Micron Technology (MU) 25 Sep 242024 Q4 Earnings call transcript

Thank you for standing by, and welcome to Micron's Post-Earnings Analyst Call. [Operator Instructions] As a reminder, today's program is being recorded. And now I'd like to introduce your host for today's program, Satya Kumar, Investor Relations. Please go ahead, sir.

Yes. Jonathan. Thanks, and Call. Technology's you, XXXX Fourth to Analyst Post-Earnings welcome thank Fiscal Micron Quarter And

call me Global the Officer; Murphy, On with CFO. Manish Chief Sadana, our Bhatia, Business Micron's EVP of Operations; Mark today and are Sumit

to today may We other As regarding today. including forward-looking statements matters. trends drivers, These market we're made results you cause expected statements Form from of materially differ may subject our filed market statements -- SEC, to and supply, that forward-looking risks documents the include our XX-Q XX-Q a affect have discussion risks and results. our refer and matters we that reminder, for Form results to and recent the a actual XX-K and that and discussing uncertainties demand with guidance are upcoming most and

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

forward-looking to the We conform call are open duty Q&A. to no up now these under of to update statements results. can statements to actual We the any

of question line from the from Ackerman And our first BNP. comes Karl

Two I questions, if may.

a Or revenue in you've a demand from could as servers? area question, high-capacity that to growing DRAM your going AI through is it DIMMs, traditional become and demand of 'XX. assumptions that for XXX-gigabyte, refresh? growth product curious your address fiscal as only you are in will used discuss indicated as term. perspective, a And server First, that balanced smartphone indicated such cycle servers is I near remains continue you mixed PC was growth you if unit server across

Yes.

grow improve departments have of that continue traditional the deployment server and IT mix, that do will the been the because terms we to continues. -- across of server the applications In large -- the the that running, terms of that software and Karl, software tone terms demand will of in in expect companies

the application software in the see can industry. growth You

So has couple be a compressed only general much, the can last years. purpose of so quite compressed over been server growth bit

So growth we AI servers this be change this over And it year. next last provided there of is course, we year, in growth be expected that will purpose into the have expectation will general year. couple to We modest continue see unit do strong the and servers year, then, strong any of in expect some don't next that quarters. of in kind

AI arena. improvement competitive continues. And For lot in we of our of have XXXX, in definitely, server the in that a momentum course, positioning

spoken about We have that. extensively

growth servers. HBM AI in have We

These in But Of DIMMs have get their training you expensive course, expect get in as AI continue. that tend in are high-cap more the that servers basis AI DIMM. because they well mentioned. predominantly, more is we than traditional they well used as Consequently, servers, per as servers. on used XXX-gigabyte both to use to DIMMs servers side inferencing as both on XX-gigabyte a bit AI and do we

inventory rose as inventory just clarify improve half hoping Obviously, dollar million PC you the and around the remains the comments that. of X $XXX I appreciate supply. could peak Are year? I smartphone in begins value I -- on that sneak discipline you fiscal first you to more. as demand of maintain could your suggesting would QX inventory. If in

clearly, forecasts, what builds we're Mark. happens and We with give modulating building. our dollar don't it's Karl, typically because estimates

WIP materials and and have We raw forth. so

our the second fiscal through is our half on a half and did that be so you focus DIO tend -- elevated that going of number. 'XX is DIO would basis, second in we we what volumes. more weighted fiscal believe, will improving see, on and providing dollar into 'XX. think to a as we Our inventory year on days particularly And We year

improvement of is getting same DIO, year, basis, of the of do the won't on back Now there year. see in half a larger, the the business change. we dollar But the so degree through on be particularly course, the

from line question of Sur the next from JPMorgan. Harlan our comes And

strong operational the overall execution. on Congrats

On in supply flat November slightly, view improvements DRAM is up that outlook much of better HBMXE. your shipment sequentially the prior on know AI better-than-expected good Because right? how up customers versus yield HBM, in of to are we constrained

shipment away, better So to HBM quarter due consumed be So right versus the supply better any and part prior your right? unlock unlock better would supply bit yield of outlook is expectations? resulting this

