Core Insights - The article provides a perspective on investment opportunities in various stocks, emphasizing the author's unique insights and background [1] Group 1 - The analyst holds a beneficial long position in NVDA and AVGO, indicating confidence in these stocks [2] - The analysis aims to offer contrasting views to other investors, suggesting a focus on diverse investment strategies [1] - The article is intended for informational purposes, encouraging readers to conduct their own research before making investment decisions [3]

Core Viewpoint - Morgan Stanley upgraded Micron to overweight and raised its price target from 160 to 220, reflecting a significant positive outlook on the company's performance in the memory semiconductor sector [1]. Company Performance - Micron's stock has surged over 200% since its lows in April, indicating strong recovery and growth [1]. - As of the last close, Micron is up approximately 82.5% compared to the broader market and tech sector [2]. - Year-to-date, Micron has outperformed other chip makers, particularly due to its focus on memory chips, while competitors primarily produce CPUs and GPUs [3]. Technical Analysis - A shift from a moderately sloping uptrend to a steeper uptrend has been observed, with Micron making new relative highs [4]. - Recent trading patterns indicate a brief consolidation phase, followed by a renewed upward movement [5]. - The stock recently topped near a plus three standard deviation channel, with further upside potential indicated by a plus four channel at around 212.45 [6]. Options Strategy - An example trade strategy involves a moderately bullish approach using an unbalanced call butterfly for the October 31st weekly options [10]. - The strategy includes buying a 195 strike call, selling two 215 strike calls, and buying a 220 strike call, with a break-even point at approximately 201.1 [11]. - This approach allows for potential profitability if the stock moves towards or above the 215 strike, with significant upside potential if it exceeds the 220 strike [12].

Core Viewpoint - Micron Technology shares increased over 4.5% to $196.32 in premarket trading following an upgrade from Morgan Stanley, which changed its rating from "equal-weight" to "overweight" and raised the price target from $160 to $220 [1] Company Summary - Micron Technology's stock performance reflects positive market sentiment after the upgrade by Morgan Stanley [1] - The price target adjustment indicates increased confidence in Micron's future performance and growth potential [1]

Core Insights - Micron Technology's shares increased approximately 6% in premarket trading following an upgrade from Morgan Stanley, which changed the stock's rating from Equal-weight to Overweight [2] - Morgan Stanley also raised the price target for Micron's stock from $160 to $220, indicating a positive outlook for the company's future performance [2] Company Summary - The upgrade by Morgan Stanley reflects confidence in Micron's growth potential and market position [2] - The new price target suggests a significant upside for investors, highlighting the firm's belief in Micron's ability to perform well in the semiconductor industry [2]

Core Viewpoint - The Morgan Stanley analyst expresses optimism regarding the significant increase in memory prices, which is expected to lead to "substantially higher earnings power" for Micron [1] Group 1 - Memory prices are experiencing a boom, which is positively impacting the earnings potential of Micron [1] - The phrase "Better late than never" indicates a delayed but positive market response to memory price increases [1]

Core Insights - Micron is experiencing significant growth due to the rising demand for AI infrastructure, with its stock gaining 40.6% in September [1] - The company sold $2 billion worth of high-bandwidth memory (HBM) chips in Q4 fiscal 2025 and is preparing to launch next-generation HBM4 chips [3] - Micron's revenue increased by 46% year over year in Q4 to $11.3 billion, with a non-GAAP gross margin of 45.7% [5] Demand for AI Infrastructure - The demand for high-bandwidth memory is surging, driven by major deals with tech giants like OpenAI and Nvidia for AI data centers [2] - Micron is prioritizing HBM production over standard DRAM chips, despite weak demand in the PC and smartphone markets [4] Financial Performance - Micron's revenue for Q4 fiscal 2025 reached $11.3 billion, with adjusted earnings per share more than doubling [5] - The company anticipates generating around $12.5 billion in revenue in Q1 fiscal 2026, with a projected non-GAAP gross margin of approximately 51.5% [5] Market Dynamics - The memory chip market is cyclical, with pricing influenced by supply and demand dynamics [7] - Historical trends indicate that periods of high demand are often followed by downturns, posing risks to Micron's profitability [7][8]

Core Viewpoint - The ROM (Read-Only Memory) industry in China is experiencing significant growth, driven by advancements in cloud computing, big data, and artificial intelligence, with the market size projected to increase from 120.84 billion yuan in 2020 to 170.68 billion yuan by 2024, representing a compound annual growth rate (CAGR) of 9% [1][7]. Industry Overview - ROM is a type of semiconductor memory that is crucial for data storage and processing, with its primary function being the high-speed and automated access to programs and data [3]. - The ROM market is categorized into various types, including MROM, PROM, EPROM, EEPROM, and Flash, each with distinct characteristics and applications [4][8]. Industry Chain - The upstream of the ROM industry involves suppliers of semiconductor materials, photoresists, and masks, which are essential for ROM manufacturing [5]. - The downstream applications of ROM are extensive, covering sectors such as computing, communications, consumer electronics, automotive electronics, and industrial control, all of which have high demands for performance and quality [6]. Current Industry Status - The global semiconductor memory market is expanding, with China playing a vital role in breaking the overseas monopoly through domestic technology advancements. The semiconductor memory market in China is expected to reach 426.7 billion yuan by 2024, growing by 8.22% year-on-year [6][7]. Competitive Landscape - Major global players like Samsung, Intel, and Micron Technology dominate the ROM market, leveraging strong R&D capabilities and advanced production technologies [9]. - In China, domestic companies such as Zhaoyi Innovation, Dongxin Technology, and Jucheng Technology are enhancing their competitiveness due to technological advancements and supportive policies [9]. Future Development Trends - The semiconductor industry is expected to rebound, with increasing demand for ROM driven by the growth of portable, intelligent, and networked devices [12]. - Customization of ROM solutions is anticipated to rise, allowing for tailored storage capacities and read/write speeds to meet specific application needs, particularly in niche markets like industrial control and medical devices [13].

