Micron Technology(US:MU) Huachuang Securities·2024-07-10 09:01Investment Rating - The report does not explicitly mention an investment rating for Micron Technology (MU) [1][2][3] Core Views - Micron Technology's FY2024Q3 revenue reached $6.81 billion, up 82% YoY and 17% QoQ, exceeding the guidance range [1][2] - Non-GAAP gross margin for FY2024Q3 was 28.1%, up 44.2 pct YoY and 8.1 pct QoQ, driven by price increases, product mix optimization, and cost reductions [1][2] - AI-driven demand is creating a supply-demand gap, with strong growth expected in HBM, high-capacity DIMMs, and data center SSDs [2][18][26] Revenue and Profitability - DRAM revenue accounted for 69% of total revenue at $4.7 billion, with bit shipments down mid-single digits QoQ but ASPs up approximately 20% [12][14] - NAND revenue was $2.1 billion, up 32% QoQ, with bit shipments up high-single digits and ASPs up approximately 20% [13][14] - Data center SSD revenue hit a record high, with shipments of 232-layer 6,500 30TB SSDs more than tripling [18][21] Market Segments - Data center: AI server demand is driving growth, with HBM3E revenue exceeding $100 million in FY2024Q3 and expected to reach several hundred million dollars in FY2024 [2][18] - PC: AI PCs are expected to drive growth in 2025, with DRAM capacity increasing by 40%-80% compared to traditional PCs [22] - Mobile: Micron's LP5X supports 12GB and 16GB AI smartphones, with DRAM content expected to grow 50%-100% compared to last year's flagship models [23] - Automotive: Automotive revenue hit a record high, driven by strong demand for memory and storage in new vehicle platforms [24] Industry Supply and Demand - DRAM and NAND bit demand is expected to grow by mid-teens percentage in 2024, with supply remaining below demand due to HBM production constraints [8][35] - HBM3E consumes approximately three times the wafer supply of D5, leading to tight DRAM supply across all end markets [8][35] - Micron expects DRAM and NAND wafer capacity to be down double digits by the end of FY2024 compared to FY2022 peak levels [8][35] Future Guidance - FY2024Q4 revenue guidance is $7.6 billion ± $200 million, up 11.6% QoQ and 95% YoY, with Non-GAAP gross margin expected at 34.5% ± 100 bps [26][28] - DRAM bit shipments are expected to remain flat in FY2024Q4, while NAND bit shipments are expected to increase slightly [26] - Capital expenditure for FY2024 is projected at $8 billion, with significant increases expected in FY2025 to support HBM and greenfield fab construction [9][26][35] Technology and Innovation - Micron is advancing its 1-alpha and 1-beta DRAM nodes, with over 80% of DRAM bits produced on leading nodes [30] - The company is on track to achieve high-volume production of its next-generation NAND node in 2025 [30] - HBM3E 12Hi 36GB products were sampled in March 2024, with high-volume production expected in 2025 [2][18]