QX some of where then on we above achieve were yield I'll And Maybe hundred to are Sumit, guidance and yields QX our said the to goal rest fiscal QX is of dollars' several are of feel terms revenue. drivers HBM. of answer we ramp DRAM. HBM products. ramp able can other in were margins We these about for continuing our our gross shipping were at the with We be our F worth you the the on Harlan for and answer million good DRAM that the were both strong. F of and -- quarters, on just But that

for like executed and 'XX. on able us in well feel this being we've to we to support multibillion-dollar ramp, forward this look business fiscal we continue So to opportunity year

our demand are Sumit the strengthened earlier other conferences where HBM. talk drivers feel the comments And public we with let good about we some at So last since this of some of year. I'll about

Thanks, Yes. Manish.

really demand, to had from is definitely, we terms driving shipments. the cloud the we as well to from origin. is the in enterprise center. strong trajectory the upside strength server Demand coming of both traditional as F data what the and demand DRAM communicated servers center on AI QX on data prior continue in see So And

the XX right, so lagging-edge past months, for capacity? the market more less CapEx, is to been converting On guys perfect. well. to expect initiatives you your Okay, DDRX this team maybe are Micron on And bit that solutions, just top just mean, follow-up. focused DRAM the really supply capacity the can to shipments as leading-edge of in like level DRAM. do has DDRX more team focused, you I a has value-added all assume There's what us, set has where DDR part been optimization be that, this then And right? a mix that year? around excess today? output sort your translated of lagging-edge been for much So I of capacity of percentage of But over calendar exiting noise on

Yes.

bit towards the we of So of that and are in our looking now in low-power for pioneer of significant I ahead we DRAM year are provide over to the last to more for LPX opportunity the data or a a as we fall center, X, us LPX some shipments our to very year important DRAM us. towards again industry. just percent going in product the a shipping data the percent and into mix leadership will next It's over become shifting more continue are provide is bits DDRX is that is category the DDRX center DDRX use product can had so Micron center. We that data color very a that It's mentioned itself in but fall shifting and don't time. because shipments overall of

mentioned there on overall trade and constrains our high ratio that, multiple and the then, lagging of the the the wafers LPX mix of getting mix. towards And about drive when you have overall HBM every more and the of think then further over as mix So increasing technology DDRX about of HBM it you shipments number. And well, mix, of of that to when part we we course, the to also reduces mix going quarter the mix fairly X:X DDRX can of we and times are imagine overall bit as the levels wafer other products. that

And on transitions doing, and we've just to talked your question what been we've the about.

is mentioned DDRX in the optimized for X-beta that on HBM our well. I've I past node has also LPX, it as and think actually

'XX. in been as to we mix to fiscal even that continuing and X-beta here prepared in we're move So as remarks our we increase converting of the forward we've said X-beta

HBM that supportive made kind terms our see supply of can comments you markets. LPX, capability in the that, serve moving growing those of of DDRX, are to So in high-value those applications, is Sumit --

Harlan, would that just maybe we've most I it. is defined to add, -- of leading-edge our inventory values, as And Yes.

that through that, the need mentioned as capacity. So transition bridge year, Manish we we to to increasing X-beta that help that with inventory

from And next Rakers our question comes the of Wells line Aaron Fargo. from

the Just X:X. lot industry, building ratio, We've on talked Harlan. the the prior question about trade about a from the

and move it to guys I'm down curious ratio. about And I'm XX-high evolved, towards see that that to it trade HBMX to the go improve? there how because as of moving you're how evolution Or think that's see on as confidence you -- how stack beyond? Do actually you talked that? you have even think ever the is does HBMX the propensity follow-up as you XE, and about thought As you and -- we a quick well. yields maybe a increase curious I how about

Aaron. Sure,

-- standard how talked larger made and and to the of defines node that the of the throughout process. on the X:X able also, HBMXE that And and a in -- have be primarily die order process will particularly than performance we based high-bandwidth capability in the about capability up have die So in ratio, to is we assembly provide HBM products size same size is the have trade factors -- HBM. that HBM growth. the and yields

maybe will we well. also X-high. that HBMX, can trade the XX-high that increasing you higher have towards ratio slightly said as move And trade So that see a assume we've we as than ratio

