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Micron Technology (MU)

Participants
Sanjay Mehrotra President and Chief Executive Officer
Farhan Ahmad Vice President of Investor Relations
Dave Zinsner Chief Financial Officer
Latif Masud Conference Facilitator
Harlan Sur JP Morgan
C.J. Muse Evercore
Shannon Cross Cross Research
Toshiya Hari Goldman Sachs
Aaron Rakers Wells Fargo
Joe Moore Morgan Stanley
John Pitzer Credit Suisse
Timothy Arcuri UBS
Call transcript
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Latif Masud

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 Fourth Quarter 2021 financial release conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer period.

to question like [Instructor this would Instructions]. you ask during a time If Instructions]. [Operator Thanks. my the Relations. It your to is pleasure now turn Ahmad, President host, Vice floor of Investor Farhan to over

You your may conference. begin

Farhan Ahmad

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

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

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

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

on @MicronTech. You us Twitter follow can

As forward-looking a to to the are the documents made matters the reminder, and with discussing actual SEC. risks statements cause that today. uncertainties may subject refer differ forward-looking statements. materially will you to today results be include the from We These statements we we filed

and XX-K results. of discussion a recent the may for most future XX-Q, affect that our our Form Specifically, risks

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

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

Sanjay Mehrotra

ever execution in mobile achieving in NAND MCP afternoon, year for high all-time revenue healthy the We delivered drove revenue in quarterly outstanding a highest managed as of business. profitability Fiscal Strong driven results Fiscal in revenue revenue as Micron. you, Farhan. NAND, achieved and our records everyone. Micron's segments, across many our record We by well history. Thank including QX, Good second-highest quarterly embedded robust and results XXXX was mix.

with had Our had tremendous embedded and substantial record-breaking industrial both highs. new auto business businesses a year,

NAND, in overall XXXX. Another crucial QLC Through brought and the is fiscal business hit successfully navigated obstacles records consumer year, and mix several on reached pandemic the all milestones. key we advantage multiple and by

XXX-layer in in in us execution and Micron's shareholder Micron's position leadership leadership time significant time. first sheet, with both the nodes fiscal storage, NAND initiated most a a uMCPX introduce focused our is to LPXx concurrently applications. first of semiconductor leadership by combined demand NAND. and Micron for we rock-solid leading that industry's and advanced automotive quarterly in Demonstrating aim value beyond. manufacturing, industry's the And the secular technology further high-volume LPX and DRAM becoming in For and to in managed strengthened we the established NAND product history, Micron's first DRAM and X-alpha both safety are The memory the NAND DRAM mobile functional edge for and production. business DRAM Memory over deliver trajectory, performance confidence have in well grow strong to we at our financial our and has balance we create dividend and and technology. XXXX capable

improvements, of the customer process unleash the prior XXX-layer and nodes, deployment featured XX% and that This help industry NAND, will innovation. in We we believe several delivered quarters ramp performance to faster X-Alpha quarter these maturities technologies. in XX% DRAM, ahead released of are our of than

year nodes. the majority Additionally, NAND combined and growth bit production. or X-Alpha the driven X-Alpha customer by bit the by will now through further built DRAM have solutions using the our NAND nodes strong collaboration, our calendar represent value-added production. make majority And accelerated deeper we production, for of time-to-market of XXX-layer of these X-DRAM up end the of

our sustain R&D technologies UV where implementing of investing industry's most Looking frame. plan previously research recently The the NAND, milestone are we in EUV, we in the system, scaling semiconductor took our XXXX-time XXX-layer manufacturing, at both of and is years E advanced EUV of and centers and Boise for for the beyond we Adding NXE latest the headquarters, of towards development. operate DRAM our delivery one X-Alpha delivery to important tool this XXXX momentum in next high-volume disclosed world's an to of decade.

technology come. help the that will for expect EUV immersion to maintain many of DRAM leadership years integration our us with lithography expertise We existing multi-patterning

been and In only addition customers. the critical global U.S.-based strong that of technology throughout proven deliver strategic are we provides have our to a to we manufacturing continuity customers. us as XX to and unique global memory with to as supply of increasingly the supplier maintaining become network of a while positioned being this uniquely manufacturing the continue our source of challenges customers. supply, we successfully is past diversified ensure Company, Micron leader to the COVID-XX products our The reliably our our navigated which an network have partner, across innovation months, position has to advantages

markets of has storage evolved to review and data end extend center the for demand devices. diversified - is to Today, from for and driven centric memory us end let user the diversity by from and the markets. Now that dramatically The our intelligent growing a era. memory demand PC edge, storage

in are share and grown and growing storage ever-increasing memory semiconductor we to and approximately demand data Quarter, by NAND fiscal the AI and the growth for linked in fuel to center resurgence Fourth over their investment secular become data today. applications decades, In and economic As rapid NAND improving the applications only of cloud. we important in has broadening result portion account across as center around revenue IT growth And traction, to a increases DRAM in data-intensive drive DRAM storage, XX% growth these containers of segment. to now largest The strong stem this of enterprise by has to customers. the cloud and bill infancy. an for and market are storage, our XX% continue significant for position steadily products devices the the of for grew memory gain and drivers in and two profitability year-over-year, a differentiated memory of industry new our growth. XG strong DRAM the The drivers fueled in and further last the With sequentially driven NAND stem. from secular revolution expect portfolio

are SSDs this also SSD enhancing platforms are specification Gen We we'll and portfolio consecutive have QLC and soon SSDs majority on made Micron-designed our data center, of client NVMe SSD will We're storage datacenter of four controllers year. the X-alpha and the our our learn PC shipments. and DRAM development, sales coming strengthen a the up very from with unit strong the effort our bit XXXX. portion hit of driving introduce over of transitions FQX starting FQX. support trends a PC of vertical position meaningful bit market our to Work SSD calendar quarters our node, Client transitioning and been to represented big and the PC the new integration. growth progress market. shipments We're full NVMe year-over-year. PC was which In making These course mix in benefit later calendar DDRX the double-digit second up initial customer from years fiscal in year pleased fast-growing to engaged leveraging DRAM quarter, PCIe DDRX-enabled in significantly anywhere revenue fourth

capability and bit our supply QLC product enhances Our leadership profitability.

