Key Takeaways Micron's Embedded Business revenues rose 20% sequentially in Q3 to $1.2 billion on strong AI-driven demand. AI use in factory automation and autos boosted sales, aided by tight supply and low channel inventory. Micron reorganized its business units in June to focus more deeply on AI-led growth opportunities.Micron Technology’s (MU) Embedded Business Unit saw strong growth in the third quarter of fiscal 2025. The business unit’s revenues were up 20% sequentially to $1.2 billion. The company a ...

Financial Data and Key Metrics Changes - Micron reported record revenue of $9.3 billion in fiscal Q3, up 15% sequentially and 37% year over year, exceeding guidance [29] - DRAM revenue reached $7.1 billion, up 51% year over year, representing 76% of total revenue [29] - NAND revenue was $2.2 billion, up 4% year over year, representing 23% of total revenue [29] - Gross margin for fiscal Q3 was 39%, up 110 basis points sequentially and 250 basis points year over year [32] - Non-GAAP diluted EPS was $1.91, above guidance, with 22% sequential growth and over 200% year-over-year increase [33] Business Line Data and Key Metrics Changes - Compute and networking business unit revenue was $5.1 billion, up 11% sequentially, driven by nearly 50% sequential increase in HBM [30] - Storage business unit revenue was $1.5 billion, up 4% sequentially, primarily due to increased consumer-oriented revenue [31] - Mobile business unit revenue was $1.6 billion, up 45% sequentially, driven by reduced customer inventories and strong demand [31] - Embedded business unit revenue was $1.2 billion, up 20% sequentially, supported by growth in industrial and consumer embedded markets [31] Market Data and Key Metrics Changes - Data center DRAM revenue reached a new record for the fourth consecutive quarter, driven by strong growth and share gains [14] - The company expects the CY25 server market to grow in the mid-single digits percentage, largely driven by significant growth in AI servers [13] - The smartphone market is expected to grow in low single digits in calendar 2025, with increasing adoption of AI-enabled devices [20] Company Strategy and Development Direction - Micron completed a strategic reorganization around key market segments to capitalize on AI growth opportunities [7] - The company plans to invest approximately $200 billion in the U.S. over the next 20 years, including $150 billion in manufacturing and $50 billion in R&D [10] - Micron is focused on transitioning to new technology nodes, including one gamma DRAM, which offers significant improvements in performance and efficiency [8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in a robust demand environment, expecting revenue growth of 15% sequentially in fiscal Q4 [7] - The company anticipates industry DRAM bit demand growth in the high teens percentage range and NAND bit demand growth in the low double digits [23] - Management noted that customer inventory levels are healthy, with a constructive demand environment expected for the remainder of the calendar year [90] Other Important Information - Micron's operating cash flows were over $4.6 billion in fiscal Q3, with free cash flows of over $1.9 billion, the highest in over six years [33] - The company is on allocation for D4 products due to increasing shortages, with final shipments expected in two to three quarters [26] Q&A Session Summary Question: How do you see the HBM TAM scaling with the Accelerator TAM? - Management expects HBM revenue to grow from $18 billion in 2025 to approximately $35 billion, with significant growth in HBM demand [41] Question: What is driving the upside in gross margins? - The increase in gross margins was driven by strong sequential volume growth and better-than-expected pricing [48] Question: What is the current status of HBM market share? - Micron is already at a run rate of over $6 billion for HBM and expects to achieve industry share for HBM earlier than previously anticipated [60] Question: What is the plan for NAND utilization moving into next year? - The company plans to manage NAND utilization based on market conditions, with leading-edge NAND fully utilized [68] Question: How is the qualification of HBM4 progressing? - HBM4 is on track for customer qualifications, with strong performance expected in power efficiency and overall capabilities [96]