Micron Technology (MU)

Farhan Ahmad Vice President of Investor Relations
Sanjay Mehrotra President and Chief Executive Officer
Dave Zinsner Chief Financial Officer
C.J. Muse Evercore
Vivek Arya Bank of America
John Pitzer Credit Suisse
Timothy Arcuri UBS
Mehdi Hosseini SFG
Joe Moore Morgan Stanley
Toshiya Hari Goldman Sachs
Shannon Cross Cross Research
Call transcript
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Hello. Thank you for standing by, and welcome to Micron's First Quarter 2022 Financial Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference may be recorded. now today, hand of Farhan would to conference Investor I speaker your Ahmad, Instructions] like the to over Relations. [Operator Vice President ahead. go Please

Farhan Ahmad

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

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

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

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

follow You Twitter MicronTech. at on us can

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

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

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

Sanjay Mehrotra

year-over-year fiscal outstanding afternoon, Farhan. you, achieving solid and profitability. strong growth everyone. Good Thank results revenue delivered in Micron QX,

in product our us strong and profitability track robust record momentum and keep to year the XXXX. on fiscal to Our deliver portfolio revenue start

are achieving center MediaTek DDRXX continues along launching wins, GDDRXX We year graphics these excellent achieved for building us DRAM product solution, data are customer Micron's our DDRX major to SSD, secular end and our markets. focus position demand XXXX and The first products card. and Radeon integrated vertically significant shipping first We memory XXX-layer in and AMD's RX with for fiscal products strongly the low-power our our yields, with world's leadership validating including deepening product value now X-alpha shareholder rapidly beyond. our shipping industry-leading and technology our relationships, customer and significant NAND and introducing NVMe GenX ramping across advancements storage, to create on and 'XX our and

With ramp successful quarters X-alpha of NAND our these now of accounts major NAND nodes of and bit majority DRAM NAND the industry several DRAM production. ahead bit leading-edge The production the and XXX-layer and the are combination for end in across market of X-alpha the XZ of markets, represents technologies. we majority our of deployment products process DRAM XXX-layer

fiscal on these 'XX. sets advanced up Our year successful strong the for execution us nodes

our to We technology are decade. for next investing scale the also

map to XXXX in CMOS we replacement with maintain in leadership early many and X-gamma come. our transitioned to lithography with generations NAND, help gate have for QLC years existing immersion DRAM leadership. road for We our successfully in our maintain multi-patterning density And a have several EUV leveraging for are will leadership bit Integrating DRAM volume us to a planning scale technology node. on while and production to EUV expertise and

is leader Micron industry the being a quality ranking quality. two-thirds our technology leader, of with number one to customers us addition In in

and our to a challenges, deep supply manufacturing support network, ongoing NOR has partner customers innovation customers. Micron DRAM, and semiconductor suppliers have we chain with a supplier strategic and with strong its leader supply NAND to quality our As leveraged technology become as And related and continuity. global partnerships an

long-term a seeing around when over annual side, accounted five including the commitment XX% increase on collaboration and comes years of of the for from revenue. use significant supply planning, they On volume-based greater from XX% we agreements, of ago Today, agreements. customer are our revenue our

On we need have strategic manufacture secure agreements the supplier products. our side, components supply certain that entered of to we into to

a these us current expected the result improve As of XXXX. is gradually for of supply calendar these tight agreements, throughout components to

decades, the thanks revenue markets. to years data two diversity and of edge semiconductor review the to and industry Demand AI, we has rest trend storage over outpaced the the Memory continue us this intelligent extending broad, EV devices. let XG for of our expect last memory to user for storage the and end a come, to center adoption. Now and growing is to from and

In will build-out worlds even the and addition, of of often the referred to significant the offer as immersive due in virtual use opportunity memory more intensive Metaverse applications. these to storage

FQX, with in our Our qualifications we memory storage, very expect we BOM more and first and several market of growing new and and cloud by resurgence and SSDs. product and of. grew is HDDs and ongoing a of growth year-over-year markets. team's AI; achievements execution it a customer discuss is outstanding, the storage on over revenue new IT highlight the computing result data center and launches the Data Memory than I decade. continued quarter, largest the and investments. by proud I XX% of the of the displacement memory portion demand enterprise heterogenous server been as center as of as supported will portfolio for end product our are to broader storage achievements strengthening outpace some has these market next architectures; In workloads data-intensive the of fiscal

our In GenX been portfolio customers. data launched strong key center internally contributed the Our SSD with utilize and XXXXSSD strengthening along firmware, controller has DRAM first NAND. QX, qualified our product by the product we also This profitability. NVMe to NVMe already and to two developed