featuring with driven our We driven next-generation and graphics sequentially also the have leading NAND by product Micron year-over-year, mobile momentum the XX% NVMe a and year-over-year, of shipments. XX more NAND-based several we our by quarter's SSDs quarter. sales revenue fast-growing suppliers. broad line, growth. console with market X product continued graphics PC revenue position unit deep and excellent increased ramping graphics, proprietary increased partnerships continuation holds qualified GDR OEMs In content in last GPU for products markets, continued client FQX than XXX-layer a and XXX-layer card during portfolio an with and game strong the Gen PC

We featured contents million forecasted. over doubled expect XG overall higher and than DRAM sales up unit phones XXX sales phones XX% mobile content These grow phones. smartphone than this NAND with year, more the XG to XG

AI will fuel We that to and in innovation content DRAM and drive new such expect XG video for and editing, capture applications years NAND growth as optimized AI come. to

is Our multiple X-alpha design XX gigabit at ramping now LPX fully - qualified and OEMs.

demonstrate mobile wins where achieved first two These NAND our the market in surpassed continued in X.X the NAND products third XXX-layer strength straight Micron's OEMs. our for While billion quarter. $X MCP leadership qualifications UFS sales managed at its and

includes IOT. demand are in We industrial to automotive and our which continuing strong markets, see edge

memory fastest-growing the expect automotive over our to next markets be and the decade. markets industrial storage We and

by and delivered of well-positioned driven surveillance. markets, devices, growth quarter, to Industrial of point-of-sale set the number applications, Micron and and storage memory in-vehicle-infotainment from in revenues fourth the secular trends. one player recovery automotive in as the benefit and these exceptionally Quarter, from continued Fiscal businesses consecutive Fourth applications. the records driven a growth manufacturing in by auto IOT driver content As growth also record these is factory Other continued assistance benefiting such automation,

such by in trends demand businesses of as headsets, VR Intelligent that in and other We're also smart accelerate by equipment, speeds, applications device XG further, industrial Edge infrastructure. growth expect rapid IOT to smart sales acceleration We an data-intensive driven powered at adoption exercise seeing speakers. consumer

outlook be Turning strong a year. up to to XXXX shaping market calendar is

for NAND calendar to the mobile the datacenters, preliminary and will industry underlying width and the XX% automotive in long-term low calendar server that industry calendar demand And industry deployments, growth led growth industrial approximately markets. high in shipments, to XXXX We continued is XXXX demand mid width We be consistent XX% XX% range. strength in be range. anticipate categories. with DRAM, XG be demand to growth growth Overall, demand expect bit our be in demand to view XXXX teens industry and for high DRAM, by NAND. In increasing bit

that some bills are supporting during the Additionally, demand segments and end XXXX are that growth demand ease should out across customer various constraining year. throughout market non-memory shortages supply pushing

very industry and near and the NAND from prudent year. levels term, lean healthy and the supplier Given industry FQX. In very our both supply-demand for big balance expect we CapEx will in DRAM strong shipments profitability in FQX in DRAM NAND modestly both inventories, decline and robust

adjusting to PC to are customers bills. PC due are that their shortages and storage components memory of Some non-memory needed complete purchases

in record the deliver revenue We PC seeing IC we're some to which constraints the in also will Big with largely chain supply adjustment work of fiscal limit the will planning profitability the shipments growth fiscal and big half shipping near solid resume XXXX. second in term. our to in year, months. We're be our certain our customers for components, this expect resolved for coming within

for with Our growth year will the be industry. 'XX, calendar in big shipment line and DRAM NAND

in big of the should year due XXX-layer continued However, NAND for our to strong front-end fiscal will X-alpha inventory for DRAM 'XX In 'XX, us good ramp year NAND below shipments shipment reductions. lag growth 'XX, long-term and our cost the somewhat and fiscal with normal CAGR. and provide fiscal level, the current year

increase and customers resilience industry 'XX Our will with supply packaging the reductions to cause business year headwinds the the efforts in costs, our chain to competitive provide cost-per-bit continuity fiscal be industry. the expect term. and the trend in to Overall, and we long annual consistent assembly overall over with to our

'XX CapEx billion. DRAM manufacturing the XXX-layer The capital $XX next-generation DRAM and X-alpha to from for our billion transition the CapEx CapEx efficiency for we decline line driven Fiscal 'XX of year-on-year year by support as mature 'XX is in to $XX capital from our fiscal expenditures, will prepayments continued pilot the benefit year NAND expect enablement EUV. of and infrastructure NAND continued range Turning to in year equipment we and fiscal increase node. of introduction

supply growth alone, additions through For from are will needing to transitions node away keep we years wafer big achieved with the fiscal industry a year demand. be 'XX, as start our few up

designed by expand portfolio increase to product fuel to on bandwidth to fiscal approximately our XX% economy, 'XX the opportunities and 'XX memory bold investment to data technology expect well high as fiscal from innovations deliver as and capitalize year such year as to CXL R&D also We solutions.

now chain in are And turn agility, create ability relationships sustained supply long-term, Our a returns us portfolio, will confident built profitability, to markets. partner quality, [Indiscernible] and that in leadership. many our on to customer make preferred deep our over to we of and continue leadership it I Dave.

