Micron Technology (NasdaqGS:MU) 2025 Conference November 19, 2025 08:15 AM ET Company ParticipantsMark Adams - CEOScott DeBoer - EVP Technology and Product OfficerConference Call ParticipantsNone - AnalystModeratorGood morning, everyone. Thank you all for joining the RBC TIMT Conference. Thanks, Mark, and thanks, Scott. Also, we have Satya from the IR team at Micron in the audience. We have roughly about 45 minutes or so. Mark's going to start off with a few comments, then we'll get into Q&A. We should have ...

Summary of Conference Call Notes Industry Overview - The conference call discusses the AI industry and its supply chain dynamics, particularly focusing on the impact of high-end chip shortages and power supply constraints on the overall efficiency and cost of the industry [1][2]. Key Points and Arguments 1. **Surge in AI Computing Demand** The rapid increase in AI computing demand is driven by significant investments, such as the trillion-dollar computing plan from OBA and further financing from Cloud to expand computing capacity [2]. 2. **Supply Constraints** Supply-side constraints are evident in chip production and power supply, with Nvidia's high-end chips being scarce and electricity shortages affecting overall supply [2]. 3. **Impact on Domestic Supply Chain** The scarcity of overseas high-end chips and power directly boosts domestic supply chain demand, particularly benefiting sectors like optical module manufacturing. Companies like Industrial Fulian and Xuchuang are positioned well for growth due to their strong production capabilities [3]. 4. **Nvidia's Capacity Issues** Nvidia's capacity constraints are primarily due to tight supply of HBM 4 (High Bandwidth Memory) and limited CoWoS (Chip on Wafer on Substrate) packaging capacity. Hynix monopolizes HBM 4 supply, while TSMC employs a volume-locking strategy to maintain CoWoS prices [5]. 5. **Price Increases and Long-term Contracts** Nvidia and its supply chain are responding to price pressures by locking in volumes and signing long-term contracts. Hynix has raised HBM 4 prices by 50%, and TSMC has announced price increases for wafers over four consecutive years, enhancing their bargaining power and profit margins [6]. 6. **Resource Concentration Effects** The concentration of resources in the AI industry is squeezing non-AI sectors. High electricity prices for data centers are forcing energy-intensive industries like aluminum smelting and chemicals to cut back or exit the market. Resources previously allocated for cryptocurrency mining are now being redirected to data center construction, further driving up prices for non-AI products [7][8]. 7. **Changes in TSMC's Client Structure** TSMC's shift in client structure from Apple to Nvidia prioritizes capacity allocation for higher-margin AI businesses, potentially leading to price increases for non-AI products like mobile chips. This shift creates opportunities for domestic companies engaged in mature process production to fill the market gap left by TSMC's reduced competition [9]. 8. **Memory Market Adjustments** The memory sector is also experiencing changes due to rising AI demand. The price increase of HBM 4 is prompting companies like Samsung and Hynix to allocate more resources to HBM products, reducing traditional memory production and leading to overall price increases in the memory market [10]. Additional Important Insights - The shortage of skilled labor in the foundry sector is exacerbating manufacturing bottlenecks, particularly in cabinet manufacturing, which is critical for the production of AI-related hardware [5]. - The overall market environment is shifting, requiring upstream and downstream companies to adjust their strategies to adapt to the new dynamics driven by AI demand and supply constraints [10].