DDR, really the of at of the haven't differentiated that as and to size gap high-bandwidth the commented time and the on LP We and biggest the imagine die what's of can versus standard the HBM ratio you those the products. then products DDR the is LP capability widens, because between as the standard performance terms dedicated in performance more standard but beyond die that's the driver that, that's and between in HBM of trade gap more kind providing

spend given first I just around look Mark, relative helpful. back CapEx things far as as quarter. how more fiscal CapEx we as to weighted about Any cadence year? Yes, about I'm to as for past seen And you last what the that's in thinking the some make half CapEx and very just think is relative then with, trajectory know years kind through quick framework few of the CapEx we've a there guidance of the curious, trajectory, years? the fiscal the you're follow-up. that the you've forward,

No, a quarter. of given We've CapEx given that gave bit for indicated this fiscal year $X.X estimate year meaningfully. we've that the expect up 'XX. we would quite on first percent We We Aaron, be time, for at this of billion mid-XXs revenue. full

down year. the through as can provide to overwhelming a back nature of bit that share as be down more more support 'XX. down or to end and in down R&D. WFE we in as disciplined to say. 'XX overall then to provide from we'll bit I We remain mean, up 'XX a But WFE the in is again construction, majority 'XX CapEx. manage So WFE was supply We 'XX. the HBM again growth, and well we'll on 'XX color 'XX in expect on in facility increase just both stable then do to 'XX bit, CapEx maintain

next from question Chris Caso line Research. of our from And the comes Wolfe

market perhaps the question lower you're that impact becomes -- few, causing smaller is percentage a is on some in impact your revenue now? a having becoming for capacity next China naturally, meaningful the any disruption does that you've smaller if seeing from now? a end And seen you that there added. now? And it is you any impact the smaller we've a first become any if about some potential said of of that But of impact part then is And that business. are it's that's of and what The year,

and use focused China in It's customers supply that product lower it so so lower-end mobile with primarily on supply some Chris, LPX and DDRX, the type limited of the Yes, yes, China-headquartered them, product there the are to China-oriented, supply, categories to side consumer associated China using generally attempting on in some market. of or terms on in who DRAM of that has been of SSD NAND products the and side, performance categories. the have especially

had the higher share portfolio Our basis in in DRAM that, the and the is on of see been flat are have cycle product the all high-profit of of and we made the that what for focus a portions really can in of have history share within action in We're the that now of significant that the global on pools the because gaining best midst to progress strategy. And we big we NAND, industry. has And of focus have you on profit product industry. Micron.

share HBM share LPX data pioneering have in levels. SSDs We center robust in gains the in leaders data DIMMs, share happening, at high-cap center, really record

the see our smaller how exposed to those trends are of you can really revenue of portion in business So time. the kinds China percent as a over becoming of that's

mainly I your bit you've I -- the kind of bit the the view on into said you no some past increase to of CapEx 'XX wrapping as migrate transitions. And in the as Right. it follow-up, growth support that go as in there's a these out is on just that been guess, -- is you small. actually detail, you've bit I technology guess a Is That's you past, HBM? in you've reducing actually you're growth of is more But nodes lot next or capacity of what nodes, helpful. guess migrate in oriented the that even really comments CapEx of the advanced cases in basically capacity that. as meaningful to some obviously. and towards amount up This is that's provided

for were question, So Chris, conversions, calls more we the efficient towards some and equipment we trying about that a 'XX, from this last reduce approach had and the LPX-optimized was structurally. talked to node DX way is taking nodes fiscal X-beta, for that which about, we the in previous where capital-efficient example, capacity technology nodes prior continuing older to in of and wafer few an convert throughout utilize

bit of think more that's industry had in be growing XXXX. But demand we we would it throughout not in long going there since new peak something I It's industry, have if as some growth. still wafer it same down, but that we technology that referring as right? and the believe levels capacity, we provides in wafer us, growth of been. And bit both growth So DRAM term that's we're sort had and growth the to. Net, into line reductions sort to And wafers as as as taking been capability and headwind the get not ratio, account of the take much because is get still share is HBM not is do -- capacity the capability see, still bit structural just technology. that's to still wafer NAND with capacity the this it's have provided new bit So difficult the a things you're of trade what the is towards given we bit for get do to like grows, of growth more capacity amount because put comes the wafer and which by it there capability HBM lower. makes just mix bit it bit have -- much would maintained the sort the moving