[Introduction](index=5&type=section&id=Introduction) This section provides an overview of the report's structure and foundational information PART I [Item 1. Business](index=7&type=section&id=Item%201.%20Business) Micron Technology, Inc. is a leading provider of innovative memory and storage solutions, including DRAM, NAND, and NOR products, serving various markets from data centers to mobile devices. The company recently reorganized its business units to better address AI-driven demand and maintains a global manufacturing and R&D footprint. Micron faces intense competition and relies on continuous technological advancement and efficient operations - Micron is an industry leader in memory and storage solutions, delivering high-performance DRAM, NAND, and NOR products through its Micron® and Crucial® brands[18](index=18&type=chunk) - Innovations fuel the data economy, enabling advances in AI and compute-intensive applications from data centers to mobile[18](index=18&type=chunk) - The company faces intense competition, requiring continuous R&D, new product development, and cost reduction to remain competitive[20](index=20&type=chunk) [Overview](index=8&type=section&id=Overview) [Business Segments](index=8&type=section&id=Business%20Segments) Micron reorganized into four business units to address AI-driven demand, focusing on cloud, data center, mobile, and automotive markets - Micron reorganized into four business units in Q4 2025: Cloud Memory Business Unit (CMBU), Core Data Center Business Unit (CDBU), Mobile and Client Business Unit (MCBU), and Automotive and Embedded Business Unit (AEBU)[21](index=21&type=chunk) - CMBU focuses on memory solutions for large hyperscale cloud customers and High-Bandwidth Memory (HBM) for all data center customers[21](index=21&type=chunk) - CDBU focuses on memory solutions for mid-tier cloud, enterprise, and OEM data center customers and storage solutions for all data center customers[21](index=21&type=chunk) [Products, Market, and Sales](index=9&type=section&id=Products,%20Market,%20and%20Sales) This section details Micron's product technologies, market applications, and sales performance across various business units [Product Technologies](index=9&type=section&id=Product%20Technologies) Micron's portfolio includes DRAM, NAND, and NOR, with recent innovations in 1γ DRAM and G9 NAND production - Micron's product portfolio includes DRAM, NAND, and NOR, sold in various forms such as components, modules, SSDs, managed NAND, multi-chip packages, and wafers[22](index=22&type=chunk) - In 2025, Micron began shipping the industry's first **1γ (1-gamma) production node DRAM**, which incorporates EUV lithography and offers improved power efficiency, performance, and bit density[24](index=24&type=chunk) - In 2024, Micron began volume production of **Micron G9 NAND**, representing the industry's ninth-generation 3D NAND node[31](index=31&type=chunk) Product Type Revenue | Product Type | 2025 Revenue ($B) | 2024 Revenue ($B) | 2023 Revenue ($B) | | :----------- | :---------------- | :---------------- | :---------------- | | DRAM | 28.58 | 17.60 | 10.98 | | NAND | 8.50 | 7.23 | 4.21 | [Products by Business Unit and Market](index=10&type=section&id=Products%20by%20Business%20Unit%20and%20Market) Sales across CMBU, CDBU, MCBU, and AEBU are driven by diverse memory and storage solutions for various end markets - CMBU sales to the data center end market are driven by server demand across the cloud market, including HBM, high-capacity DIMMs, and low-power server DRAM solutions, with **HBM3E 12-high** representing the majority of HBM shipments in Q4 2025[36](index=36&type=chunk)[38](index=38&type=chunk) - CDBU sales to OEM data center customers include DDR5 and DDR4, and in 2025, began shipping **9550 and 6550 ION SSDs**, and strengthened its portfolio with G9-based PCIe Gen6 SSDs[41](index=41&type=chunk)[42](index=42&type=chunk) - MCBU offers memory and storage for mobile and client segments, including **LPDDR5X memory built on the 1γ node** for AI applications in flagship smartphones, shipped in 2025[45](index=45&type=chunk)[47](index=47&type=chunk) - AEBU focuses on automotive, industrial, and consumer embedded segments, announcing production readiness of automotive LPDDR5X DRAM and automotive-qualified 4150 SSD in 2025[52](index=52&type=chunk)[53](index=53&type=chunk) Revenue by Business Unit | Business Unit | 2025 Revenue ($B) | 2024 Revenue ($B) | 2023 Revenue ($B) | | :------------ | :---------------- | :---------------- | :---------------- | | CMBU | 13.52 | 3.79 | 1.87 | | CDBU | 7.23 | 4.98 | 2.12 | | MCBU | 11.86 | 11.67 | 7.39 | | AEBU | 4.75 | 4.63 | 4.14 | [Marketing and Customers](index=12&type=section&id=Marketing%20and%20Customers) Micron markets products under Micron and Crucial brands, with approximately half of revenue from its top ten customers - Micron markets its semiconductor memory and storage products under its Micron and Crucial brand names, primarily through its direct sales force, distributors, retailers, and independent sales representatives[58](index=58&type=chunk) - Approximately **one-half of Micron's total revenue** in each of the last three years was from its top ten customers[60](index=60&type=chunk) [Competitive Conditions](index=13&type=section&id=Competitive%20Conditions) Micron faces intense competition from industry rivals and geopolitical challenges, necessitating continuous technological advancement - Micron faces intense competition from companies like Samsung, SK hynix, Kioxia, Sandisk, CXMT, and YMTC, some of whom benefit from government assistance and lower operating costs[61](index=61&type=chunk)[62](index=62&type=chunk) - The May 2023 decision by China's Cyberspace Administration (CAC) restricted critical information infrastructure operators in China from purchasing Micron products, adversely impacting its ability to compete[62](index=62&type=chunk) - Micron plans to advance process technology to increase bit output and improve yields, but faces risks from potential industry oversupply due to increased capital expenditures by competitors and rapid technological change[63](index=63&type=chunk) [Manufacturing](index=14&type=section&id=Manufacturing) Micron operates global manufacturing facilities, expanding capacity in the U.S. and other regions for advanced semiconductor production - Micron manufactures products in wholly-owned facilities in Taiwan, Singapore, Japan, the United States, Malaysia, China, and India, utilizing **300mm wafers** and operating 24/7[65](index=65&type=chunk) - Semiconductor manufacturing is capital-intensive and complex, with costs influenced by process line-width, 3D non-volatile layers, NAND cell levels, and manufacturing yield[66](index=66&type=chunk) - The company is expanding production capacity in the United States and other regions, which are complex, capital-intensive projects dependent on available materials, specialized equipment, and skilled labor[70](index=70&type=chunk) [Resources](index=15&type=section&id=Resources) This section covers Micron's supply chain, intellectual property, research and development, and human capital management [Supply Chain, Materials, and Third-Party Service Providers](index=15&type=section&id=Supply%20Chain,%20Materials,%20and%20Third-Party%20Service%20Providers) Micron's supply chain relies on limited suppliers for critical materials and services, facing risks from shortages and geopolitical tensions - Micron's supply chain relies on a limited number of suppliers for certain critical materials (e.g., chemicals, silicon wafers, gases) and third-party services (e.g., controllers, foundries, assembly, test)[71](index=71&type=chunk)[72](index=72&type=chunk) - Shortages, increased lead times, and inflationary pressures can increase costs and limit bit shipments, materially affecting business[71](index=71&type=chunk)[72](index=72&type=chunk) - Geopolitical tensions, trade disputes, and restrictions on rare earth elements (primarily from China) could limit material access and increase costs, impacting manufacturing capabilities[74](index=74&type=chunk)[75](index=75&type=chunk) [Patents and Licenses](index=16&type=section&id=Patents%20and%20Licenses) Micron holds over 60,000 global patents and actively monetizes its intellectual property through sales and licensing - As of August 28, 2025, Micron holds over **60,000 granted patents globally**, including approximately **15,000 active U.S. patents** and **7,500 active foreign patents**[79](index=79&type=chunk) - The company actively sells and licenses its technology, pursuing opportunities to monetize intellectual property through partnering and other arrangements[80](index=80&type=chunk) [Research and Development](index=17&type=section&id=Research%20and%20Development) R&D focuses on advanced memory and storage solutions, including 1γ DRAM, G9 NAND, and HBM technologies - R&D efforts focus on developing memory and storage solutions, including the **1γ production node DRAM** (first with