NVMe FQX in sales by center our Looking revenues ahead, in increased ramp strong driven SSD of we expect products. a data our SSD

as DDRX demand new product strong leading for in server launched In customers see 'XX. and launches calendar the prepare addition, we industry's

expectations and While ongoing products. from non-memory strong, sequentially with PC declined component production in last inventory demand Consistent is the NAND inventory our us, at remains impact earnings largely of PC signs call, of PC end we behind adjustment our clients related and shortages customers due seeing adjustments in are end in and we customer DRAM now market. the most this articulated the stabilization revenue to demand

should in This work calendar shift we higher to invest to line PCs as year PC to in As be year XXXX, those is calendar we Mix with unit of projected enter XXXX. XXXX companies sales calendar for year be projected of expect environments. support shipments hybrid DRAM and PC enterprise demand PC NAND the of become mix majority increase of grown average five industry and unit is XX% has PC PC Low-power market content. in today the to bit the the DRAM DRAM in to years.

this our solutions DRAM, OEMs memory DDRX supply as we PC production demand the products benefit well first impacting due positioned is to at modules. well PCIe several client In XXX-layer from trend. significantly Across in ability low-power qualifications component industry-leading DDRX are revenues memory. shortages build achieved and exceeding volume non-memory PC for SSD to suppliers' we our Given FQX, of as our industry, GenX to DDRX for

to of XXXX, to XXXX. through shortages in moderate these DDRX shipments bit calendar to grow enabling expect levels half the meaningful We of second

and solutions Micron sequentially to are suppliers. advantage fast-growing with industry-leading of product product market, increased the an our with year-over-year. broad In graphics for a our excellent We DDRX GPU this transition revenue holds and the position portfolio proprietary PCs. take partnerships poised featuring GDDRXX We with line leading

to Our were units of entire applications proprietary strengthen, GDDRXX year-over-year. phones, continues of including increased XXX to the success, FQX, revenue XXX XG graphics and mobile calendar demand than DRAM recent XG integration the our to continued and we storage the than pleased forecast more XG, memory announce availability value for XX% RX XG XX% have XXXX high-end memory 'XX. XG solutions continues GDDRX to Mobile sales are in versus year to AMD's market. NVIDIA's million to content memory transition on more GDDRX the In and gaming units smartphone extending calendar market phones. on higher with cards. forecast from 'XX, card, content-hungry million had gaming FQX double Radeon year which supported NAND exceed by

as mobile from benefit expect innovation content applications. continue XG-enabled XG phones in further We to increasing

was several year in last and in leadership industry-first validated DRAM, our Micron's MediaTek, demonstrating Following sampled with FQX, further market. mobile X-alpha-based the world's mobile fastest LPDDRXX, the

end-consumer positioned to a shortages these as demand. production and markets We decade end well share be year non-memory expect industrial we revenue of storage below near term, over leader to next from unit markets. and significantly our the and be are flat 'XX In XX% the calendar with exceptionally the component are year-over-year, limiting automotive coming market auto fastest-growing memory over

of year-over-year However, in-vehicle as remained our a accelerates. strong content growth EV from XX% especially which FQX rapidly, applications, infotainment driver as and assistance revenue growth adoption are at auto advancing result

EVs like New NAND. center of gigabytes terabyte on year a and are wheels, examples model already level examples with XXXX over are three over seeing of XXX supporting we capability becoming X DRAM EVs and with autonomous data also of

in entered non-memory home continued in In automotive shortages XX% content year-over-year such We applications VR revenue saw than 'XX fueled our market with we year-over-year to factory and applications security to the such In UMC into as year our ease. customers auto automation IoT, a headsets industrial ramp calendar supply unit addition solutions as XX% systems. to smart increase production we driven NAND improve strengthens In new consumer than growth, to 'XX. with growth, we agreement and ability continued revenue as more more component saw IoT, by devices. as demand growth, year expect support calendar by

infrastructure. accelerate data-intensive We by applications further of expect IoT demand powered adoption speeds to XG intelligent as the edge trends

view growth and unchanged is and largely demand Our supply last XXXX XXXX calendar quarter. of industry from calendar bit

the low XX% XXXX growth to bit growth bit industry We and XX% DRAM demand expect to in be range in the calendar industry range. high be NAND demand

be customer in by end some automotive data of be led view demand each. anticipate demand We CAGRs deployments, strength in have industry of across out in the calendar pushed growth XXXX and many constrained underlying the demand to calendar NAND, line growth mid our center long-term for with XG for markets. volume XX% to DRAM bit server expect teens and and in bills approximately increasing shipments continued high and bit for We XXXX supply demand markets. Non-memory mobile shortages industrial to

While these demand expect growth. cause memory ease our shortages storage demand, some them through variability XXXX, to and supporting may we to

Turning to year. for the supply expectations bit our

very healthy demand. balance Micron's with year supply be will lean 'XX. bit Given prudent line we industry growth in NAND and CapEx year a expect and in supplier for DRAM calendar calendar industry inventories, industry supply-demand

aided non-memory will bit of half to growth of the stronger product second our customer demand, our with second and DRAM the planning X-alpha supply 'XX, shipments record fiscal by year easing year. shipment with are in solid shortages be NAND-based on of half bit impact together profitability and the deliver The on We fiscal revenue with additional component in products. qualifications XXX-layer stronger