Piper next from of the our from comes Harsh line Kumar Sandler. question And

want long a I It all, you a guys for to turn in the kind with the or kind had do it's maybe whether are get with to understand about of GPUs? like this contracts a have for seems you job to doing And Wanted maybe beyond. make is, larger you even or we understand design you it talk engagements a Maybe Sumit contract, question I generation your get to for contracts? how good your that wanted typical customer, Or could Wanted your either question of the -- supply a specific, congratulations. or a handful design even dynamics either investors. just lot visibility follow-up. cycle. our of then from the with if the of visibility. particular What Mark. the First don't that

Yes.

or we of next the do we couple have terms obviously, different on front, are agreements -- types. in do So with the we when calendar this typically. We LTAs that they focused of year a on kind agreements, of long-term customers

based breakdown And figure of in to bits December quarter. Typically, and to to tend with of to out our case, customers of products the translate bits NAND have an of in DRAM product we so that demand this in node understanding they we visibility it are what of going manufactured in type, that advance. January are kind to we And can on kind XXXX, to be get these goes we and work so by what our operation's manufacturing the signal.

the on of on in alignment design that HBM reliability, also functionality. When into we and that road specs, different thing they the ASIC map working comes availability their is deep engagements capability features industry HBM, monthly R&D, fiscal the a the designing, for the 'XX pricing before the RAS to over talk accelerators on map, are that outlook and HBM be the do site requires tend comes kind road alignment lead it's we is and very LPDRAM year. that's on for way, When it gets have the the to we as agreements calendar about calendar basis time we these on and price have and -- to all these Now already mainly get tend that the serviceability center terms to they're that. are depending or we it whether multiyear And different, agreements with when GPUs our on obviously requires pricing -- that visibility or HBM, for through customers and longer on, volume to going customer. And LP, it and that data quarterly have go so negotiated and for agreements negotiated on comes need, concluded the the is of they're what on 'XX. different by

AI that the that we engagements And make front. even we'll happening then be a HBMXE our the in customer as where certain to we it that is R&D on And feel to have confidence going leadership us the what XE, XE and talk well. may about customization gives than product to of then arrangement standard in different to it in we and So when when these have. statements embed what industry data is that gets growth business becomes HBMX it of a then in this we business part with it HBM going multiyear is IP model is opportunities are comes different the becomes as the want product, them like the create all of kinds center, of of standard regular terms And well. say growth over time that terms as a to the ultimately, very to we that very different transform than product. And of

a sort those window of happen. into that's So engagements how

super useful. is This

X follow-up. another So is a

you're we that get suddenly Another third customer the this some up X clients and share that the fear and that in some saying, it's wake from hear get get competitor get I not from game. customer, line, have investors in. we would what is this that easy the third suspect will there's that our of just into to

share would your out. own contracted have You

get or in you're assumption? this probably am to So likely mistaken I not surprised,

expectation mean, ultimately, all do of will have that HBM. to we X I be an supply DRAM able the large suppliers

the HBM the is specs. best goal best the performance, with functionality on features and to best and have Our planet the

a power the center. processor, XX-high with savings center lower huge happens kind next of power have Micron I remarkable the power to part consumption a think of it is power the that DRAM saving is an directly data needs the nearest of in product data helps product And the to from can that competitor. XX% X-high what than really from because

also we Micron's -- definitely about able of for limited market really can I can the all be high and to for which product advantage for our that end-to-end demand our supply our a the So have for by confident this seen we brought how not we'll And It's to at ramp how customers. just the have very be have and consequently, and about lot actually ramp. we for because mean, pace of product. 'XX is we it's can rate industry-leading demand products feel share be that leveraged the share. it

we as there look that, is past and are Now competition. not obviously, of always afraid you competition

call plan with what in in we and of for And ensure model the when demand, industry are for And is in discussed we supply capturing demand is that certain be a demand. that as our so is today, it's portion portion industry that prior model bring look for portion non-HBM up in And online and supply the non-HBM? HBM, of to we volume sync to the the the well at the can the what have we the demand at is pace, fast only so much being growth as overall HBM and the so when so compressed industry. especially capital-intensive HBM, whole growth rate of by bit brought