EUV lithography) and **Micron G9 NAND node**[82](index=82&type=chunk) - **HBM3E technology is industry-leading**, and HBM4 technology is advancing, on schedule for volume production in calendar 2026[82](index=82&type=chunk) - R&D expenses are primarily driven by the number of development wafers, personnel costs, and investments in advanced equipment like EUV lithography[84](index=84&type=chunk) [Human Capital](index=17&type=section&id=Human%20Capital) Micron employs approximately 53,000 people globally, focusing on talent attraction, development, and well-being through comprehensive programs - Micron employs approximately **53,000 people globally**, focusing on attracting, developing, and retaining highly skilled STEM talent through partnerships and continuous learning[85](index=85&type=chunk)[86](index=86&type=chunk) - Compensation programs include base salary, bonuses, equity awards, and comprehensive benefits, with regular reviews to ensure fairness and market competitiveness[88](index=88&type=chunk) - The company fosters a culture of respect, psychological safety, and well-being, supported by employee assistance programs and **10 Employee Resource Groups (ERGs)**[89](index=89&type=chunk)[91](index=91&type=chunk) [Government Regulations](index=19&type=section&id=Government%20Regulations) Micron adheres to environmental and trade regulations, managing compliance and mitigating risks from evolving international laws [Environmental Compliance](index=19&type=section&id=Environmental%20Compliance) Micron proactively manages environmental compliance, with wafer fabrication facilities conforming to ISO 14001:2015 standards - Micron proactively manages environmental compliance and sustainability, adhering to federal, state, local, and foreign laws and regulations[96](index=96&type=chunk) - Wafer fabrication facilities conform to the **ISO 14001:2015 environmental management systems standard**, ensuring continuous performance improvement[96](index=96&type=chunk) [Trade Regulations](index=19&type=section&id=Trade%20Regulations) Micron's sales and technical transfers are subject to international trade laws, with changes potentially impacting costs and market access - Sales of products and transfer of technical information are subject to international trade laws, including export control, customs, and sanctions regulations administered by U.S. and other government agencies[97](index=97&type=chunk) - Changes in trade laws, increased tariffs, or other restrictions can increase product costs, reduce demand, and limit access to markets or materials[97](index=97&type=chunk) [Information About Our Executive Officers](index=20&type=section&id=Information%20About%20Our%20Executive%20Officers) Key executive officers include Sanjay Mehrotra, Mark J. Murphy, and Scott J. DeBoer, leading the company's strategic direction - Key executive officers include **Sanjay Mehrotra** (Chairman, President, and CEO), **Mark J. Murphy** (Executive Vice President and Chief Financial Officer), and **Scott J. DeBoer** (Executive Vice President, Chief Technology and Products Officer)[104](index=104&type=chunk)[105](index=105&type=chunk)[103](index=103&type=chunk) [Available Information](index=23&type=section&id=Available%20Information) Micron provides public information on its website and through SEC filings, disseminating material non-public financial data via investor relations - Micron provides public information on its website (www.micron.com), including corporate governance documents and SEC filings[109](index=109&type=chunk)[111](index=111&type=chunk) - Material non-public financial information is disseminated via the investor relations website, SEC filings, press releases, public conference calls, blog posts, and X (@MicronTech)[110](index=110&type=chunk) [Item 1A. Risk Factors](index=24&type=section&id=Item%201A.%20Risk%20Factors) Micron faces a broad range of risks, including significant volatility in product average selling prices and gross margins, geopolitical risks from international operations (e.g., CAC decision, Taiwan production), intense industry competition, and challenges in developing new technologies. Other risks include supply chain disruptions, economic downturns, manufacturing interruptions, customer concentration, product defects, cybersecurity threats, AI uncertainties, human capital challenges, and risks related to government incentives and capacity expansions. Legal and regulatory risks, including intellectual property litigation and evolving tax and environmental laws, also pose potential material adverse effects. Financial risks encompass cash flow generation, debt obligations, foreign currency fluctuations, counterparty default, and stock price volatility - Key risks include volatility in average selling prices, gross margin factors, international operations/geopolitical risks, intense industry competition, and ability to develop new technologies[116](index=116&type=chunk) - Other risks cover intellectual property protection, legal/regulatory investigations, compliance with laws/regulations (e.g., export restrictions, tariffs, tax laws), and financial market risks (cash flow, debt, currency rates, stock price volatility)[116](index=116&type=chunk) - Significant volatility in DRAM and NAND average selling prices (e.g., DRAM **+/- 40% range**, NAND **+/- 30-50% range** in past 5 years) can adversely affect business[117](index=117&type=chunk) - Gross margins are affected by manufacturing costs, product diversification, technology transitions, and capacity utilization; difficulties in ramping new technologies or forecasting AI demand can lead to elevated inventory and margin pressure[118](index=118&type=chunk)[119](index=119&type=chunk)[125](index=125&type=chunk) - International operations (Taiwan, Singapore, Japan, Malaysia, China, India) expose the company to geopolitical risks, including the CAC decision impacting sales in China and potential disruptions to Taiwan production[126](index=126&type=chunk)[130](index=130&type=chunk)[132](index=132&type=chunk) - Intense competition from major players and government-assisted new entrants can lead to oversupply and price declines, while failure to develop new technologies (e.g., HBM, EUV lithography) could impact future success[134](index=134&type=chunk)[138](index=138&type=chunk) - Dependency on government incentives (e.g., CHIPS Act) for funding capital expenditures carries risks of non-compliance, reduction, or clawback of funds[152](index=152&type=chunk)[153](index=153&type=chunk) - Supply chain disruptions, limited suppliers for critical materials (including rare earth elements from China), and reliance on third-party service providers can limit production and increase costs[155](index=155&type=chunk)[157](index=157&type=chunk)[160](index=160&type=chunk) - Uncertainties associated with AI use and evolution, including flawed algorithms, intellectual property risks, and evolving regulations, could adversely impact the business[182](index=182&type=chunk)[183](index=183&type=chunk) - Changes in tax laws (e.g., OBBBA in the U.S., Pillar Two globally) and challenges by tax authorities can significantly impact the effective tax rate and cash flows[211](index=211&type=chunk)[212](index=212&type=chunk) - Debt obligations (**$14.58 billion** as of Aug 28, 2025) require significant cash flow for principal and interest payments, impacting liquidity and future financing capacity[220](index=220&type=chunk) [Risk Factor Summary](index=24&type=section&id=Risk%20Factor%20Summary) Key risks include market volatility, geopolitical factors, intense competition, and challenges in technology development and regulatory compliance - Key risks include volatility in average selling prices, gross margin factors, international operations/geopolitical risks, intense industry competition, and ability to develop new technologies[116](index=116&type=chunk) - Other risks cover intellectual property protection, legal/regulatory investigations, compliance with laws/regulations (e.g., export restrictions, tariffs, tax laws), and financial market risks (cash flow, debt, currency rates, stock price volatility)[116](index=116&type=chunk) [Risks Related to Our Business, Operations, and Industry](index=25&type=section&id=Risks%20Related%20to%20Our%20Business,%20Operations,%20and%20Industry) [Risks Related to Intellectual Property and Litigation](index=40&type=section&id=Risks%20Related%20to%20Intellectual%20Property%20and%20Litigation) [Risks Related to Laws and Regulations](index=42&type=section&id=Risks%20Related%20to%20Laws%20and%20Regulations) [Risks Related to Capitalization and Financial Markets](index=44&type=section&id=Risks%20Related%20to%20Capitalization%20and%20Financial%20Markets) [Item 1B. Unresolved Staff Comments](index=47&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) Micron Technology, Inc. has no unresolved staff comments to report - No unresolved staff comments are reported[231](index=231&type=chunk) [Item 1C. Cybersecurity](index=47&type=section&id=Item%201C.