As the expected reductions. X-alpha providing DRAM 'XX, XXX-layer us in with continued ramps good are front-end cost fiscal NAND of year and

before, supply expect costs, term. efforts mentioned business and industry be continuity to over customers to year and we long for assembly our bit competitive in with consistent Overall, are we the with per our fiscal headwinds and the the increase 'XX packaging As resilience annual to cost our reductions chain provide industry. broader

Turning to capital expenditures.

range to in We CapEx billion. of year 'XX the $XX fiscal $XX billion expect

of with the to middle and DRAM through we decade. both growth alone bit achieve supply For no NAND, the plan transitions

need the Beyond capacity add anticipate this time DRAM. horizon, for greenfield we to wafer

$XXX to the meet capacity to However, announced R&D. without sufficient industry our over we the intent growth, memory invest demand globally need for our manufacturing scaling We next continued be billion expect wafer growth XD additions. decade leading-edge than in recently NAND for more supply to and

our to it we over plans world, these These R&D, future persistent memory establish memory in investments. part Atlanta. long-term will to design in generate ability state-of-the-art consider our I with forward the storage support and U.S., look to As to We as announced now Dave. governments demand reflect commitment center investing returns including our the expansion. confidence to of sites and a on in we growth to for in turn around working announcements

Dave Zinsner

up coming approximately Thanks, results generating outstanding flow. as X% in guidance Total all was $X.X EPS while ranges Sanjay. to quarter-over-quarter FQX related FQX to was also revenue with year Micron Sanjay component free up the within was start decline weakness cash fiscal revenue, $X.X representing to customers, healthy our delivered earlier. margin revenue at sequential XX% DRAM The in the up shortages lower was down revenue year-over-year. billion, predominantly FQX our non-memory billion, attributable DRAM and NAND revenue of and discussed quarter-over-quarter Micron's Sequentially, mid-single-digit bit shipments Sequential representing quarter-over-quarter in declined and and percentage range, declined billion, NAND were X% XX% bid percentage of the and percentage total ASPs revenue approximately declined mid-single-digit was the revenue. declined year-over-year. in $X.X XX% was shipments ASPs X% revenue total declined revenue. year-over-year. flat XX% approximately range. range. XX% single-digit while

trends and quarter-over-quarter Cloud, billion, Business benefited graphics fifth quarter X% Now progress was turning year-over-year. the business XX% XXX-layer XX% and revenue quarter. revenue Networking profitability Revenue sequentially. up managed MCP made revenues declined XX% for Revenue ramping node. by Business FQX to revenue Compute year-over-year. Micron XX% client $X.X up the our consecutive Business and the in FQX was and down of billion, X% Storage sequentially the for FQX Unit while $X.X and down quarter, enterprise in performed $X.X in from billion, XX% continues and up surpassed well up Mobile in was to unit. Unit the the SBU NAND from for lead for our prior Mobile the year-over-year. in Unit Revenue strong

of Operating were prior margin the a in operating gross XX gross the quarter. the from Business our was by was million. NAND revenue FQX EBU was up was $X.X at execution. XX% $XXX quarter. from to midpoint sequentially, EBU of and sales revenue higher the our for levels second highest Embedded mix down and in driven approximately and headwind consolidated prior in down The A basis Finally, billion, margin. XX% XX% gross FQX history. record strong Unit expenses FQX the year-over-year margin margin guidance points improved for

strengthen from and operating 'XX down FQX income portfolio. the in FY to $X.X XX% prior approximately continue expect strong adjusted to up EBITDA in XX% billion, FQX our up an XX%, 'XX was of slightly in FY margin prior down We R&D margin up be to year. operating from we $X.XX, an over at FQX year. of EBITDA resulting XX% as from ago invest year prior $X.X up of in XX%, $X.XX in the approximately EPS from billion, flat Micron in share from $X.XX the the Ventures gains per were earnings resulting in XX% quarter. quarter $X.XX from and investments. Non-GAAP from included and FQX in FQX was

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

be and in will profitability, the be expect to continue it $XX we generated in the between loaded cash billion, billion We fiscal fiscal million $XXX and XXXX Due to front-end $XX flow. CapEx year. to free and strong approximately revenue

returned the or received In the which quarter. closed in the X.X fab, in represented flow million FQX. during the $XXX our of XX% addition, we repurchases payment, to million generated completed Lehi of $XXX We shares share quarter. which in Including million from quarter, approximately dividend $XXX approximately the free million approximately we cash around sale the than more of shareholders

paid We quarterly dividend committed of approved flow free of Board shareholders dividends of remain Directors to buybacks. X. of than on returning a on $X.XX of XX XX% record cross-cycle more cash a the addition, through January combination our January and In to to be

we've opportunistic when As to at before, we share more mentioned in and shares are the larger will value. repurchases aggressive discounts intrinsic be trading

to inventory were was XXX days target FQX XX range within quarter of average days our for ending the $X.X normal XXX and Our billion, days.