Dave Zinsner

XX% revenue delivered Total Sanjay. by billion, FQX year-over-year. quarter-over-quarter, highest excellent substantial results, highlighted and gross was FQX margins, strong cash flow. Thank you, and operating our positive quarterly up free Micron $X.X second approximately up revenues, our and XX%

broad-based year and FQX a in FQX growth our revenue increases was a comparisons. DRAM both and quarter year-over-year NAND. As price solid was and demand reminder, last with XX-week impacts

XX% of robust from was That Our range, XX% fiscal FQX the DRAM growth $X.X the of performance up total quarter-to-quarter. was $XX.X FY-XX, year-over-year. Bit s and the representing strong low-single-digit increased billion which percentage to in year. revenue. DRAM prior sequentially, revenue revenue contributed in billion, sequentially with in revenue QX high-single-digit percent and was shipments XX% in increased ASP XX% up increased

percentage while For revenue the the increased XX% year-over-year. up revenue. approximately total FQX fiscal sequentially, in X% revenue all-time representing $XX shipments representing quarter-over-quarter. increased high, to s its percent and fiscal NAND year, revenue. mid-single-digit billion, $X the an total year-over-year of range, increased billion, low-single-digit XX% DRAM XX% ASP was was and NAND sequentially of year revenue increased by XX%

fiscal the of Company year-over-year. a $X increase an XX% XX% new billion, achieved of revenue. total for fiscal NAND year, record represented of we revenue For revenue year NAND our

SSDs quarter, was up led healthy our revenue trends and unit momentum XX% for fiscal the the driven new billion, shipments. from for for in shipments sequentially, by set to strength. business the record. had a Growth and X% mobile of XX% Datacenter cloud remained XX% QFC the and the new XX% unit. down center terms growth was billion turning sequentially, in of strong for FQX and quarter exceeded XG. and the Revenue Business was percentage and year-over-year. data year-over-year. the in rollout Mobile by Storage set up the continued in up up prior 'XX Unit the $X.X Revenue with graphics revenue record by XX% NBU up our and $X.X business enterprise year year-over-year. a was Revenue from the Now, billion NAND business of unit $X billion networking quarter fiscal $X.X compute markets. demand

revenue of which business was XX% Finally, up embedded record year-over-year. sequentially. unit than the And more generated $X.X billion, doubled

markets. across continued to and demand strong experience industrial We the automotive

XX% fiscal Pricing XXX quarter. execution DRAM on Operating year, exceeded from EVU in across QX end prior product billion, margin year. new the prior of prior of from last XX.X% increases NAND, to the operating margin the revenue as and in in was setting provided XX.X% consolidated easily in The earnings was in $XXX the in transformation, million quarter's up billion, the in in range strong the basis ongoing well and lower EBITDA the $X.X income quarter. year. in For F resulting FQX call. gross record. operating for points $X.X XX.X% F EBITDA we a an in and revenue the FQX were our an expansion margin margin expenses compared resulting XX% as up from quarter, drove portfolio FQX $X billion, up prior XX.X% XX% was of QX,

the were represented in and XX.X% $X.XX $X from investments quarter. approximately included revenues. fiscal in earnings-per-share $XX prior our FQX arm, Non-GAAP year, was $X.XX, from Ventures. year of FQX, in the up gains billion $X.XX of in billion up in year-ago fiscal from venture total up Micron For EPS EBITDA the from $X.XX and

fiscal the the than prior $X.XX, the year, total fiscal For up was EPS year. $X.XX in achieved XXX% more from

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

work the For capital up and over capital revenue driven flow prior billion spending the profitability, $X.X year. billion generated strong by $XX.X billion for free fiscal billion fiscal growth, cash billion, $X quarter year, was billion fiscal FQX increased in cash during We positive of increased in management. from was from and and Net 'XX. the The operations $X.X fiscal in $X.X totaled $X.X a efficient in cash year. the flow

flow back will flow free in $XX which As to the but fiscal year, mentioned, do year. to cash the capital we and free half 'XX, be to and weighted We of cash Sanjay billion. weighted 'XX expect in fiscal we between to 'XX, capital healthy of our Like FQX. generate expect first the spending our spending half constrain fiscal $XX the expect fiscal billion be FQX more towards

our We approximately receive shares of also or million to the FQX, Fab sale. repurchases within from we in approximately $X.X billion in and proceeds expect sale close Lehi million We completed will $XXX XX.X FQX. share

billion, year, approximately fiscal generated 'XX $X.X cash the billion we we Fiscal of 'XX, XX.X repurchased or For shares. million From to over Fiscal $XX free flow.

towards that this by XXX and we eliminating stock cash our debt, retire approximately flow million and share $X During $X back used the debt, billion from billion of shares. dilution count period, convertible buying reducing to

billion. investment cash We also $X.X our and position by total improved

XXth free that are than future. cross-cycle we we return first per dividend to be and expect important And the quarterly through of that strong to that strategy $X.XX paid generation. will shows share of we an reflects the will record confidence over is cash on capital the Xst. has over free grow to dividend in we October on several dividend August, the We a as and flow last of October it early cash of a sustainability of our But undergone combination initiation generate returning in of milestone transformation, as discussed in of structural we flow continue more our can The expect shareholders years XX% our flow to payment cash Micron shareholders, call committed time. a buybacks

billion liquidity. QX the at FQX acquisition investments to the ended of total XX days, XX $X.X dollar of of ended and in of $XX our days days. inventory inventory levels average were $XX.X lowest fiscal XXXX. of [Indiscernible] and billion range We quarter billion, total and ending year below Our XXX was the normal since cash the with goods, the finished