%20Cybersecurity) Micron has a robust cybersecurity program aligned with NIST-CSF, including regular risk assessments, technical safeguards, and employee training. The Board of Directors, through its Security Committee, oversees cybersecurity risk management, with the Chief Security Officer and Chief Information Officer responsible for day-to-day management and regular reporting. No material cybersecurity incidents have been experienced - Micron's cybersecurity program aligns with **NIST-CSF**, with established policies and processes for assessing, identifying, and managing material risks[232](index=232&type=chunk) - The company conducts regular risk assessments, implements technical safeguards (firewalls, intrusion detection, access controls), and provides employee training[233](index=233&type=chunk)[235](index=235&type=chunk) - The Board of Directors, through its Security Committee, oversees cybersecurity risk management, with the Chief Security Officer and Chief Information Officer providing regular briefings[238](index=238&type=chunk)[239](index=239&type=chunk)[240](index=240&type=chunk) - Micron has not experienced any cybersecurity incidents determined to be material[237](index=237&type=chunk) [Risk Management and Strategy](index=47&type=section&id=Risk%20Management%20and%20Strategy) [Governance](index=47&type=section&id=Governance) [Item 2. Properties](index=49&type=section&id=Item%202.%20Properties) Micron operates principal facilities for R&D, wafer fabrication, and assembly/test across Taiwan, Singapore, the U.S., Japan, Malaysia, China, and India. The company is undertaking significant expansion in the U.S., including new DRAM manufacturing fabs in Idaho and New York, supported by up to $6.4 billion in CHIPS Act grants and a 35% investment tax credit, alongside $5.5 billion from New York State. Global investments also include an HBM advanced packaging facility in Singapore and modernization in Japan for EUV DRAM production - Micron's principal facilities for R&D, wafer fabrication, and assembly/test are located in Taiwan, Singapore, the United States, Japan, Malaysia, China, and India[243](index=243&type=chunk)[244](index=244&type=chunk) - The company is investing in leading-edge memory manufacturing sites in Idaho and New York, with construction of the first Idaho fab beginning in October 2023 and first DRAM wafer output projected in the **second half of calendar 2027**[245](index=245&type=chunk)[246](index=246&type=chunk) - Micron secured up to **$6.4 billion in CHIPS Act grants** for U.S. manufacturing expansion and modernization projects, including new fabs in Idaho and New York, and modernization in Virginia[248](index=248&type=chunk) - In addition to CHIPS Act direct funding, Micron receives a **35% investment tax credit** on qualified U.S. semiconductor manufacturing investments and up to **$5.5 billion in funding from New York State** for the planned four-fab facility[249](index=249&type=chunk) - Planned international investments include an assembly and test facility in Gujarat, India; modernization of the Hiroshima, Japan facility for EUV lithography; and an HBM advanced packaging facility in Singapore[250](index=250&type=chunk)[305](index=305&type=chunk) [Item 3. Legal Proceedings](index=50&type=section&id=Item%203.%20Legal%20Proceedings) Micron is involved in various legal proceedings, including multiple patent infringement lawsuits from entities such as Netlist, YMTC, Besang Inc., Palisade Technologies, LLP, and Advanced Memory Technologies, LLC, covering a wide range of its memory and storage products. The company also faces securities class action and shareholder derivative complaints. The outcomes of these matters are uncertain and could have a material adverse effect on its business, results of operations, or financial condition - Micron is subject to multiple patent infringement lawsuits from entities like Netlist, YMTC, Besang Inc., Palisade Technologies, LLP, and Advanced Memory Technologies, LLC, covering DRAM, NAND, and HBM products[397](index=397&type=chunk)[398](index=398&type=chunk)[399](index=399&type=chunk)[400](index=400&type=chunk)[401](index=401&type=chunk)[403](index=403&type=chunk)[404](index=404&type=chunk) - The company faces securities class action and shareholder derivative complaints alleging false or misleading statements regarding industry dynamics and product demand[405](index=405&type=chunk)[406](index=406&type=chunk)[407](index=407&type=chunk) - The outcome of these legal matters is unpredictable, and adverse resolutions could result in significant liability, operational changes, or material adverse effects on the business[410](index=410&type=chunk) [Item 4. Mine Safety Disclosures](index=50&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to Micron Technology, Inc - This item is not applicable[253](index=253&type=chunk) PART II [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities](index=51&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity,%20Related%20Stockholder%20Matters,%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Micron's common stock trades on Nasdaq under 'MU'. As of September 26, 2025, there were 1,443 shareholders of record. The Board declared a quarterly dividend of $0.115 per share payable October 21, 2025, with future dividends being discretionary. The company has a $10 billion share repurchase authorization, with $2.81 billion remaining as of August 28, 2025, and no repurchases in Q4 2025. The performance graph shows Micron's stock outperforming the S&P 500 and SOX over five years - Micron's common stock is listed on The Nasdaq Global Select Market under the trading symbol '**MU**'[255](index=255&type=chunk) - As of September 26, 2025, there were approximately **1,443 shareholders of record**[255](index=255&type=chunk) - The Board of Directors declared a quarterly dividend of **$0.115 per share**, payable in cash on October 21, 2025[256](index=256&type=chunk) - The Board authorized a discretionary repurchase of up to **$10 billion of common stock**, with **$2.81 billion remaining** as of August 28, 2025; no repurchases were made in Q4 2025[258](index=258&type=chunk) [Market Information](index=51&type=section&id=Market%20Information) [Holders of Record](index=51&type=section&id=Holders%20of%20Record) [Dividends](index=51&type=section&id=Dividends) [Issuer Purchase of Equity Securities](index=51&type=section&id=Issuer%20Purchase%20of%20Equity%20Securities) [Performance Graph](index=52&type=section&id=Performance%20Graph) Cumulative Total Returns (August 31, 2020 = $100) | Index | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | | :----------------------------- | :--- | :--- | :--- | :--- | :--- | :--- | | Micron Technology, Inc. | $100 | $162 | $125 | $156 | $216 | $268 | | S&P 500 Composite Index | 100 | 131 | 116 | 135 | 172 | 199 | | Philadelphia Semiconductor Index (SOX) | 100 | 153 | 122 | 169 | 240 | 266 | [Item 6. [Reserved]](index=50&type=section&id=Item%206.%20%5BReserved%5D) This item is reserved and contains no information - This item is reserved[264](index=264&type=chunk) [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=53&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Micron experienced substantial improvements in 2025, driven by accelerating AI demand, leading to higher DRAM pricing, volumes, and margins. Total revenue increased 49% in 2025, with gross margin improving to 40%. The company is making significant capital investments in new U.S. fabs, supported by CHIPS Act funding, and global manufacturing. Cash flow from operations increased to $17.53 billion in 2025. Critical accounting estimates, recently adopted, and issued accounting standards are also discussed - AI-driven demand is accelerating, outpacing industry supply and leading to substantial improvements in DRAM pricing, volumes, and margins in 2025[267](index=267&type=chunk) - Total revenue increased **49% in 2025** compared to 2024, and **62% in 2024** compared to 2023, primarily due to increased DRAM and NAND sales[272](index=272&type=chunk)[273](index=273&type=chunk) - Consolidated gross margin improved to **40% for 2025** from **22% for 2024**, driven by increases in average selling prices, an increased mix of higher-margin products (HBM), and manufacturing cost reductions[274](index=274&type=chunk) - Net cash provided by operating activities increased to **$17.53 billion in 2025** (from $8.51 billion in 2024) due to higher net income and changes in operating assets/liabilities[306](index=306&type=chunk) - Micron expects capital expenditures of approximately **$4.5 billion in Q1 2026**, net of government incentives, for new U.S. fabs and global manufacturing[293](index=293&type=chunk) - Secured up to **$6.4 billion in CHIPS Act grants** for U.S. manufacturing expansion and modernization, plus a **35% investment tax credit** on qualified investments[297](index=297&type=chunk)[299](index=299&type=chunk) [Overview](index=53&type=section&id=Overview) [Industry