with than be We XXX cash FY our liquidity. quarter of for $XX and 'XX of and days ended year. at billion supply of days billion expect the expect We NAND investments with DRAM inventory total $XX.X to exit total tight we less as the and to

debt $X total was billion. Our FQX

from commitment sustainability-focused the emissions, reducing total billion inaugural several and notes use was with maturity milestones generation. and and sustainability-linked FQX, two disabled bonds energy The interest XXXX. used our redeem Micron's offering XXXX social along bond and The from billion, to on debt senior average maturing gas bonds, recognized and women-owned long finance hand, waste veteran in the Following institutions greenhouse bond proceeds enhancing long green The facility will leverage-neutral long from and projects, were inaugural continuing $X bonds. green with achieved $X cash proceeds our bond eligible net to participated. financial credit for we and May The the four notes these Micron: including from were $X net and expense increasing bank nine Company's improving Micron, our of minority our essentially proceeds in and important environmental for years to result nationally the performance weighted our while strong our water years. and billion in successful and green

quarter. our to and in fiscal stabilization customers demand our for across outlook PC second turning end starting for remains markets. see the solid We're demand Now to

On mix a gross improvements that the NAND. positive margin front, factor we in are margins expect for

normal COVID-XX front-end continue benefit expenses component XXX-layer of from due to to headwinds we NAND. costs have X-alpha assembly, and to and our While cost and mitigation DRAM test above costs, our ramp continue

We in DRAM expect for mind, our these expenses product non-GAAP in guidance both all and and FQX and as to With next-generation new products follows. technologies sequentially NAND we our map. as for invest operating increase accelerate factors is road

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

$X.XX, tax non-GAAP approximately of count fully to billion plus EPS for minus or FQX. Based expect X.XX rate shares, we on be diluted We expect our approximately $X.XX. share be XX% a to

strong the outpaced deliver cash that business execution us and we averaged in now profitability has I'll future. flow margins strong financial FQX 'XX. our solid us averaged cross-cycle delivering FY turn free gross and and track product performance growth semiconductor performance, solid have to industry, keep on Micron's over can operating outlook In broader revenue in give technology significantly and around FQX Sanjay. back confidence have sustain is momentum closing, The record XX% it Our to and results XX%. margins the revenue and solid

Sanjay Mehrotra

played Thank you, culture significant Micron's a role results. has in our Dave. strong driving

underrepresented life Our for information college report introduced month, highlights as across achieving accomplishments inspiration as XXXX groups that DEI which X%. equity the an include to we team among vision year. as pay this enrich representation DEI uses new how world is comprehensive we These serves released Micron's All, commitments we Earlier for well significant all both foundation For by to the everything do. transform for six of accomplishments entitled last global and our graduate a hires increasing

to in production invest important. is the initiatives clear truly the U.S. to economic in here publicly look and or opportunity also equal the This proliferation We expanded FABS our all been supply time. The exciting report consolidated deployment Micron remains industry. website. a center The employment disclosed is and and Act broad forward available opportunities the industries We creating EV deliver working of innovate XG edge, and on with customers. intelligent ensuring around first the for the CHIPS Demand security of storage more data Act growth, continued integration governments the other of AI, in through It both EEO-X growth the for to and domestic are value has more strong. data never world. countries memory for across has and never in new and time semiconductors strategic been adoption to importance for to of our customers

ahead seize Our our opportunities of us. now open robust We'll questions. the team and energized to for business is is growing, and


C.J. Evercore. first [Operator with Our question Instructions] Muse comes from

You your may proceed question. with

C.J. Muse

the in really Obviously, current cycle PC more would depth seen last any kind on is guess cycle. we've of from supply-demand quarter, question the kitting you issues. be first this different I as environment from around other

appears to resolved. Now be that largely

that Curious the shortages 'XX you're about sequential all, auto. middle kind first the 'XX? second XXXX, normal half seasonality, of in at into seeing and if of of tightness bit about talked thinking terms interpret fiscal and in half ongoing you're should growth calendar part how into of and You've how beyond where we in

Sanjay Mehrotra

C.J. you, Thank

half by we holidays to on the to too, that These the we our demand be and strong their growth respect our And listeners for experienced end us. So happy trends of have demand said, been easing to all trends, we -- bit shortages have to customers strong. of With the see base. customer as constrained supported second course, across you, call. shortages our have demand

the you particularly products. So demand quarter, us, of for course shortages a there the in And some our some as tailwind and know, current XXXX, be consumer-oriented that as segments the of parts supply will storage more that for are chain of aspect ease memory for in is of business. during course, seasonality,

there a be of stronger yes, half, will Then our well. seasonality second the aspect So is product customers. as cycles

big center storage memory workloads for new in New data calendar processor, with data memory more cores enabled during that architectures with driving with AI are in year and new -- the more processors, products those in 'XX. channels, more greater demand and

