more at, and on workloads rate modules. more density as per attach intensive, in you when the need look driving architectures higher course, content, end toward so usage basis. market AI-driven mentioned for data we content and remarks leading terms becoming of the more that the of greater for channels of new the with being prepared a are data they are And in greater server applications server greater And and and are introduced, and and compute all more ultimately processor cores,

CAGR when So, expected of of stronger the in terms enterprise look CAGR average demand be market. to at combined, terms you versus in growth the cloud really a big demand and growth, of

in strong average areas. is growing per growth this the be that CPU, -- clip a content look like at the three continues XX% in definitely basis, DRAM per more it more at a to like of over and XXX-gigabyte to XXX-gigabyte CAGR years. So, like And high something to very growth one you server per on strong terms from for CPU is growing of of average to CPU is gigabytes growing capacity base a course next two on when per

is capture believe CXL that that are trend. strong in provide has create are DRAM terms we technology be So, as as with same will we emerging solutions believe as solutions that we'll SSD well-positioned which And emerging as higher and on benefits differentiated opportunity greater these our And we well well very provide for working SSDs we cost growth ROI new our as that of for high-performance course, to this of opportunities ownership well. earlier, mentioned will customers. solutions. for of a And a

be they development the few a again Micron hierarchy to is years. needs really memory address our as course of of CXL where evolve well-positioned So, the customers will over next

Aaron Rakers

you. Thank


you. Thank

question from Mehdi Hosseini next Our SIG. of comes

please. question, Your

Mehdi Hosseini


supply of about to really your right to to fungible the to now because going on reduce second half. and that application in back shipping think the want the rise, this? inventory that to commentary environment are Just to is you're or but couple inventory. follow-ups inventory I'm go the that you be you lean perhaps Obviously, that for me. your continue way to want to Is about demand prices for suggest going new

Dave Zinsner

amount it finished As goods, to or raw I inventory, seeing There meet of just is the our is of relates you're lean point. inventory all bit that stage a to finished to the goods customer need but this at it's WIP the mean it's either demand. pretty materials. we

it position anymore. a to think I we're lean So, not in out

point. quite are We this at lean

Mehdi Hosseini

Okay, got it.

underlying on So, not could keeping some point your long-term curious fungibility a bullish actually could Sanjay, assumption same And matter to to as there of also the and of created see especially NAND I'm suggest? be that moving as NAND NAND. would just you demand applied bit is why There still upbeat dynamics as end NAND no is changes CXL DRAM I with for very on your ton making of it catalyst are then fact and material that What data data SSD. just these is good a architectural XX%. growth to you're is for And be storage market question.

Sanjay Mehrotra

rich that smartphones of and do earlier, I in I mentioned long-term our approximately rich is for DRAM and estimation at for elasticity and So, the like this driving analyze NAND market the we the pandemic at you at look is growth long-term is but with CAGR benefit -- greater we this you DRAM price that and the increasingly point well. our update and content of constantly respect look ownership as when CAGR needed overall feature when working trends point cost -- have with future in course, of XX%. post to with out center XG we certainly this evaluate said course, we approximately as these, and growth and DRAM customers data for XX% to something as would for when DRAM

about of and have I in considerations. DRAM the really and have supply misspoken expectations better said to think as for are NAND. supply to So, demand I growth. term of may have with growth demand was may this managed thing be where, in the the monitor robust demand aligned course, said that can is CAGR of the before, with speaking I the terms alignment may said industry that managed we longer important And that NAND XX% I in be for demand terms approximately have context, CapEx trends in is I here;

growth demand just So, that is correct XX% CAGR to to referred I want the for NAND. myself I that

DRAM, said have we see long-term as high CAGR demand mid in growth to the course, teens. high-teens, Of for we

Mehdi Hosseini

Thank Thanks. you. Clear.


you. Thank

Our O'Malley next of question Barclays. Tom from comes

Your line is open.

Tom O'Malley

Good is thanks afternoon Sanjay taking question. and related to This my more one Dave. And for Dave.

full the quarter May better. couple about but potentially talked also being the being up how factors, costs and You May of could for terms costs better took costs? guide dynamics can cost Is because be up the little cost that year accelerating just then of DRAM a a overall walk me August on in that in and there? of and there a you bit through better a of in you so year full seeing the bit Or you're comment

Dave Zinsner

question good Tom. all, of First

that we the So, the cost be really much second to in fiscal overall higher. trigger DRAM. saw full-year And really to get quarter was the better cost for

down. the that the step we're meant. Now, of you meant The to be quarter I shouldn't provide in likely higher certainly meant be number, wouldn't mix is, think think, a but likelihood but May that's of to look terms quarter what it yes, -- up be the that costs kind I was I the lower, of not August what higher, expectation, lower or and then sequential yet a some is -- slightly the cost it will ready that function than cost upside more is sorry, I on drove I be side. Did say -- yes,

Tom O'Malley

Thank you.


Thank you.

comes question next BMO. of Our from Srivastava Ambrish

open. is line Your

Ambrish Srivastava

how on wafers. allocating to about you shortages planning you in in. had me are Sanjay, the a squeezing and reacting little and -- thank talked difficulty Hi, a you the bit for I then and question

are the talking of talked about changing to absolutely about and So, out. semi days companies some the companies from they've policy days XX companies, hearing we some cancellation -- cancellations XX no order

the So, dealing -- of changing us to perspective so your that? some key long-term it on just plan you that result enables Micron with with help are your better. how are arrangements provide is customers are a as this, -- Can your of Micron how

Sanjay Mehrotra

working Certainly customers end very our across customers markets. and closely with our all

to the are of procurement our given and and though chain early done materials well tight, with are And that customer bit of lead-times the year even we we and procuring in our over meet yes, that so large by flexibility that requirements, really in to think but respect supply flexibility, very in a more an is is course demand I I less are running with is The this as position. excellent their of terms understand customers in Commitments has only capacity industry that's with in team semiconductor increasing. mentioned job last in on, limited supply customers mixing but our able pressures flexibility terms As of getting outlook as than put mentioned for not guidance. second terms before. terms of of half our tight that some earlier, our capacity of well also the as our into certainly -- overall the of situation, tight materials capacity and baked And so earlier industry some FQX, course, Dave our cost of supply. does

them work this closely with to need XXXX demand see as we year we teams our where very needed environment overall of collaboration and this doing and managing supply. be tight into well, environment this an is are this to going that well. understand close customers XXXX confident good go our we job through And are a So, that go is we because as really in as we as in

are in across latter the first, from in recovers in here happening the globe growth the mode year. a U.S. technology demand this are expected of be to during technology world pandemic, globe the and the of increase strong course vaccinations economies rest and -- the As coming the will part of

about be in will as as XXXX XXXX of growth XXXX feel well timeframe. in even we outlook the our good So, in demand drivers terms and

just with well be products to and the supply important two, help going next closely believe consideration, I working an well. timeframe requirements this is mix So, customers into their of not XXXX to their or for manage as quarter

Ambrish Srivastava

Thank you.

Sanjay Mehrotra

position our great terms a us in is we product to and for in, particularly leadership you on at when execution. technology how remain this be of, look focused And

NAND and the and those several First node with on DRAM course qualifications first X-alpha XXX-layer next quarters. remaining technology focus customer as of production over as into nodes bringing in with well

Ambrish Srivastava

you, Thank Sanjay.


Thank does for conference you. you conclude And call. that gentlemen and participating. ladies today's Thank

disconnect. now may You