Conditions](index=53&type=section&id=Industry%20Conditions) [Results of Operations](index=54&type=section&id=Results%20of%20Operations) This section analyzes Micron's consolidated financial performance, including revenue, gross margin, and operating income by business unit [Consolidated Results](index=54&type=section&id=Consolidated%20Results) Micron's 2025 consolidated results show significant revenue growth and improved gross margins driven by DRAM and NAND sales Consolidated Results Summary | Metric | 2025 ($M) | 2024 ($M) | 2023 ($M) | 2025 % of Revenue | 2024 % of Revenue | 2023 % of Revenue | | :---------------------- | :-------- | :-------- | :-------- | :---------------- | :---------------- | :---------------- | | Revenue | 37,378 | 25,111 | 15,540 | 100% | 100% | 100% | | Cost of goods sold | 22,505 | 19,498 | 16,956 | 60% | 78% | 109% | | Gross margin | 14,873 | 5,613 | (1,416) | 40% | 22% | (9)% | | Operating income (loss) | 9,770 | 1,304 | (5,745) | 26% | 5% | (37)% | | Net income (loss) | 8,539 | 778 | (5,833) | 23% | 3% | (38)% | | Basic EPS | $7.65 | $0.70 | $(5.34) | | | | | Diluted EPS | $7.59 | $0.70 | $(5.34) | | | | - Total revenue for 2025 increased **49%** as compared to 2024, primarily due to increases in sales of both DRAM and NAND products[272](index=272&type=chunk) - Consolidated gross margin percentage improved to **40% for 2025** from **22% for 2024**, driven by increases in average selling prices, an increased mix of higher-margin products (HBM), and manufacturing cost reductions[274](index=274&type=chunk) [Inventory NRV Write-Downs](index=55&type=section&id=Inventory%20NRV%20Write-Downs) Inventory write-downs in 2023 impacted gross margin, with a partial benefit realized in 2024 from subsequent sales - In 2023, Micron recorded charges of **$1.83 billion** to write down inventories to their estimated net realizable value due to declines in average selling prices for DRAM and NAND[277](index=277&type=chunk) - These write-downs resulted in a **$987 million benefit** to consolidated gross margin in 2024 due to lower costs from the sale of inventories written down in prior periods[277](index=277&type=chunk) [Revenue by Business Unit](index=55&type=section&id=Revenue%20by%20Business%20Unit) CMBU, CDBU, and MCBU experienced revenue increases in 2025, primarily driven by AI demand and average selling price improvements - CMBU revenue increased **257% in 2025**, primarily due to increases in DRAM bit shipments and average selling prices driven by accelerating AI demand in cloud server markets for HBM, DIMMs, and low-power server DRAM[279](index=279&type=chunk) - CDBU revenue increased **45% in 2025**, primarily due to increases in average selling prices for both data center DRAM and NAND and NAND bit shipments due to increased demand for data center SSDs[279](index=279&type=chunk) - MCBU revenue increased **2% in 2025**, primarily due to increases in DRAM and NAND revenue, with higher DRAM average selling prices partially offset by decreases in bit shipments as supply was constrained for higher-value segments[279](index=279&type=chunk) Revenue by Business Unit | Business Unit | 2025 Revenue ($M) | 2024 Revenue ($M) | 2023 Revenue ($M) | | :------------ | :---------------- | :---------------- | :---------------- | | CMBU | 13,524 | 3,792 | 1,872 | | CDBU | 7,229 | 4,984 | 2,124 | | MCBU | 11,859 | 11,667 | 7,394 | | AEBU | 4,753 | 4,631 | 4,139 | [Operating Income (Loss) by Business Unit](index=56&type=section&id=Operating%20Income%20(Loss)%20by%20Business%20Unit) Operating income significantly improved across CMBU, CDBU, and MCBU in 2025 due to higher prices, shipments, and cost reductions - CMBU operating income increased significantly in 2025, primarily due to higher bit shipments and increases in average selling prices driven by robust AI demand in cloud server markets, particularly for HBM, DIMMs, and low-power server DRAM products[281](index=281&type=chunk) - CDBU operating income increased in 2025, primarily due to increases in data center average selling prices, higher bit shipments, and manufacturing cost reductions[281](index=281&type=chunk) - MCBU operating income improved in 2025, primarily due to increases in DRAM average selling prices, manufacturing cost reductions, and higher NAND bit shipments, partially offset by decreases in NAND average selling prices and constrained DRAM bit shipments[281](index=281&type=chunk) Operating Income (Loss) by Business Unit | Business Unit | 2025 Operating Income ($M) | 2024 Operating Income ($M) | 2023 Operating Income ($M) | 2025 % of Revenue | 2024 % of Revenue | 2023 % of Revenue | | :------------ | :------------------------- | :------------------------- | :------------------------- | :---------------- | :---------------- | :---------------- | | CMBU | 6,129 | 244 | (768) | 45% | 6% | (41)% | | CDBU | 2,180 | 255 | (563) | 30% | 5% | (27)% | | MCBU | 1,981 | (1) | (3,189) | 17% | 0% | (43)% | | AEBU | 557 | 432 | 680 | 12% | 9% | 16% | [Operating Expenses and Other](index=56&type=section&id=Operating%20Expenses%20and%20Other) R&D and SG&A expenses increased in 2025, while interest income improved and tax provision was reduced by incentive arrangements - Research and Development (R&D) expenses increased **11% in 2025** compared to 2024, primarily due to increases in employee compensation, depreciation expense, and higher volumes of development and pre-qualification wafers[282](index=282&type=chunk) - Selling, General, and Administrative (SG&A) expenses for 2025 increased **7%** as compared to 2024, primarily due to an increase in employee compensation and professional services[283](index=283&type=chunk) - Interest income (expense), net, improved in 2025 compared to 2024, primarily due to decreases in interest expense resulting from increased capitalized interest driven by higher levels of building construction[285](index=285&type=chunk) - The income tax provision for 2025 was **$(1,124) million**, with an effective tax rate of **11.6%**, compared to $(451) million and 36.4% in 2024, primarily due to changes in profitability[286](index=286&type=chunk) - Tax incentive arrangements reduced the tax provision by **$1.05 billion in 2025**, benefiting diluted earnings per share by **$0.93**[287](index=287&type=chunk) - Future tax rates are expected to be in the **mid to high-teens percentage range** starting in 2026, influenced by the U.S. One Big Beautiful Bill Act (OBBBA) and global Pillar Two Model Rules[288](index=288&type=chunk) [Liquidity and Capital Resources](index=58&type=section&id=Liquidity%20and%20Capital%20Resources) This section details Micron's cash flow activities, capital expenditures, and financing strategies, including debt and government incentives [Cash Flows](index=59&type=section&id=Cash%20Flows) Operating cash flow significantly increased in 2025, while investing activities focused on capital expenditures, partially offset by government incentives Cash Flow Summary | For the year ended | 2025 ($M) | 2024 ($M) | 2023 ($M) | | :----------------- | :-------- | :-------- | :-------- | | Net cash provided by operating activities | 17,525 | 8,507 | 1,559 | | Net cash used for investing activities | (14,087) | (8,309) | (6,191) | | Net cash provided by (used for) financing activities | (850) | (1,842) | 4,983 | | Net increase (decrease) in cash, cash equivalents, and restricted cash | 2,594 | (1,604) | 317 | - Net cash provided by operating activities increased to **$17.53 billion in 2025**, primarily due to higher net income and favorable changes in receivables and accounts payable[306](index=306&type=chunk) - Net cash used for investing activities was **$14.09 billion in 2025**, primarily for **$15.86 billion in capital expenditures**, partially offset by **$2.01 billion in government incentives**[308](index=308&type=chunk) - Net cash used for financing activities was **$850 million in 2025**, consisting primarily of **$4.62 billion in debt repayments** and **$522 million in dividend payments**, partially offset by **$4.43 billion from new debt issuances**[311](index=311&type=chunk) [Critical Accounting Estimates](index=60&type=section&id=Critical%20Accounting%20Estimates) Micron's critical accounting estimates involve significant judgment in areas such as contingencies, goodwill, government incentives, and inventory valuation [Contingencies](index=61&type=section&id=Contingencies) Estimating potential losses from contingencies requires significant judgment, with accruals made when probable and reasonably estimable - Estimating the probability and amount of potential losses from various contingencies requires significant judgment, with accruals made when a potential loss is both probable and reasonably estimable[315](index=315&type=chunk) [Goodwill](index=61&type=section&id=Goodwill) Goodwill is annually tested for impairment, involving judgment in fair value determination based on revenue growth, costs, and discount rates - Goodwill is tested