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Micron Technology, Inc. is a leader in innovative memory and storage solutions, offering a portfolio of high-performance DRAM, NAND, and NOR memory and storage products through its Micron® and Crucial® brands. The company operates through four main business units, focusing on different market segments, including data centers, mobile devices, automotive, and consumer markets . Micron emphasizes technology leadership and operational excellence to maintain its competitive edge in the semiconductor memory and storage markets .
- Compute and Networking Business Unit (CNBU) - Develops memory products for data centers, PCs, graphics, and networking markets.
- Mobile Business Unit (MBU) - Provides memory solutions for the smartphone and mobile-device markets.
- Embedded Business Unit (EBU) - Targets the automotive, industrial, and consumer embedded markets with specialized memory products.
- Storage Business Unit (SBU) - Offers SSDs and storage solutions for data centers, PCs, and consumer markets.
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With your OpEx increasing by 15% and a higher mix of HBM in your capacity, what is your confidence level in operating margin expansion throughout fiscal '25, and how are you managing the risks associated with higher costs?
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As you transition to 12-high HBM stacks and anticipate a higher trade ratio, how do you plan to address the potential increase in production costs and maintain competitiveness in the market?
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Given the increased supply from China in lower-end DRAM and NAND products, how does this impact your strategy to focus on higher-profit segments, and what measures are you taking to mitigate any potential disruptions?
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Can you provide more transparency on the percentage of your DRAM bit shipments that are still DDR4, and how quickly do you expect to reduce your exposure to lagging-edge products amid concerns about excess supply?
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With your reliance on yield improvements for the aggressive ramp of HBM products, what contingencies are in place if yields do not improve as expected, and how might this affect your ability to meet growing AI customer demand?
Competitors mentioned in the company's latest 10K filing.
- Kioxia Holdings Corporation; intense competition in the semiconductor memory and storage markets
- Samsung Electronics Co., Ltd.; intense competition in the semiconductor memory and storage markets
- SK hynix Inc.; intense competition in the semiconductor memory and storage markets
- Western Digital Corporation; intense competition in the semiconductor memory and storage markets
- Yangtze Memory Technologies Co., Ltd. (YMTC); threat of increasing competition due to significant investment by the Chinese government
- ChangXin Memory Technologies, Inc. (CXMT); threat of increasing competition due to significant investment by the Chinese government
Recent developments and announcements about MU.
Financial Reporting
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Revenue and Profit Performance: The company is experiencing challenges in the NAND market, which is expected to account for most of the sequential revenue decline. However, the data center segment remains strong, with continued growth expected in data center SSDs and HBM products .
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Management’s Forward Guidance: Micron anticipates a robust trajectory in data center revenue through fiscal and calendar 2025, despite some near-term moderation in data center SSDs. The company expects sequential increases in DRAM and NAND volumes starting in the third fiscal quarter .
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Market Conditions and Strategic Initiatives: The company is taking decisive actions to align supply growth with demand, particularly in the NAND segment. There is a focus on ramping up HBM production, with expectations to reach a market share equivalent to their DRAM supply share by the second half of calendar 2025 .
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Analyst Questions and Management Responses: Analysts inquired about the impact of NAND on revenue decline, DRAM pricing, and inventory levels. Management highlighted the challenges in the NAND market and the strategic focus on high-margin products like HBM and data center SSDs. They also discussed the expected improvement in inventory levels by spring 2025 .
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Revenue and Profit Performance: Micron reported a record fiscal Q1 revenue of approximately $8.7 billion, marking a 12% sequential increase and an 84% year-over-year increase. The DRAM segment contributed $6.4 billion, representing 73% of total revenue, with a significant year-over-year increase of 87% .
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Management’s Forward Guidance: The company expects continued growth in the data center segment, driven by AI demand, and anticipates a strong second half of fiscal 2025. However, it also noted challenges in the NAND market, with expectations of improvement in the second half of the fiscal year .
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Market Conditions and Strategic Initiatives: Micron is focusing on high-growth areas such as AI and data centers, with plans to expand its manufacturing footprint in Singapore and investments in advanced packaging facilities. The company is also managing its supply chain to align with market demand, particularly in the NAND segment .
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Analyst Questions and Management Responses: Analysts inquired about the impact of NAND underloadings and the expected growth in HBM (High Bandwidth Memory) revenues. Management highlighted the challenges in the NAND market and the strategic focus on HBM, which is expected to drive significant revenue growth in the coming years .
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Financial Metrics: The company reported a gross margin of 39.5%, operating income of $2.4 billion, and an adjusted EBITDA of $4.4 billion. Non-GAAP diluted earnings per share were $1.79, up from $1.18 in the prior quarter .
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Capital Expenditures and Cash Flow: Micron's capital expenditures for fiscal Q1 were $3.1 billion, resulting in a free cash flow of $112 million. The company ended the quarter with $8.7 billion in cash and investments .
Earnings Call
Micron Technology recently held its Fiscal First Quarter 2025 Post-Earnings Analyst Call, where several key points were discussed regarding the company's performance and outlook.
Overall, Micron is navigating a challenging market environment with strategic initiatives focused on high-growth areas like data center and HBM, while managing headwinds in the NAND market.
Earnings Call
Micron Technology has released its fiscal Q1 2025 earnings call transcript, highlighting several key points:
Overall, Micron is optimistic about its growth prospects, particularly in the AI and data center markets, while managing challenges in the NAND segment and aligning its supply chain with market demand.
Earnings Report
Micron Technology, Inc. has released its earnings results for the first quarter of fiscal 2025, ending November 28, 2024. The company reported record revenue of $8.71 billion, a significant increase from $7.75 billion in the previous quarter and $4.73 billion in the same period last year. This growth was primarily driven by strong demand in the AI sector, with data center revenue growing over 40% sequentially and over 400% year-over-year .
Net income for the quarter was $1.87 billion on a GAAP basis, translating to $1.67 per diluted share. On a non-GAAP basis, net income was $2.04 billion, or $1.79 per diluted share. Operating cash flow was reported at $3.24 billion, slightly down from $3.41 billion in the previous quarter but significantly up from $1.40 billion in the same period last year .
Micron's CEO, Sanjay Mehrotra, highlighted that the company's data center revenue accounted for more than 50% of total revenue for the first time. Despite weaker consumer-oriented markets in the near term, Micron anticipates a return to growth in the second half of the fiscal year, leveraging AI-driven growth to create substantial value .
For the second quarter of fiscal 2025, Micron has provided guidance with expected revenue of $7.90 billion ± $200 million and a gross margin of 37.5% ± 1.0% on a GAAP basis. Non-GAAP guidance includes a gross margin of 38.5% ± 1.0% and diluted earnings per share of $1.43 ± $0.10 .
Micron's Board of Directors declared a quarterly dividend of $0.115 per share, payable on January 15, 2025, to shareholders of record as of December 30, 2024 .
Corporate Leadership
CEO Change
Micron Technology, Inc. announced on October 30, 2024, that Sanjay Mehrotra, the current CEO, has been elected as the new Chair of the Board of Directors, effective upon the retirement of the current Chair, Robert Switz, at the annual shareholders meeting on January 16, 2025 .