And trends a new well to NAND having that's with gigabytes And expect well. content. that strong the year We EVs are talked and more will calendar this EVs DRAM of as have up strong of than more build XG sold. some for more data about center year drive 'XX to trend of smartphones content being is be certainly, as of increases starting the to terabyte content, a some XXX respect with vehicles we to as, continues of demand. XG, automotive, phones course,

automotive, And have million actually, automobiles overall, have versus XX it, more at content. about if servers you So we think the devices million. XX in about

with automobiles of increasing Xx content. So

strong XXXX. just a not beyond of well. driver, demand this be So mean, that will course, I as for

looking of here work the And are are we secular they demand how we through own their customers, So rolling understand closely trends and our calendar out with course, at demand 'XX. in nature.

trends demand are strong. So

in 'XX. calendar environment supply expect year We healthy demand

time the calendar supply have year-over-year teens suppliers, gives the course, and That, the that of of regarding we supply 'XX approximately us the on as to we is confidence the highlighted, And of CapEx. been has year terms mid-teens equipment too, And disciplined to growth outlook. XX%. side, in expect but constraints, been DRAM lead it there. supply also course, long disciplined NAND has by high in CapEx On side, supply be

aspects are on 'XX So well profitability fiscal well as strong I second believe supply described deliver for record the all that a overall, we to strong and positioned here robust just as a demand we well aspects revenue half as based year as profitability.

C.J. Muse

very That's helpful.

follow-up, to you side? expectations normalization speak COVID-related be for You front-end And thinking down. your highlighted expenses? about product about are can the Dave, how quick in any thinking cost shifts we strong Curious portfolio mix cost of how in a As should you calendar 'XX?

Dave Zinsner

Sure. Thanks, C.J. and well. happy holidays as

happy me join telling in Let Sanjay, everybody holidays. Yes.

perspective So it's let second. step from think me a back margin the on front cost I for it on touching little just a -- because bit just worth a

very margins, saw quarter, So we'd as you be. in right we first gross line with we delivered thought the XX%, where in strong

Just year XX%. our were a gross margins keep a that bit just over ago, just in mind little

good and is also this beginnings the a a pricing, and margins. discipline from the we gross this it of cost year pretty improvement And from So X-alpha of significant comes and in year. into of XXX-layer some the obviously of comes but last that course, ramp that saw

we The -- that continue a question your will that As solutions, seeing is and root us do we to of business the the into and costs a we to as be us for of quarter, we both these Those product beneficial. terms into terms from for cost X-alpha improve we're the where good also than the And high-value our of is with do so we expect good from node, that, in through they other mix year they mentioned, a Sanjay COVID delivering of we calls that other these expect continue Also, the when that will to high. I that the XXX-layer associated look this very quite of of the through question expect and to say that inflationary for ahead abate, some see But year. and perspective through control to second reductions likely the well tailwind lot executing have should are pressure. continue of levels mitigation areas year. over cost have continue year. ROI but business Hard -- we're us, profitability, at reductions. think in ROIC

really So, we're think in a a is good place. good I what --


question next America. Vivek Our of with comes from Bank Arya

You may your with proceed question.

Vivek Arya

are component you year from half to 'XX an expectation that to mentioned, customers as is I'm less start comment? your So expect term? shipments fiscal see is perspective. Or PC You customers do Sanjay a a of near second PC that you to when starting of to constrained curious, that improve?

Sanjay Mehrotra

is to saw So, earnings seen ago. still have all supply months earnings the their end PCs, though making non-memory call, we demand to of -- comment even we had PC chain customers as their certain components, hard three them And highlighted that call thereby get their relative our in we had last of what challenges, it production limiting for PCs was strong.

year a and is we result 'XX as seen behind level. noted is adjustment similar inventory to year levels front ago. sales as shortages, non-component unit calendar now of PC on them, that certainly seeing recovery And 'XX, So yes, total I the of we calendar that are their the that compared to three compared was have to their what be that, that demand PC largely months overall, existed expect we for

as will recovering we be expect of for forward 'XX. So in us PC, we calendar in terms demand here year go

Vivek Arya

these agreements. Are helpful. or these long-term cyclical now are of Very perspective? And from fixed industry, mentioned you kind my that? take-or-pay into nature revenues are price how assumptions Just a based of volume dependable of margin the follow-up, given the on your Right. or these Sanjay, or arrangements? contracts What goes for XX%

Sanjay Mehrotra

on today, used than and So And our over about XX% LTAs. but these appropriately are well. as we again, do I mix greater revenue would to of ago, like help of greater These our haul, trust What just to they dialogue remind nonbinding customers. in the closer continuing And greater build our us the sufficient sentiment you us have plan available to LTAs bring us planning, done LTAs and of value the XX% to and closer years is to because that between ago, build to a that and there and enables have on make about much transparency. to of accountability And memory have four five the is supply course based increase. customer on supply their have our revenue we memory of forecast really to is more enable their nature, years there LTAs. supply visibility, long based is wanting of partners us sure

product. work product with our and it overall well helps we portfolio So and as portfolio closely us our decide manage of and mix the them, product the

And not agreements. So generally and give as volume-targeted help us They're plan customers again, last upon continuing going over forward these been forward of well. to visibility. but better strengthen course to based they our far look us greater worked and to LTAs on on, we are do as these agreements have well the years, our continue improved business these as pricing, few


Pitzer comes Credit John question next from Suisse. with Our

may with proceed your You question.