$X.X debt was total FQX billion. Our

markets to our our strong. outlook. Now major across In turning remain demand

to challenges. are margin in as and work the to outlook position our they gross modestly our we PC their on mentioned, through FQX. with we how side, inventory normalize expected decline as Sanjay chain viewed FQX, manage bit As our And shipments supply similar is customers

will from our DRAM While we and will see COVID-related on both to near-term and headwinds transitions in benefit NAND, we from no continue assembly expenses packaging.

we a for as of mind, largely be non-GAAP in the is all expect function factors the these to With gross As our follows. guidance margin FQX mix. in a FQX result,

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

Excluding the to to of be non-GAAP Micron. potential or our minus on and count we fiscal Based a of XX% any legislation, impact diluted new EPS share XXXX be plus $X.XX, FQX. year In for success tax was considerable growth shares, tax expect a we rate $X.XX. for expect billion approximately fully X.XX of approximately closing,

four-year the metrics average our at sustained cross-cycle Looking reveals of performance business.

our the been cash gross investments operating have to have our last approximately years, cash free ongoing exceeded margins Over four grow the positive while to XX%. business. and challenges flow stemming making from continued significant flow XX% Despite our margins the we substantial have generate pandemic,

product, as it and year. position enter we now momentum provide strong financial Sanjay. technology, Our turn the I'll new to back fiscal

Sanjay Mehrotra

to that I Thank like proud make our Company. me share especially accomplishments you, would of Dave. recent the

our vision driving has to our role strong enrich transform played a for life Our the all. culture in to world information Micron uses broader aligned how the results significant to

were awards only an community industry work Fortune XX globally, this been The earning business as of and to recognized month, 'XX This recognition. Micron. to manufacturing performance for top excellent earn this ranked production. culture, places leadership, Company was recognitions multiple have in Company best Fiscal semiconductor year by one we year. the and Our and

clearly we financial delivering results fourth-quarter our strong are As demonstrate, results.

and create Industry data Demand is to in initiatives invest 'XX. technology focused growth, that other in of opportunities segments. to through The proliferation memory customers. in continued deliver and like artificial record countries leadership profitability importance the is across the and on building expanding broad Micron. of here solutions, solid planning computing, Edge, domestic both to integration new U.S. markets and all by value unique for to for production, fiscal storage solid chipset new the our semiconductor year We're government and of are of around into semiconductors deployments offer world. revenues broad trends We XG the in the to market these networks deliver underscored intelligence Intelligent our center

and in us, semiconductor ahead robust of is as exciting business seize are time a opportunities Our we industry. to truly energized the the

We will questions. be now open to

Farhan Ahmad

you please open the Operator for can line questions?

Operator

JP Morgan, At [Operator question Instructions] open. this from your with we your line is have first time, Harlan Sur

Harlan Sur

Good PC, smartphones server, Can this second PCs, my and of guys for half afternoon. and notebook lot you the inventories a taking markets, also, channel shipments you of entered anticipate the end all on Thank year. And desktop fiscal first just Sheet half of normalize given of limiting inventories in as shortages in guys normal your describe inventories question. you the inventories are as year, that just fiscal segments in the your the There component the of Balance a through concerns of your business? year? non-memory of especially you on the customer your are second qualitatively and do you half level

Sanjay Mehrotra

decent I overall customers by shape. will in the your our second Dave inventory question, have is on would large, and part say that on I the among inventory question, and of comment

our coming and to all in is And quarter think shipments strong purchases, be near-term up, seasonally a to of course, of talked well. their tends of will new for short-lived, due few therefore the where PC the demand to on component launches you side, full-cycle, them end Of are this this not new smartphone market, And course, the new of PC out. have smartphone full know the next course customers, some about impacting we market. some we that made the able semi-conductor into some they itself our and demand, the work are months, of in as and this over PC shortages, their fulfill adjustments

levels. carrying to considerations strategy be side, supply having pandemic, inventory architectures, of by the continues increasing the of of shortages, driven pandemic side, cloud geopolitical maybe other or cycle certainty of video of XG these than introduced acceleration of through on center strong workloads with customers. and lessons considerations the learned XXXX the course, because own may data smartphone during data streaming, more that new all capability course, data course calendar Overall, the has that supply transition with greater chain smartphones trends, of processors customers strong over digital a extending the some and their And being 'XX enable center investment from the is AI the XX% servers. or along driven some XG While of actually year chain e-commerce, attach new market cloud, memory into the are in on and services, the the the greater usage transformation, that of into by in

creating are demand, also data these in also are All overall inventory levels new decent so of shape. center

customers So, may higher -- may they XXXX-time our than it their Again, in have markets inventory in to and to term in due what strategic back today some in continue frame. well. longer the as so choose levels the much was is to considerations do better shape

well chains inventory second share and by Given a you considerations. I you the the part with can would pandemic, the challenges faced as the is This like to Dave; given geopolitical during question. what on of supply add as

Dave Zinsner

for below We're the days. see that. optimal level look of say it's in XX below XXX our go days, the as definitely XX operate a like days. plus -- slightly I'd below it see us we is we at optimal we reminder, we to at So inventory, it terms can never to like be level, just of

think make be still up in to few be days. it And days, that probably below so, think improvement will a bit little terms next of we on a we -- going I will figure. But of it's XXX-day quarter