annually for impairment, involving significant judgment in determining the fair value of reporting units based on estimates like revenue growth rates, manufacturing costs, and discount rates[316](index=316&type=chunk)[317](index=317&type=chunk) - In 2023, a **$101 million charge** was recognized to impair goodwill assigned to the former Storage Business Unit; no impairment was found in 2025 after segment reorganization[316](index=316&type=chunk) [Government Incentives](index=61&type=section&id=Government%20Incentives) Government incentives are recognized when conditions are met, reducing asset carrying amounts or offsetting operating expenses based on project costs - Government incentives are recognized when there is reasonable assurance that conditions are met, reducing asset carrying amounts for capital expenditures or offsetting related operating expenses[318](index=318&type=chunk)[319](index=319&type=chunk) - Estimates of total expected project costs are used to recognize a proportionate benefit as qualified costs are incurred, with adjustments made for changes in estimates[319](index=319&type=chunk) [Income Taxes](index=62&type=section&id=Income%20Taxes) Estimating income tax provision and deferred tax asset realizability involves significant judgment, regulatory interpretations, and future taxable income forecasts - Estimating the provision for income taxes and the realizability of deferred tax assets involves significant judgment, interpretations of regulations, and forecasting future taxable income in various jurisdictions[320](index=320&type=chunk) [Inventories](index=62&type=section&id=Inventories) Inventories are valued at the lower of cost or net realizable value, requiring judgment in projecting future selling prices, volumes, and costs - Inventories are stated at the lower of cost or net realizable value (NRV), requiring significant judgment in projecting future average selling prices, sales volumes, and costs per part[321](index=321&type=chunk) - A **5% decrease** in future average selling prices would have changed the estimated NRV of finished goods and work in process inventories by approximately **$750 million** as of August 28, 2025[321](index=321&type=chunk) [Property, Plant, and Equipment](index=62&type=section&id=Property,%20Plant,%20and%20Equipment) Useful lives of property, plant, and equipment are periodically assessed, with impairment reviews relying on future cash flow judgments - Estimated useful lives of property, plant, and equipment are periodically assessed based on technology node transitions and capital spending; impairment reviews involve significant judgment on future cash flows[323](index=323&type=chunk) [Revenue Recognition](index=62&type=section&id=Revenue%20Recognition) Revenue is recognized upon transfer of control, with estimates for returns and price protection based on historical data and pricing trends - Revenue is recognized when control of promised goods is transferred; estimates for returns and price protection for distributors are based on historical data and current pricing trends[324](index=324&type=chunk) [Recently Adopted Accounting Standards](index=63&type=section&id=Recently%20Adopted%20Accounting%20Standards) Micron adopted ASU 2023-07 in Q4 2025, retrospectively adjusting segment disclosures - Micron adopted **ASU 2023-07** (Improvements to Reportable Segment Disclosures) in the fourth quarter of 2025 on a retrospective basis, resulting in increased disclosures in Note 27[365](index=365&type=chunk) [Recently Issued Accounting Standards](index=63&type=section&id=Recently%20Issued%20Accounting%20Standards) Upcoming accounting standards, including ASU 2023-09, 2024-03, and 2025-06, will impact future income tax and expense disclosures - **ASU 2023-09** (Improvements to Income Tax Disclosures) will be effective for annual reporting for 2026, requiring disaggregated income tax disclosures[366](index=366&type=chunk) - **ASU 2024-03** (Disaggregation of Income Statement Expenses) will be effective for annual reporting for 2028, requiring disclosure of certain expenses[367](index=367&type=chunk) - **ASU 2025-06** (Targeted Improvements to the Accounting for Internal-Use Software) will be effective for the first quarter of 2029, with evaluation of its impact ongoing[368](index=368&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=63&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Micron is exposed to interest rate risk from its fixed-rate debt ($10.55 billion as of August 28, 2025) and floating-rate debt ($984 million), with potential impacts on fair value and annual interest expense. The company also faces foreign currency exchange rate risk from international operations, primarily in CAD, CNY, EUR, INR, JPY, MYR, TWD, and SGD, which it mitigates using rolling hedge strategies with currency forward contracts - As of August 28, 2025, Micron had fixed-rate debt with a carrying value of **$10.55 billion**; a hypothetical **1% decrease** in market interest rates would increase its fair value by approximately **$660 million**[328](index=328&type=chunk) - As of August 28, 2025, floating-rate debt had a principal amount of **$984 million**; a hypothetical **1% increase** in interest rates would result in an increase in annual interest expense of **$10 million**[330](index=330&type=chunk) - Micron's operations are exposed to foreign currency exchange rate fluctuations, primarily in the Canadian dollar, Chinese yuan, euro, Indian rupee, Japanese yen, Malaysian ringgit, New Taiwan dollar, and Singapore dollar[331](index=331&type=chunk) - The company uses rolling hedge strategies with currency forward contracts, generally maturing within three months to two years, to hedge exposures to changes in currency exchange rates[332](index=332&type=chunk) - A hypothetical **10% adverse change** in exchange rates versus the U.S. dollar would result in losses of approximately **$572 million** as of August 28, 2025[332](index=332&type=chunk) [Interest Rate Risk](index=63&type=section&id=Interest%20Rate%20Risk) Micron is exposed to interest rate risk from fixed and floating-rate debt, impacting fair value and annual interest expense - As of August 28, 2025, Micron had fixed-rate debt with a carrying value of **$10.55 billion**; a hypothetical **1% decrease** in market interest rates would increase its fair value by approximately **$660 million**[328](index=328&type=chunk) - As of August 28, 2025, floating-rate debt had a principal amount of **$984 million**; a hypothetical **1% increase** in interest rates would result in an increase in annual interest expense of **$10 million**[330](index=330&type=chunk) [Foreign Currency Exchange Rate Risk](index=63&type=section&id=Foreign%20Currency%20Exchange%20Rate%20Risk) Foreign currency exchange rate fluctuations, primarily in Asian currencies, are mitigated using rolling hedge strategies with forward contracts - Micron's operations are exposed to foreign currency exchange rate fluctuations, primarily in the Canadian dollar, Chinese yuan, euro, Indian rupee, Japanese yen, Malaysian ringgit, New Taiwan dollar, and Singapore dollar[331](index=331&type=chunk) - The company uses rolling hedge strategies with currency forward contracts, generally maturing within three months to two years, to hedge exposures to changes in currency exchange rates[332](index=332&type=chunk) - A hypothetical **10% adverse change** in exchange rates versus the U.S. dollar would result in losses of approximately **$572 million** as of August 28, 2025[332](index=332&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=63&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents Micron's audited consolidated financial statements for fiscal years 2025, 2024, and 2023, including statements of operations, comprehensive income (loss), balance sheets, changes in equity, and cash flows. It also includes detailed notes to the financial statements covering significant accounting policies, recent accounting standards, cash and investments, receivables, inventories, property, plant, and equipment, leases, intangible assets, accounts payable, debt, commitments, contingencies, equity, fair value measurements, derivative instruments, equity compensation plans, employee benefit plans, government incentives, revenue and customer contract liabilities, restructure and asset impairments, other operating/non-operating income/expense, income taxes, earnings per share, segment information, certain concentrations, and geographic information. The report of the independent registered public accounting firm and critical audit matters are also included - The section includes the Consolidated Statements of Operations, Comprehensive Income (Loss), Balance Sheets, Changes in Equity, and Cash Flows for fiscal years 2025, 2024, and 2023[334](index=334&type=chunk) - Detailed Notes to Consolidated Financial Statements (Note 1 through Note 29) provide comprehensive information on accounting policies, financial instruments, debt, equity, and