John Pitzer

the on to results. demand want Congratulations 'XX solid your back expectation bit for mid-to-high in to for go year I calendar Sanjay, of DRAM industry growth teens.

to for lot sounds deceleration of with be would you've in got that year a this from despite like a that's fact big your long-term line bit it demand, mix kind it view be While of relatively mix the going server on tailwinds server. next DRAM per architectural side PC smartphone the improving new or good whether increase are shifts year, improving, that and it units significantly density

next your gated peers industry? that by kind gated control? expectation you I'm being being Is that when year. what gated and your view by demand? for Is supply curious, can by so the it your of to of components outside you look And being Is of it at

Sanjay Mehrotra

certainly, So supply think to is you're I that right note limited.

there of exiting CapEx course, as inventories as in various that And chain And was industries growth, supply levels industry terms industry. in all earlier, in as of inventory know, I highlighted you of today long the lead shortages the has lean have time well. been at disciplined. Supplier well. equipment course, supply discussed, are XXXX, has As of the given across aspects been that

to year limited. teens high at So course, calendar and of really strong is really overall, is discussed. What are the would of is DRAM really you demand rather The like of overall on CAGR. strong. growth, have of 'XX, trends when have And long-term look to CAGR trends look it driving at I to all demand highlight we that there because you mid-teens is long-term supply

at secular more in our And are for provided year we'll trends. the we have continue so storage. is of and to healthy on here growth, in nature, course, supply of what estimation environment industry look the expect, regarding memory year, Essentially, longer-term this monitor you continue can't expect and look what driving side a to just you is And we These 'XX, at calendar trends this. one demand we to DRAM. demand particularly bit have

John Pitzer

helpful. And That's Dave... then,

Sanjay Mehrotra

have again, comments is think, that suppliers And supply we DRAM that down, of it's on I by guided said but my other in in is are suppliers also CapEx industry. the based DRAM have ourselves in our some the other

John Pitzer

of at of rate issues you spend? came sort year, That's do any fiscal but OpEx? buckets you of the investing helpful. of two end think And linearity this what And on then just big And balance OpEx quarter, a about think three Dave, quarter. first want? 'XX at and about quick Were fiscal the fiscal are as for as you from quarter sort you you we low there follow-up as of kind in of OpEx how investment the the the are both an year the or that of the pandemic year, last incremental characterized line, preventing

Dave Zinsner


makes lower -- say little this it it market, challenging. right tightness it's the bit of note in But the which, there's the So single to to prequalification lumpy year. in over was that first quarter the course, between just and I'd transom of sometimes a quarter and you those the quarter contributor little be a second a And OpEx labor expenses the of biggest can R&D first related fall expenses. and fiscal of just

out the very at situation. hit it more And quarter, a turns year terms didn't quarter. they just the hit second so predicting but we for spend timing the of confident that level first It's quarter. we same really will we the last will in in in as they feel were absolute that And

the we're step-up to in this quarter will of SG&A will for fiscal be us So roughly, third R&D drive it's lower for we And get it, that the and the of we'll and number OpEx rate have second much But sequential in. then bit overall, fourth kind that. a quarter. call in a XX% fiscal growth below


question with Our Timothy next Arcuri comes UBS. from

may You question. proceed your with

Timothy Arcuri

the for impact first through my from us $XXX maybe quarter you. is question some walk the you there were Dave, was worth a there Can I million think Lehi of sale? charges underloading OpEx. and like

the that the results fiscal QX bridge as us to fiscal Lehi between of sort guidance? it for and QX you relates can So

Dave Zinsner


a of the at couple for So quarter bit last October. end the sales. fiscal quarters. because million the was running we've of than related accelerated closed we in That's somewhat about we to wafer revenue It of had been higher actually $XXX first little

in the quarter. does away second that actually So go

the to On the I end but We corporate at was it quarter fiscal a actually normally, close held-for-sale pretty year. the -- status, we the that's think, front, average. assets to margin second lower, of of the last moved

depreciation expense there. And so the that discontinued

relatively factor you of so, that And we -- saw levels in. margins once similar generally kind

of lot -- third second it fourth margins fourth the -- a won't call removed quarter fiscal meaningful the to and the somewhat underloading have impact gross it So in that let's such of the fiscal over fiscal or quarter, quarter. course the a first got

Timothy Arcuri

topic then, long-term of And all procuring engage it. customers. concerned your to you at when sort you, talk very where you there's customers, mean back with my they're this is do question And of reasonable about Obviously, change your very, heading? Sanjay, just them. I you how quite price. see DRAM a Got on agreements of sort the a with tenor the for been in of

scenario prepay envision where So bits? them for you for to a you maybe can do you example, get