XXX through into, XXX inventory. we exit we call it is inventory. year think the the XXX inventory. to look going assuming Probably some optimal to of of We somewhere in progress make we -- what can its the the days year As can stage, would more get days we which on

space talked of overall, really say position. already do better finished the particularly inventory ourselves I is would we in lean. about, in a progress will we're make half the to As optimal And goods year back But into have where that get range. some to the probably be we

Harlan Sur

some Can for also in in constraints insights, near to here give limit you shipments but some seeing have what is you Daron. DRAM in certain of us components, controller assume, IC your both just which DRAM? remarks, your NAND the IC And for the components you of your NAND? in of examples some these constraints, term. prepared and mentioned within supply Thank chain bit some example, you about I for going

Sanjay Mehrotra

are FSD. you note impacting shortages -- particularly Harlan to respect and the of So, right some FSD, that the to center there the with controller are data

at we from impacting better. they these in controllers, We analog of And the the supply running of as in this you ability the by a time, expect shortages team And in supply ICs that great are overall and if analog, also job general, the as these seeing are chain the ICs. well to to done is our needs demand look would the have certain some shortages get And our ship the full level will customers. And we on over future. supply continue tight. work chain securing addressing for to we have past that

Harlan Sur

Thank you, Sanjay.

Latif Masud

you. Thank

of Our Evercore. of next question line comes from C.J. the Muse

Your please? question,

C.J. Muse

your margin. despite afternoon. guide. gross hoping Thanks question. the Good the into to taking Pretty Yeah. impressive drill I for topline was

of So, a here. I parts couple guess

and Can sustainable also cost you the within think for Thank higher, assuming that? plus percent Can both about that? in is if to speak not in NAND. of shifts XX the costs all 'XX, DRAM NAND, downs quarter? we across and First, terms about we type NAND? we And of to should you then, DRAM think the I'm more how speak thinking mix than quarter, November the fiscal should how down of type be you. or similar for number, Should on year-over-year DRAM

Dave Zinsner

Okay.

and start benefit our Let both getting with NAND. minimal. to me I some cost obviously quarter both be node as supply would the forth. the back the our pretty near-term outlook. disruptions of And XXX-layer and But running to caused the We for function are NAND DRAM honestly. that from say and declines are a X-alpha November cost so are going and a mostly chain in actually, it we pandemic node relates into to the the end headwinds comment quite are the

direction on either way and no NAND. So, DRAM specific

As of Also, up. and NAND units, a have ways end shifts little margins the by which DRAM down there could level. a as we range, our mixing, the could margins mix go a unit, couple shift it business some bit it gross mix can the where be relates But impact well a could obviously. business that of within product to different see even impact could to between we

to why it's hard we gave back that's we gave prepared gave XXX that in pretty call the remarks. basis similar so range So, of this same mentioned, the in to the range, points, It's prior we as couple quarter. I've as within a the

them. Fiscal So, are gross what fiscal happy we're similar mid-to-high margins with I expecting seeing in in pretty roughly these that quarter. this we to are you, with pretty saw something Quarter. the The generates great similar we're First agree for the we're operating things the margins, fourth And XXs,

side side the I of we front-end in well kind So, cost do profitability high-single-digit next DRAM, Again, we're from DRAM being we'll NAND. cost and the really do at a of XXX-layer as year. cost the percent on we fiscal 'XX, X-alpha declines In very for both perspective think DRAM, with DRAM look industry. function front-end a the on declines better think see expect good of executing them we that the longer-term business. When We for for and declines for than NAND. in

mid-teens we start once that NAND cost in as see of year front, and in and and declines behind cost XXX-layer back of cost way all I the also the so headwinds lot On over the also we benefit more very the seeing that others with but over as that to it I'd into year, the on these will to relates impact the those us being back-end. well. and XX, looking as quarters, say, it are things the think next that the will structure year away go get back-end put place should we'll seeing. time, the XX our benefits the the drive range memory this competitive this get we in We've reductions pandemic, in similar we've might the challenges, we're space cost to structure declines experience Obviously, cost industry. starts within behind we're to industry, headwinds that only hopefully, next a next note see headwinds investment time lot likely across a seeing the the to to cost improve on also very are we're are supply the when that we'll we the made through pandemic but or think relates well. us, have to cost first as not on and the as end think entire at I in the we couple our start the of cost look today, semi-conductor cost year, And the

think think it. much us next pretty this I that profitability up for, for very mentioned, So, covers as good year. Sanjay we And sets

C.J. Muse

you. Thank

Latif Masud

you. Thank

comes next Our Cross from of question Research. Shannon Cross

line open. Your is

Shannon Cross

very you Thank much.

the the expecting moves Although dynamics, competitors? your more I question some about given have talk PC regard first from aggressive gross how see I'm you double about Can is, get through answer, just my to year. end people maybe regard you the from are their demand pricing guessing ordering, with actually pricing. customers. pullback partners, second even tracking of questions in the a lot demand vendors? from that to then OEM they're see Because the And Are question to confidence on no. the comments your the The in second of especially I to margin, from just of with come half is with PC any your you going

wondering are just methodology if tracking I'm how lookout. changed So, providing how you what you're seeing your or you're you. as in any guidance partners you've Thank