other financial aspects[343](index=343&type=chunk) - PricewaterhouseCoopers LLP provided an unqualified opinion on the consolidated financial statements and the effectiveness of internal control over financial reporting as of August 28, 2025[478](index=478&type=chunk) - A critical audit matter identified is the accounting for U.S. CHIPS Act funding agreements, due to significant management judgment in assessing recognition of proportionate benefits and compliance with covenants[485](index=485&type=chunk) [Index to Consolidated Financial Statements](index=63&type=section&id=Index%20to%20Consolidated%20Financial%20Statements) [Consolidated Statements of Operations](index=66&type=section&id=Consolidated%20Statements%20of%20Operations) This statement summarizes Micron's revenue, gross margin, operating income, net income, and diluted EPS for fiscal years 2023-2025 Consolidated Statements of Operations Summary | For the year ended | August 28, 2025 | August 29, 2024 | August 31, 2023 | | :----------------- | :-------------- | :-------------- | :-------------- | | Revenue | $37,378 | $25,111 | $15,540 | | Gross margin | $14,873 | $5,613 | $(1,416) | | Operating income (loss) | $9,770 | $1,304 | $(5,745) | | Net income (loss) | $8,539 | $778 | $(5,833) | | Diluted EPS | $7.59 | $0.70 | $(5.34) | [Consolidated Statements of Comprehensive Income (Loss)](index=67&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) This statement presents Micron's net income and other comprehensive income (loss) components for fiscal years 2023-2025 Consolidated Statements of Comprehensive Income (Loss) Summary | For the year ended | August 28, 2025 | August 29, 2024 | August 31, 2023 | | :----------------- | :-------------- | :-------------- | :-------------- | | Net income (loss) | $8,539 | $778 | $(5,833) | | Other comprehensive income (loss) | $102 | $178 | $248 | | Total comprehensive income (loss) | $8,641 | $956 | $(5,585) | [Consolidated Balance Sheets](index=68&type=section&id=Consolidated%20Balance%20Sheets) This statement provides a snapshot of Micron's assets, liabilities, and equity as of August 28, 2025, and August 29, 2024 Consolidated Balance Sheets Summary | As of | August 28, 2025 ($M) | August 29, 2024 ($M) | | :--------------------- | :------------------- | :------------------- | | Total current assets | 28,841 | 24,372 | | Total assets | 82,798 | 69,416 | | Total current liabilities | 11,454 | 9,248 | | Long-term debt | 14,017 | 12,966 | | Total liabilities | 28,633 | 24,285 | | Total equity | 54,165 | 45,131 | [Consolidated Statements of Changes in Equity](index=69&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Equity) This statement details changes in Micron's common stock, additional capital, retained earnings, and other comprehensive income for 2025 Consolidated Statements of Changes in Equity Summary (As of August 28, 2025) | As of August 28, 2025 | Common Stock (Shares) | Common Stock (Amount) | Additional Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Total Shareholders' Equity | | :-------------------- | :-------------------- | :-------------------- | :----------------- | :---------------- | :------------- | :-------------------------------------------- | :------------------------- | | Balance | 1,266 | $127 | $13,339 | $48,583 | $(7,852) | $(32) | $54,165 | - Net income of **$8,539 million** contributed to equity in 2025[341](index=341&type=chunk) - Stock-based compensation expense was **$972 million** in 2025[341](index=341&type=chunk) - Dividends declared were **$527 million** in 2025[341](index=341&type=chunk) [Consolidated Statements of Cash Flows](index=70&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This statement summarizes Micron's cash flows from operating, investing, and financing activities for fiscal years 2023-2025 Consolidated Statements of Cash Flows Summary | For the year ended | August 28, 2025 ($M) | August 29, 2024 ($M) | August 31, 2023 ($M) | | :----------------- | :------------------- | :------------------- | :------------------- | | Net cash provided by operating activities | 17,525 | 8,507 | 1,559 | | Net cash used for investing activities | (14,087) | (8,309) | (6,191) | | Net cash provided by (used for) financing activities | (850) | (1,842) | 4,983 | | Net increase (decrease) in cash, cash equivalents, and restricted cash | 2,594 | (1,604) | 317 | [Notes to Consolidated Financial Statements](index=71&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) These notes provide detailed explanations of Micron's accounting policies, financial instruments, debt, equity, and other financial disclosures [Note 1. Significant Accounting Policies](index=71&type=section&id=Note%201.%20Significant%20Accounting%20Policies) This note outlines Micron's key accounting policies, including consolidation, fiscal year, derivative instruments, inventories, and revenue recognition - Consolidated financial statements include Micron Technology, Inc. and its consolidated subsidiaries, prepared in accordance with U.S. GAAP[344](index=344&type=chunk) - The fiscal year is the 52- or 53-week period ending on the Thursday closest to August 31; Fiscal 2025, 2024, and 2023 each contained **52 weeks**[345](index=345&type=chunk) - Micron uses derivative instruments to manage exposure to changes in currency exchange rates and commodity prices, with accounting based on the intended use and designation[346](index=346&type=chunk)[347](index=347&type=chunk) - Inventories are stated at the lower of cost or net realizable value, with cost determined on a FIFO basis and including depreciation, labor, material, and overhead costs[353](index=353&type=chunk) - Revenue is primarily recognized at a point in time when control of promised goods is transferred to customers, with estimates for returns and price protection for distributors[361](index=361&type=chunk) [Note 2. Recently Adopted Accounting Standards](index=75&type=section&id=Note%202.%20Recently%20Adopted%20Accounting%20Standards) Micron adopted ASU 2023-07 in Q4 2025, retrospectively adjusting reportable segment disclosures - Micron adopted **ASU 2023-07** (Improvements to Reportable Segment Disclosures) in the fourth quarter of 2025 on a retrospective basis, resulting in increased disclosures in Note 27[365](index=365&type=chunk) [Note 3. Recently Issued Accounting Standards](index=75&type=section&id=Note%203.%20Recently%20Issued%20Accounting%20Standards) Upcoming accounting standards, including ASU 2023-09, 2024-03, and 2025-06, will impact future income tax and expense disclosures - **ASU 2023-09** (Improvements to Income Tax Disclosures) will be effective for annual reporting for 2026, requiring disaggregated income tax disclosures[366](index=366&type=chunk) - **ASU 2024-03** (Disaggregation of Income Statement Expenses) will be effective for annual reporting for 2028, requiring disclosure of certain expenses[367](index=367&type=chunk) - **ASU 2025-06** (Targeted Improvements to the Accounting for Internal-Use Software) will be effective for the first quarter of 2029, with early adoption permitted and evaluation of its impact ongoing[368](index=368&type=chunk) [Note 4. Variable Interest Entities](index=75&type=section&id=Note%204.%20Variable%20Interest%20Entities) Micron uses third-party special purpose entities for equipment lease financing but does not consolidate them - Micron utilizes third-party special purpose entities (Lease SPEs) to facilitate equipment lease financing transactions but does not consolidate them as it lacks the power to direct their most significant economic activities[369](index=369&type=chunk) - As of August 28, 2025, Micron had approximately **$1.58 billion of financial lease liabilities** and right-of-use assets under these arrangements[369](index=369&type=chunk) [Note 5. Cash and Investments](index=76&type=section&id=Note%205.%20Cash%20and%20Investments) Total cash and marketable investments were $11.94 billion as of August 28, 2025, with a portion held by foreign subsidiaries Cash and Investments (As of August 28, 2025) | As of August 28, 2025 | Cash and Cash Equivalents ($M) | Short-term Investments ($M) | Long-term Marketable Investments ($M) | Total Fair Value ($M) | | :-------------------- | :----------------------------- | :-------------------------- | :------------------------------------ | :-------------------- | | Cash | 7,875 | — | — | 7,875 | | Money market funds | 410 | — | — | 410 | | Certificates of deposit | 1,292 | 6 | — | 1,298 | | Corporate bonds | 23 | 559 | 1,047 | 1,629 | | Asset-backed securities | — | 31 | 521 | 552 | | Government securities | 9 | 43 | 61 | 113 | | Commercial paper | 33 | 26 | — | 59 | | Total | 9,642 | 665 | 1,629 | 11,936 | - Total cash and marketable investments were **$11.94 billion** as of August 28, 2025, with **$5.20 billion** held by foreign subsidiaries[291](index=291&type=chunk)[371](index=371&type=chunk) - Non-marketable equity investments totaled **$194 million** as of August 28, 2025, with net losses of **$10 million** recognized in 2025[372](index=372&type=chunk) [Note 6. Receivables](index=77&type=section&id=Note%206.