Sanjay Mehrotra

mean, and with customers discussions their I to our highlighted, requirements lead more our LTAs and the of we their in map are how with how their supply. these As portfolio, requirements. road understanding map product road course, fits in our And around and gets of portfolio of our closer defined terms discussion

LTAs these terms from in value these relationships us on of the continuing now as I XX% taking I LTAs. discussions, is evolve course But customers with our yes, well. mentioned that the earlier, So mean, last as that have XX% over they're relationship few continued to based to years, also of evolve to

our engaging teams in partners course, team of continue will in we here. would done just the of that of confidence we And the sales by the drive our to as unit LTA and, these these that earlier, able like highlight supply terms lot in to discussions being work mentioned with in look good I greater product strengthen other course, requirements supported these customers The are just with visibility of future us. teams, has So to position their and a to opportunities, for I gaining these gives and technology, LTAs in and as LTAs through execution well. to business this that portfolio strong chain customers good


comes Mehdi question with next from SFG. Our Hosseini

You may proceed question. with your

Mehdi Hosseini

have question follow-up Yes. as you Sanjay, you. throughout to the for my see trending David. server DDRX have And DRAM thoughts any I first is I if was of overall percentage for a you a of how wondering mix as XXXX?

Sanjay Mehrotra

to the as that will space the use as XXXX, in respect that new So to marketplace, DDRX DDRX the are with server rolled adoption processors drive of well. into gets out able

begun space, product. PC there Actually, DDRX and the the DDRX in in DDRX noted, industry. has the is DDRX currently adoption in demand. already started, have we we for limited supply shape high to As is

in that 'XX. year XX% that approximately approximately particularly the of ramping expect I'm there, at processors, space, server, the with So calendar of exiting mix processors And in mix with will up calendar -- in in with sorry, when that up approximately XX% we new be I of DDR XX% the industry. become later year PC. available I 'XX look We compute DRAM at okay? PC DDRX ramping will see as be expect well as as DDRX first the we for

Mehdi Hosseini

it. Got

Sanjay Mehrotra

a stronger second I server processors well And half of into half PC, up versus those new ramp year again, ramp throughout in 'XX. our in the so, happening will the mentioned, production DDRX first in customers, because, second with it's ramp half that calendar the in And a as space. as drive the

Mehdi Hosseini

understand DRAM is what based ASP, reported you in environment. it. underlying at guide, the And look when for -- for a asking me a your is you And for to but I'm guide Got supply-demand decline and fair on I'm that David, trying to observation? just NAND and better And prices. revenue guide not seems I moderate blended assumption the

Dave Zinsner

talking, Mehdi? you're quarter, fiscal second For

Mehdi Hosseini


Dave Zinsner


good for both would ramp to we continue a basis. us to year we fiscal structure and for drive to We're obviously, can't going forward-looking reiterate Sanjay's the forward. going and cost comment just So on we NAND, and comments pricing which I that dynamic X-alpha, a on supply/demand continue mix. DRAM see a XXX-layer gives healthy the

are guidance. those assumptions of our margin into All built

course, Of assumption to play can a low on out. there's and that high based things margin how a


Morgan Our Stanley. Moore next question comes Joe from with

You may question. your proceed with

Joe Moore

higher of from if quarters here? wonder you But be And about now. your sort talk with level they you of could how I comfortable expect ago. customer in that are basis do talked to sustained Clearly, there the a about you're philosophy levels inventory you role feeling? of case of couple just on a a inventory

Sanjay Mehrotra

clearly from customers. to So vary is inventory strategy customers

are in of strategically at what given of inventory. supply introduced terms definitely, some looking level higher shortages, pandemic And chain

Some considerations. may geopolitical also be doing it for

but chain non-memory our with has planning raw customer inventory. inventory And from may some the back strategy vary of customers customers in be shape. is a really So inventory operating see our don't just in pandemic-related customer. levels, industry-wide more our are components given for environment, in to an itself look us, greater levels pockets I carrying as terms current similar -- decent just environment inventory the a customers. higher inventory yet current we levels pre-pandemic of there Micron respect front well manufacturing, geopolitical overall, customers at extra own And sure inventory materials approach we supply operations that have assuredness said, managing some are the And does on overall, their customer of of front holding to also, with similarly, And on our to as supply going is as level, around with to while inventory. ability in well just lot uncertainty to the make our -- of somewhat as


Our comes Sachs. Toshiya from Hari Goldman next question with

with You your question. may proceed

Toshiya Hari

at space I you maintained on is or guess actually your couple of guess it so in ability Are side. Sanjay, I a And times. suppliers to any CapEx just -- of I about from a decommits wanted all? not, impact bit seeing supply Taiwan supply guidance, that. perhaps clarify one constraints your quarter, first terms question, equipment you've talked you perspective your costs? year my to two the were of from or be of in sort from earthquake full the in there then there whether any reduce my in my the the but part was delays