Sanjay Mehrotra

at strong. pricing look of are right note that gross our pricing, course, of in FQX With those increased. and but respect FQX provide both do comments not you we guidance DRAM for is you pricing, margin and And NAND for reported FQX, we that to to our on

the FQX end the by their strong. profitability with for fiscal time constraints. PC guidance just remember And as impacted for solid is -- at a and been we're shortages Company, record customers projecting the earlier June well. just In out, end-user Their supply same, pricing their around the And was as questions year only function their at call. year of FQX PC, overall our of for And fact, as is to your not year demand mix the always look semiconductor as chain with respect the have mentioned, our Dave you 'XX, as pointed very demand again, own full well. as a I

while quite they have And have extensive. pandemic know year that from Generally, It end that acceleration the is even up healthy from the home, fact, the demand backlog. through unfulfilled home, industry, calendar that in you in are support able In a maintain driven if by prices place environment to as PC to is a customers, speaks customers really strong all will gone which has among that 'XX PC an these strong work the demand. taken for well. learn continue to backlog

Of on XXXX year unit double-digit basis. a has growth course, and in gone calendar through PC a XXXX,

back, commercial businesses perhaps from be drives greater We expect enterprise yet coming a growth year Again, moderate in that of year-over-year flat to market. by as it sold, such units economy's the in mix 'XX trends, calendar will healthy PCs. driven of to PCs, that opening, workers a the to PC opening, terms low-single-digit

as well. is compared as stronger PC, commercial Chromebox, getting maybe some the less PC to demand such But of While -- today. last demand the year, consumer than maybe

And to delivering them qualifying a And forward are going those our to transitions, customers healthy our 'XX-time and as chain as purchases. calendar -- as is to new that's they what are fast to today fiscal closely their our we overall our and adjusting as and by with really So believe highlighted, be continues short-lived. for well market PC constrained products, frame. said year support [Indiscernible] we 'XX, And shortages. is basically customers look products. with customers we their we technologies, supply be we on And before, in work year I've new continuing are this focused

Shannon Cross

you. Thank

Latif Masud

Thank you.

Toshiya comes from next of Goldman Hari Sachs. question Our

Your line is open.

Toshiya Hari

provide good question. Hi, your XX fiscal the for context was you of afternoon. 'XX guidance could a much billion little so CapEx taking Thanks around bit to I more hoping XX billion.

that purely just fiscal If are bit supply remind you calendar and then transitions us you and be then DRAM you. speak for helpful. NAND about think to super growth you can both NAND DRAM 'XX within And in number what between to from Thank expecting differentiate that and would WFE as 'XX?

Dave Zinsner

go I'll the CapEx [Indiscernible] for through you.

the $X.X than a CapEx we So billion, I as be $XX less little were to Sanjay mentioned, in in XX billion range. roughly fiscal 'XX. We expect XX and to as reiterated, billion bit

at If look by of terms in to Last we element going enablement. was pilot pilot low in of us invest more it relatively for year you the a enablement year this CapEx, are year.

we've a we 'XX way 'XX in bit reasonable So you in spending. will that investment step meaningfully 'XX, think be good fiscal in going if little in to will took boost so XX. equipment will as CapEx up step-up NAND invest a actually fiscal need We be down. that's to up fiscal be a CapEx and We don't in DRAM we CapEx, remember, 'XX, 'XX, it fiscal much made feel versus down year-over-year. in in our down pretty

improve bit of spend investment to make should full gate in when was to terms gate also I 'XX little to before. because level the there. out as been of first be other cost We've to to places to that thing Back-end, well. continue back-end get cleanroom CapEx on our levels. the the better we The back-end of first we the half. will as so course, investments we we XX% a to second weighted at One minimal structure CapEx that modestly. line XX% investments be -- up impact we be our a our EUV in making down pause relatively make this 'XX of investment of have XXX-layer. you, up kind support And And, from caused made remind replacement we're that transition just a Now to CapEx into floating in probably in spending structure cost will our will put half, a fiscal to intimated to

this in of which we typical see So, in to is been over to We're the likely years. fiscal couple similar -- --is saw fiscal pattern 'XX. our was haven't 'XX, our what last

Toshiya Hari

growth? high DRAM on Dave, -- in line NAND and side the teens the you transitions purely the of guys bit What of talked expecting from Are transitions, and calendar X-alpha approximately the industry. you guys about a Okay side to that XX, with portion mid to strong XX%

Dave Zinsner

again. support we or not wafers the don't think future, foreseeable that mentioned. no few continue wafers. we're adding transitions DRAM In growth. transitions, But Forget We Sanjay with NAND. as no It's wafers be the the all to in we adding for NAND, from adding see, in can might years, either DRAM next we

Toshiya Hari

Thank you.

Latif Masud

Thank you.

Aaron from Wells of Rakers comes question Fargo. next Our

Your please. question,

Aaron Rakers

dynamics, particularly profile to bit I are taking about for ratio And around Thanks kind and more progression forward, bit the what move center market. demand I'm move you little growth as are how as forward ask wanted the thinking just Yeah. we end from profile CPUs? a question. the to server data next next-generation the you of I'm as a to demand the of about we expectations of seeing that the the about bit the data curious perspective. as the you're rolling compute over how curious far year forward memory and center.