%20Receivables) Receivables include trade, government incentives, and income taxes, totaling $9.27 billion as of August 28, 2025 Receivables (As of August 28, 2025) | As of August 28, 2025 | Amount ($M) | | :-------------------- | :---------- | | Trade receivables | 7,163 | | Government incentives | 1,572 | | Income and other taxes | 436 | | Other | 94 | | Total | 9,265 | [Note 7. Inventories](index=77&type=section&id=Note%207.%20Inventories) Inventories, including finished goods, work in process, and raw materials, totaled $8.36 billion as of August 28, 2025 Inventories (As of August 28, 2025) | As of August 28, 2025 | Amount ($M) | | :-------------------- | :---------- | | Finished goods | 1,094 | | Work in process | 6,401 | | Raw materials and supplies | 860 | | Total | 8,355 | - In 2023, Micron recorded charges of **$1.83 billion** to cost of goods sold to write down the carrying value of work in process and finished goods inventories to their estimated net realizable value[374](index=374&type=chunk) [Note 8. Property, Plant, and Equipment](index=77&type=section&id=Note%208.%20Property,%20Plant,%20and%20Equipment) Net property, plant, and equipment totaled $46.59 billion as of August 28, 2025, with significant depreciation and capitalized interest Property, Plant, and Equipment (As of August 28, 2025) | As of August 28, 2025 | Amount ($M) | | :-------------------- | :---------- | | Land | 420 | | Buildings | 22,173 | | Equipment | 79,934 | | Construction in progress | 5,518 | | Software | 1,651 | | Accumulated depreciation | (63,106) |\ | Net | 46,590 | - Depreciation expense was **$8.28 billion** for 2025[375](index=375&type=chunk) - Interest capitalized as part of the cost of property, plant, and equipment was **$321 million** for 2025[375](index=375&type=chunk) [Note 9. Leases](index=77&type=section&id=Note%209.%20Leases) Micron has finance and operating leases for facilities, land, and equipment, with total lease costs of $615 million in 2025 - Micron has finance and operating leases for facilities, land, and equipment, with finance leases primarily for equipment and gas supply agreements, and operating leases for offices and laboratories[376](index=376&type=chunk) Lease Cost Components | Lease Cost Component | 2025 ($M) | 2024 ($M) | 2023 ($M) | | :------------------- | :-------- | :-------- | :-------- | | Finance lease cost | 462 | 246 | 129 | | Operating lease cost | 153 | 140 | 137 | | Total | 615 | 386 | 266 | - Non-cash acquisitions of right-of-use assets totaled **$1.298 billion** for finance leases and **$166 million** for operating leases in 2025[379](index=379&type=chunk) - As of August 28, 2025, excluded obligations for leases that have been executed but not yet commenced totaled **$1.16 billion** for finance lease obligations[380](index=380&type=chunk) [Note 10. Intangible Assets](index=79&type=section&id=Note%2010.%20Intangible%20Assets) Net intangible assets, primarily product and process technology, totaled $453 million as of August 28, 2025 Intangible Assets (As of August 28, 2025) | As of August 28, 2025 | Gross Amount ($M) | Accumulated Amortization ($M) | Net Carrying Amount ($M) | | :-------------------- | :---------------- | :---------------------------- | :----------------------- | | Product and process technology | 662 | (217) | 445 | | Other | 8 | — | 8 | | Total | 670 | (217) | 453 | - In 2025, Micron capitalized **$112 million** for product and process technology, with a weighted-average useful life of **9 years**[381](index=381&type=chunk) - Amortization expense for intangible assets was **$71 million** for 2025[381](index=381&type=chunk) [Note 11. Accounts Payable and Accrued Expenses](index=79&type=section&id=Note%2011.%20Accounts%20Payable%20and%20Accrued%20Expenses) Accounts payable and accrued expenses totaled $9.65 billion as of August 28, 2025, including property, plant, and equipment payables Accounts Payable and Accrued Expenses (As of August 28, 2025) | As of August 28, 2025 | Amount ($M) | | :-------------------- | :---------- | | Accounts payable | 3,132 | | Property, plant, and equipment | 4,391 | | Salaries, wages, and benefits | 1,116 | | Income and other taxes | 628 | | Other | 382 | | Total | 9,649 | [Note 12. Debt](index=80&type=section&id=Note%2012.%20Debt) Total debt, including notes and finance lease obligations, was $14.58 billion as of August 28, 2025, with new issuances and repayments Debt Summary (As of August 28, 2025) | Debt Instrument | Stated Rate | Principal (2025, $M) | Net Carrying Amount (2025, $M) | Principal (2024, $M) | Net Carrying Amount (2024, $M) | | :-------------------- | :---------- | :------------------- | :----------------------------- | :------------------- | :----------------------------- | | 2028 Notes | 5.375% | 542 | 540 | 600 | 597 | | 2029 Term Loan A | 5.455% | 984 | 982 | — | — | | 2029 A Notes | 5.327% | 700 | 698 | 700 | 698 | | 2029 B Notes | 6.750% | 1,159 | 1,168 | 1,250 | 1,261 | | 2030 Notes | 4.663% | 796 | 794 | 850 | 847 | | 2031 Notes | 5.300% | 1,000 | 995 | 1,000 | 994 | | 2032 Green Bonds | 2.703% | 1,000 | 996 | 1,000 | 996 | | 2032 Notes | 5.650% | 500 | 496 | — | — | | 2033 A Notes | 5.875% | 750 | 746 | 750 | 745 | | 2033 B Notes

Core Viewpoint - Investors are encouraged to consider Micron (MU) due to solid improvements in earnings estimates and positive short-term price momentum [1][9] Estimate Revisions - The upward trend in earnings estimate revisions indicates growing analyst optimism regarding Micron's earnings prospects, which is expected to positively impact its stock price [2] - The Zacks Rank system, which ranges from 1 (Strong Buy) to 5 (Strong Sell), has shown that stocks with a Zacks Rank 1 have generated an average annual return of +25% since 2008 [3] - Strong agreement among analysts has led to significant upward revisions in consensus earnings estimates for both the current quarter and the full year [3] Current-Quarter Estimates - Micron is projected to earn $3.75 per share for the current quarter, reflecting a year-over-year increase of +109.5% [5] - Over the past 30 days, the Zacks Consensus Estimate for Micron has risen by 26.69%, with seven estimates moving higher and no negative revisions [5] Current-Year Estimates - For the full year, Micron is expected to earn $16.58 per share, representing a year-over-year change of +100.0% [6] - The consensus estimate has increased by 27.14% over the past month, with nine estimates moving higher and no negative revisions [6][7] Zacks Rank - Micron currently holds a Zacks Rank 1 (Strong Buy) due to favorable estimate revisions, which is a reliable indicator for investors [8] - Research indicates that stocks with Zacks Rank 1 and 2 significantly outperform the S&P 500 [8] Bottom Line - Investors have shown strong interest in Micron, evidenced by a 47.9% stock gain over the past four weeks, driven by positive earnings growth prospects [9]

Core Insights - Micron Technology reported record NAND revenues of $8.5 billion in fiscal 2025, representing an 18% year-over-year increase [1] - In Q4 of fiscal 2025, NAND sales reached $2.3 billion, accounting for approximately 20% of total revenues, with a 5% growth compared to the previous quarter [1][9] - The company anticipates fiscal 2026 NAND revenues to be $10.42 billion, indicating a year-over-year growth of 22.5%, with total revenues projected to grow 43.4% to $53.61 billion [4][9] NAND Product Development - Micron is focusing on its new G9 NAND to enhance performance, ramping up production of both TLC and QLC NAND, with G9 QLC NAND now qualified for enterprise storage [2] - The addition of PCIe Gen6 SSDs aims to support high-performance data center workloads, including AI inference and large-scale storage [2] Market Demand and Trends - Demand in the data center storage market is being driven by AI applications such as vector database indexing and key-value cache tiering [3] - A shortage of hard disk drives (HDDs) is expected to further boost NAND demand [3] Competitive Landscape - Micron competes with Western Digital Corporation and Seagate Technology Holdings in the data storage market, with Western Digital having a broader portfolio that includes both traditional HDDs and NAND-based SSDs [5] - Seagate is a significant player in the HDD market, particularly for high-capacity storage solutions, and is expanding its presence in the SSD market [6] Financial Performance and Valuation - Micron's shares have increased by approximately 119.2% year-to-date, outperforming the Zacks Computer – Integrated Systems industry's growth of 50.2% [7] - The company trades at a forward price-to-sales ratio of 3.76, slightly below the industry average of 4.04 [11] - The Zacks Consensus Estimate for Micron's fiscal 2026 and 2027 earnings suggests a year-over-year increase of 100% and 12%, respectively, with upward revisions in the past 30 days [14]