Sanjay Mehrotra

timing of team team overall those of in, in equipment. that. suppliers driving have with are our supply these I planning. course, with our terms our own factored lead and for securing closely drive And of a we chain seen planning but in And of mentioned, of we I collaboration long-term our slots yes, also to times, works really equipment and terms lengthening terms procurement of more And mean, we have, suppliers lot in So demand been as equipment. -- seeing continue

our we those I with have suppliers. our was provided and the own equipment any you repeat built based our that would and not Can expectations. that what forgot expectations your versus And that? of with seen suppliers again, But question? of the please have us the of collaboration on question, second and lot push say are good with visibility of no, a So, delivery we I now, part second work part the between your outs planning

Toshiya Hari

to Earthquake downs? or the impact any in in cost Taiwan, bid quarter shipments

Sanjay Mehrotra

certainly output did the was reduced. of earthquake earthquake, to end some time our our meaningfully Taiwan, the of the bid of So By impact production. the our overall in at reduce quarter,

Toshiya Hari

ask industrial. And about business it. to I your follow-up, a automotive and as then wanted in Got

that in about those markets? automotive or for and whatever businesses XX% two out industrial industrial, the the basis? rate fairly you're more both than auto how but curious rate cross-cycle of the both about about markets growth on a two revenue. the end you In for two overall normal combining your are growth environment, is, quarter, end threw talked sustainable couple You You in a how thinking thinking of and numbers a

Sanjay Mehrotra

spoke I the automotive over this certainly combined, And space. auto across drivers will XX%. we demand leader that in industrial and is automotive be all market. high-growth drivers in the an industrial us and to The Micron clearly for auto the cycle. said

itself, of And If this And the share the automotive experience all share year, industrial we memory based market, our with segment to storage digits. equipment, the at for the you our is industrial market and this provide demand we in automation in IoT, mid-single industrial with markets. look our tremendous would in expect continue of on somewhere factories. for grow quality to high and course, demand with XG also in increasing these content is market us growing drones enabling with surveillance, leadership,

All of this as is tending greater demand to well. drive

growth these markets. both of So we solid expect in

the look that's above well course three course -- in overall, XX% at the over over the NAND kit, automotive the approximately next of years, you We expect of market, years. XX% the CAGR power as next three DRAM content CAGR if automotive in

over So, we course again, increase of sustainable has in the next terms are to well years. and market in continue our in markets, several percentage this this really we And revenue expect positioned of growth. of to these legs


Our Shannon Research. next from of Cross Cross question comes

You may question. proceed with your

Shannon Cross

also And I'm as guidance current first impact changes. in have follow-up. least that seen of what's provide approach cover the that the I about any regard the of has realize at a it? have And with how variants. I one to in you've then the had curious variant? follow-up. and then you I thinking But company, it's some to I'm a here going early on wondering if from given light I

Sanjay Mehrotra

So of well protocols as with respect result whether members, on various respect been focus operations supply, it as despite the to that, actions all generally to have people Micron the successful first been in And has we throughout on-site continuing our pandemic. of our with with run we our our have all overall pandemic terms team in quite in course, our of industry-wide on good strict challenges to taking the we and protect the our vaccination. members as ability with respect our operations been focus all, as Micron, our the of safety of to And is physical of to on throughout well will business, proactive to support respect our continue managing masking, team run continuing -- to a as to course, operations. distancing of our customers. stringent operations With safety

of We well. will out to even like and you regard course, not that continue we for strong some with result be may time let in whereas well. run had and for our of as the guard demand of to to Delta, course, as down continued the as trends parts higher of periods certain of business, periods products saw, have a developments would parts our other monitor And demand continued time, of operations as all to of well. our for point saw I demand this lower all the And course, certain here. in COVID

monitor So on business. of trend. to some of course, of to extent environment, the impact might any the macroeconomic course, continue we has our will And that that impact Omicron the

extremely we However, you been have adaptive. have seen that

been we have and continue will agile, to We extremely do so.

Shannon Cross

terms higher can expect, And obviously, road what wondering XXXX. And and of a elaborate comment OpEx, the be if mentioned map. is Okay. I'm curious, road benefit? accelerating a little you we that I'm on would of just map more then can in that in bit sort you XXXX fiscal

Dave Zinsner

-- fully benefit it's out a the Obviously, SSD products have the XXXX, lot in a opportunity years. from through all you're do the of benefit. to there's extent, coming of We'll the we that front in to of perspective. more continuation which have It's progression a all capture of in investments we seeing products of already prior NVMe large our of the lot Well, the were markets. good a that an made to

process to There's EUV continued there's in set technologies, there. mentioned. next investment obviously the X-gamma the investment which So will include be Sanjay for going of that

different will of leadership and side to the whole terms lots be the technology leadership market think a process necessary plus address in continued products pace on we our cost So of that to investment position. position keep


Thank call. concludes Q&A gentlemen, participating. our Ladies Thank you. And you this conference and concludes for today's that session.

now You disconnect. may