Sanjay Mehrotra

data for and trends center both the NAND, Within DRAM would strong. demand be

DRAM as average the industry, fact, future for in the market the and grow foreseeable has continue center In will today the NAND than to data of and largest faster well. both for NAND, become and DRAM

DDRX, new NAND. a greater occurring memory be And the as XX% bandwidth as at per into higher And driven as from trend DDRX about addressing need DRAM, therefore, couple for course around will are So, the of years to few more data-intensive in workloads. more and BOM mean it's the and memory ago as years, a in for centers get memory going the core, few for well new driving production. the new XX% towards of storage part well as that CPUs, a transition going really architectures, cores cores, then a servers in gigabytes and is server greater is being about attached next well. of solution. of from The is the to per AI going enabling in processors, is frame time launched data more years’ now, BOM XX%

more higher value, Of course, enable the performance applications. in

in So data HBM, going and These the also be course these of over that continuing of the and CXL center to ultra-bandwidth will adoption grow the is, be course, solutions. on, year will space.

will So over on for each these growing in average content of a per be applications. both also CAGR XX% SSD basis and server DRAM

ahead, product Micron providing opportunity displacing server HDDs, with very is center a strong of us for in placed and to portfolio own in terms our SSDs density of applications. respect So, data well and memory modules higher terms

on the on bigger as the of the data expanding the on this and we for gets product bigger, us, area So are And very focused our cloud is center focus market SSDs. are data well-positioned. center continue we to portfolio, gets and side particularly an

this and for So, services critical the cloud just our the memory is value customers we for really look solutions at as The providing and that opportunity as space, keep industry, providing, in this that strong mind as a well resurgence are as year in storage Micron. for a that Calendar centers to enterprise well in it trends as 'XX, well 'XX, year Fiscal for overall well healthy the driving demand as grows slower are in seeing at as enterprise in beyond. while a rate we compared applications data cloud, growth

Aaron Rakers

a I'm the to on operationally or on Company? more from Company learn repurchases. versus do last a repurchases? share about need run And How cash How comfortably managing curious the follow-up, do much you liquidity start in think share the balance quick the to you cash-on-hand perspective Dave, as as just continuing implement sheet the then quarter, some you

Dave Zinsner

but opportunity as holding We of unused liquidity that. roughly need, a We is is relates about that obviously of are of liquidity so obviously have it we billion cash a the revenue than our less than of course which $X.X XXs did to revolver, as buyback. in good liquidity, more the percent terms is

free as Lehi of sale utilized fiscal also going from to As returns the shareholders. cash can expecting I well. mentioned, flow $XXX to million be we're we for Fab our in are And receive healthy 'XX that also

we be of And return that. we'll and higher in obviously least to leverage than so, that. We've it mostly And go buyback, form the could at buyback. dividends XX% to committed able of

plan, for our it repurchases. about which course authorized have be we aggressive we'll Our viewed still billion authorized Quarter, of how the if buying And stock. we see we plan back is in left be stock weak, $X the in Fourth

Aaron Rakers

you. Thank Perfect.

Latif Masud

you. Thank

Joe Moore from of comes question next Stanley. Our Morgan go Please ahead.

Joe Moore

on of for for demand creates Great. and Thank Where affecting to seems like is NAND that from that newer products? wonder bit it there of address issues getting terms a if quite the in both the guys? I How you it's you what terms qualified a older products? are in X-alpha going transitions you. that DRAM in standpoint you Are and any could our mix GX.

Sanjay Mehrotra

broadening as our that production. Actually, the shipments I, than X-alpha the earlier, already qualifications well well node, well in in space, the of are to we customer node. ramped markets these FG Right XXX as that and faster other layers I on mentioned of of NAND yields DRAM, well node the fact, the generation very as to And ahead FG in up are XZ terms as plan prior we are last highlighted with its our actually these well nodes, going XX well. parts new that to as these in PC very prior as doing shipping in our have XX% yields nodes X-alpha our as respect plans, ramping

mobile with X-million-unit went are projects. In just of to are RAM in Company. the closely time. history us a product XXX-layer shipments Fastest qualifying introduction the record working from these NAND-based in customers fact, in

into doing our So, the very as baked production, have in this guidance deployment in terms as as in expectations. the is revenue, in course, with provided well terms all well as And, of we norms our of ourselves. are that these cost of marketplace for well all

Joe Moore

much. very you Great. Thank

Latif Masud

Thank you.

question John Credit from Our of next Suisse. comes Pitzer

open. Your line is

John Pitzer

memory into the three to something headwinds ask are guess eight different business quarter, the you cycle cycles. guess expansion. and it. normally February growth, environment short-lived, Thanks as has execution. importantly more? pause been at into and unabated guys. about to we in into this I is Congratulations upturn this I just for relatively you year solid margin that least prior this plateaued very quarters might normal what confident your different and letting The Thanks, the have a we questions. And current on makes go read me memory supposed Sanjay, quarters What's than Typically, not cycle? characterizing ASP, date, seasonal you're buck as

Sanjay Mehrotra

in experienced are because data strong, COVID, supply demand the out further our being gets by the chain but end-user other see short-lived we mentioning course, lot semiconductor are of course, on to supply market that PC customers. the of trends, it and that strong fashion, that as impacting -- their the and of of are demand it, unmet longer, are as So adjusting to market trends. the my that's out. on part regarding different because comment next Intelligent clear in our are some of demand is outside overall customers But the demand PC was of short-lived with And with shortages demand related our our experienced respect the to be Edge, part experienced in to that, what of circular respect end-user markets only was customers, discussed them the to where comment few the and memory, an just different are Whereby, as on demand we accelerated and the the was mentioning pushed PCs the to other XG actually handing demand some the very earlier, parts shortages center PC, demand still in demand their and AI semi-conductor I time well decisions they customers of nature. being have strong stronger also what market, driven devices for by purchases longer. months PC short-lived I stretching markets, trends strong the in chain the of the underlying in of from stretches make the over user shortages was

growth said, drivers longer making well. demand as those So, as actually I for stronger