And outlook supply-demand how able place will feel manage year to changes so a be the to XXXX based aggregate is to because well we be evolve. them but for of that in on level the do ought calendar mix happen, our healthy likely and we'll fiscal

line next our question of from comes from Mehdi And the Hosseini Susquehanna.

the couple you expanding I Mehdi of HBM OpEx and a your also actually and And questions. operating follow-up All questions of you're been for mix what out Mark, fact other XX% a confidence have asked. higher accounting couple do capacity, throughout good level just your follow-ups. in of given that have -- for 'XX? your I margin Hosseini. increase is HBM a sold have the It's of

guiding a at or on we're the the market Mehdi, color and time. quarter year Yes, We on did X environment. industry provide the

in and second Keep you be with node view see on including from on some the to our supply-demand mind a transition we of help through and comment. said year, output a relates of additional inventories weighted, would things, drawdown our environment maybe X the year we and healthy tends that the which is help to our to in it for number half important that. Maybe financial volumes our with in and that today year. We year to second the the timing balance quarter, profitability expect it improved significant do We've profitability. and constructive record revenue a said As a be something keep weaker which be to with second would half mind. high-capacity a through quarter, in for year executing fiscal maps 'XX and quarter, a so quarter weighted, broadening volumes, what mix us, industry, seasonally demand road product a healthy year first the really calendar weaker tends very to of other quarter environment, fiscal second and overall, fiscal SSD for our year data DIMMs, well to the data supply-demand increasing broader a be the of LP, on markets. increasing center then has from then the strong and AI center traditional HBM, But been

So for you bar, you at bar fiscal year a want of summarizing set be feel to least good to and that fair just pretty feel accountable Is you don't everything but said? good? 'XX? You a that way pretty

for risks and maintaining performance, the doing the the We've indications of all about times well we discipline given stable about share. bit a think some about our business. cost managing of capital And the job in our our positive at cost good we're and executing and structure, spend vigilant year, we're

a associated then Everyone And the HBM me for back-end competitors? Manish. TSV. of how front-end on compares you HBM yield understand thing your But And facility. yield it. and same Got focused to with back-end help question the for is can

how Micron it and it's and would end the great. of kind up could be executed, break end is evaluate better that to this us how could peers, you compared to if so So the back help if just well between front

made we years investments and and that, this manufacturing what Well, I won't made past. we And interface on on will manufacturing, we now. those have between technology our have as new smart yield call before, ramps, into at intelligence manufacturing comments on competitors, we the artificial comment development you for some specifically, focus significant and in tell this have many I and both Mehdi, nodes we given we that and color so ramp in that but

continue we faster ramps prior yield mature more Our predictable node-over-node than achieve forward. move as to higher levels and and be nodes

So the capabilities, fact, as equipment are and feel as can talk that fab to rest of is this to you yield efficiency performance many and, latest I we tell those of in we manufacturing vendors Micron all to the that techniques we able is the all smart assured that leading of well are we very, utilizing performance. techniques very And well in us -- think in these positioned. be improve quality utilization structural

And good I we I HBM? the Harlan to who about going was being I just good are. We on able think about it HBM was So to -- -- where yields where already I reiterate, previously I support think good feel asked we have ahead. feel opportunity the that. And about continue on they call, about they're it feel and on the

guess for color I front and I was qualitative end, not back comparing any But kind of specifically asking yield. the overall

Yes.