So, pent-up you can call it but referring that's to. demand, what I'm

overall the things demand are supply strong here on chain So, on the side, aspects.

this is take long, course, Of of to semiconductors the semiconductor that chain several quarters the something is Parts have improvements. and supply this seen continue in the time to will improve. already lead

a course over expectation industry, Our over improve is has memory to the of in And years our industry, growth. below brought that to beyond our as the many has target that industry, the the course level across will mind that coming inventory keep phenomenon supply the years, the that levels. Micron inventory quarters. its has continue well you're couple to how ship certainly the is these Also fact, the in leanest the of occurred in of seeing this stepped into inventory last

but has from order able the meet taken memory as inventory in the our such supply and to is to customers sure levels, time-to-time the which customer we replenished has that something common also to been ahead, are is it have will not industry. meet to make have requirements, in So, be service change. inventory to demand that look suppliers only will requirements, this And all to low we replenish the that their to growth

replenish calendar So, that very the year these healthy lean demand-supply of 'XX-time drive will a inventory well. inventory in as as factors need levels for as all balance well by as to suppliers, frame well, are

of shortages is some chain customers. own terms our of our being that by some this in yes, are supply and experienced So

XX them of be the take frame. the [Indiscernible]. over may semi-conductor these expect through By 'XX-time on addressed some the to time and We shortages some the of course of of will end maybe be ecosystem

investments discussed industry. healthy supply-demand have in the including environment the time CapEx this to expect lead year the supply, all the that we of and through dynamics to through the the way be them course improving gone that drivers underlying continue and calendar industry dynamics strong the will in 'XX. But to I However, demand the lean of all the supply prudent a of on

solid demand growth really the up suppliers well an 'XX our industry and and profitability for well. really of revenue revenue supply we expectations, in course, capabilities, that profitability it's think as combination, combination and projected their on I fiscal in have shipment based have will - that capabilities drivers So, 'XX, us strong and sets and as we of record the year

John Pitzer

pushing guidance down as a November Sanjay, for comments very were decision a is follow-on, quick by curious much to How bits you being to that driven are just hold those help off of be there's that's inventory just demand and is I'm to bids those the your pricing, quarter. helpful. down? and why by me market be much bits bits that the for no in conscious how

Sanjay Mehrotra

guidance is the of well, at seeing around overall is our midpoint year. FQX any assessment quarter supply when really our our non-memory and Again, what aspects the well. some projection the which of the marketplace the you certainly of where our and look as FQX, meet and that seasonality But of capabilities customers XX%, can PC, is of higher main the for this takes to of terms a levels, where demand the impacted mind lean. demand It our and at shortages, target is that to ability are this, thing our at about demand. keep And the some overall, last But inventories we well. the is as is impacted. there respect chain components by inventory that in very below account level shortages our ship for at we in impacting some component function in the of of is than as this really into leanest is to overall, And FQX, the XX% guidance our point same own

we So, ship. impacting of for customers, what our in inventory of capability is can some the overall terms ability our also

John Pitzer

Thank you. Perfect.

Latif Masud

Thank you.

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

line Your is open.

Timothy Arcuri

down back a Dave, guess on I question a on DRAM earlier. percent you're lot. deep would on points wanted basis the only down revenue down like a that. a I quarter gross sounds modestly I both guidance; to NAND. asked margin. to and I Thanks question I like your XXX had go appreciate at it It's NAND

much. delta the aren't about the would I very well, and pricing. probably you costs somebody on coming you like asked more And sounds down think costs DRAM it So, then side. said, is

Is seems you made I'm mixed some were missing. back is out guess I figure quarter? maybe the comments a margin ASP to people how So, of so trying more gross sustainable this that to good? that going It trend like

next. that if for So, can you I'm us wondering flip

Dave Zinsner

Tim. sure Yes,

some muted. is down mix what driving in and pricing, the gross you factor relatively driving There gross somewhere Maybe function that that's Obviously, best that. changes rest to way can't are cost range have the and bring mix going So is gross pricing. be major Remember margin infer might Obviously, within we a will of to impact cost of declines to gave. be margin, margins. if to the it the you it. be out pricing will the predominant not in factors say that

Timothy Arcuri

Got it.

Okay. And then I guess just last thing.

X-alpha and reached reached you said XZ. you So so XXX on and just on crossover the curve, -- production cost on you’re

to given when the effect Thanks. that favorable in in on So production much crossover what's really bend you've lag a starts cost -- curve terms of how like those direction, that things. had the

Dave Zinsner

getting cost next that them drive reductions hit clear, much anticipate Well, will year, and of we're back we side. the cost way, year. end a declines. XXX, which we've hard perspective, because just end, it of the By the do the impacted Xz, bit benefiting us us as to see for on we little impacting at a to But obviously is hit the X-alpha crossover be the on from may both front-end cost be good it's

more every and and front-end for see terms I may that a couple structure we'll cost in first because see this, and drive in be noticeable other be quarter. So, course, of mix cost to you'll of be only show higher on higher higher-value products products, well. gross to perspective quarters, behind our mix as calculations structure. get of us margins. which is higher richer with -- to bit the -- be from after as And get as of of a our bit a will good. going well obviously always back-end I I our be but profitability, up Again, notes you heck, the think that, goal. they per side we're cost Good think The think get higher-value per not on headwind cost more of the mix basis of to like the factor costs, we will that But

that's course year also picture the good kind well. of over the distorts distort So a of that the will and picture strategy, the but as

Timothy Arcuri

Awesome. Perfect. you. Thank

Operator

call. Thank you. This today's Thank you concludes for participating. conference

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