think end, I'll with that able be the to and both I lines have our as to are of from that comes specifically quality have not lower-cost our in our so we're think that can I outgoing line well. I capability. A as I our feel and comment more while of product And right? like yields product we about say, able design customized products. good our testing have solutions -- we as test many tuned very, hardware design improving well us better to to front sort good very I'm very own across back-end yield the where hardware, we tester such tester I period improve -- also end fidelity but of assembly kind and board, are with specifically allows we tester equipment lot test we're our equipment efficiently across test that from of asking In our ways, yields, development but feel back you're equipment solutions that end. is capability, and we about capability back manufacturing the And have good going about to we the think they for both which

yields, back So as front-end very on as well and both in I test. end, in well assembly like we as in as strong very, back-end both feel have capabilities yields

our from question Brian the Chin next comes And of line from Stifel.

favor relative on kind quarter that some the seasonality, bit of stated February Mark, in Congratulations what maybe the to quarter of of you bit, the in November from a around of you terms is to And standpoint? looks in works like some consumer. Maybe kind our that then in shipment Maybe something a ago. portfolio this when mix, define We've just company's in -- relative that which that in can up was similar related the would sideways that of quarter be modeling. be just not discussed November execution. This and the to February quarter revenue why and to that why would effect driving that inventories sequential February results growth, modeled it moment deconstruct for the mix November? reasons seasonality built had -- were little about some not think the the of a kind

Yes.

our high-performance And will fiscal through is these the heavier continued there start volumes of can volumes broadening of we're other year. of this maybe broadening as earlier, I year, out. learning And growth through the now, add quarter, contours Brian, There are that on then We're now say, demand see the being we and of about understand view markets increase me the as seeing strong that the through year, some the to first this. weighted because right second you demand just in the that the center we that to server and then and then second be year, strong. And half server mix half some be fiscal But it's out. see I and quarter. year, traditional mentioned markets favorable, guide our here year. data see and the continuing favorable AI-related Let on strong. Sumit to going interest not

and continue also grow. we've markers As but LP data given enough we on center that high-capacity which ramp HBM, SSD profile to DIMMs,

add? Sumit, So I anything think, to

Yes.

color. place OEMs and, Mark to relevant to their But prepared that. quarter provided said, mentioned F guidance frame. Mark QX the as time from products inventory our not the the quarter, QX of is I'll encapsulates providing spring lesser about you a will any it. but The And Definitely, our there terms that quarter point the so just XXXX, benefit OEMs working in center also, I the we how second only the mention our part where important will like C we're a of healthier data to a thing second which Mark PC smartphone of of is think F it extent, get think get remarks again throughout the by in QX. seasonality this year, about higher-margin continue ramp is is also, of said,

the should So year improvements of top fiscal which half half demand drivers, data in those broadening calendar mind, center demand robust calendar mix fiscal things some the AI on 'XX full 'XX, are and of AI of what be year strong 'XX of PC, to smartphone, leads of second to second us continuing. keep that helping is

need super your actually does product on be quick helpful. That's XE maybe be a track with But great. And shipment you've qualified Okay, and standpoint, your HBM that XX-high timing just to production roughly when in very communicated? to follow-up. a from order schedule by

Yes.

second the XXXX, of to the to XX-high, half go provide obviously, more -- order will on, so this to ramp. And large So of readiness the mix that are have X-high every going of products. XX-high customers. And support 'XX, our than we and samples samples working the some to provided in be are in And our consumption you HBM its calendar mix very that going product XX-high. but selling closely we provided you'll to because in our of we yield time. of be volume the we other to of we early more what lower that, of leadership for product ramp XX-high complex product to products and own obviously And have of to in customers We we process. plans course, keep of call leverage will been 'XX. And have their then our figure we versus production-ready XX-high and readiness based mentioned of with go X-high XX-high a is expectations customers ahead very calendar throughout XX-high power our with through XX-high are starting that the quarter, expectation industry the ecosystem XX% continues increasing, are to through importantly, X-high a volume, switching have part of qualifications their the to out ship in

make currently transitions of really half the and they time lines should in customers constitute our second expecting. feel majority our 'XX, our the on the about it assuming are good calendar sales we of the XX-high, So that

the where to are calendar getting with customers for 'XX. feedback be we early Sumit good are able and We've with feel sampling prepare about XX-high mentioned mentioned. in Sumit to started who that learning year We ramp that will that start

Thank the your for ladies as gentlemen, participation. does program. and as conclude question-and-answer this And session you, well today's

Good disconnect. now You may day.