JPM _ Chips for Breakfast _ US Tech HW & Semis Daily_ MU (and the Asia View), Semis Outlook Call, CES & Taiwan_Korea Conf_

Summary of Conference Call Notes Company and Industry Overview - Company: Micron Technology, Inc. (MU) - Industry: Semiconductors, specifically focusing on DRAM and NAND memory products Key Points and Arguments 1. Quarterly Performance: MU reported an inline quarter with a 4 cents EPS beat, driven by robust DRAM bit shipments and high average selling price (ASP) growth, which offset weaker NAND bit shipments and pricing [5][5][5] 2. Datacenter Revenue Growth: Datacenter revenue mix, including High Bandwidth Memory (HBM), server DRAM, and enterprise SSD, grew by 40% sequentially, now comprising over 50% of total revenues, indicating strong demand driven by AI [5][5][5] 3. Guidance Concerns: The guidance for February quarter was poor across all metrics, primarily due to excess inventory in NAND and sluggish demand in consumer markets such as PCs and smartphones [5][5][5] 4. DRAM Pricing Outlook: Management expressed optimism that blended average DRAM pricing will increase sequentially in the February quarter due to strength in HBM and server DRAM demand [5][5][5] 5. Consumer Market Recovery: Management believes that consumer market issues will resolve in the upcoming quarter, citing a decrease in customer inventories in the fourth quarter [5][5][5] 6. Gross Margin Expectations: Gross margin is expected to decline by only 100 basis points, primarily due to NAND pricing pressures [5][5][5] 7. Long-term Outlook: Management raised the HBM market forecast for 2025 and beyond, expecting HBM market share to be in line or better than overall DRAM market share by the second half of 2025 [5][5][5] 8. Investor Sentiment: Some investors remain skeptical about the recovery, particularly in NAND, and were surprised by the unchanged capital expenditure for 2025 [5][5][5] 9. Price Target Adjustment: Analyst Harlan Sur lowered the earnings-based price target by approximately 20% to $145, while remaining confident that investors will soon start to factor in a recovery in the second half of 2025 [5][5][5] Additional Insights 1. Asian Market Perspective: Jay Kwon noted that MU's DRAM bit shipment growth was stronger than that of its Asian peers, indicating market share gains [18][18][18] 2. NAND Pricing Concerns: Kwon warned that NAND pricing might still be too high, potentially leading to a prolonged recovery period [18][18][18] 3. Competitive Landscape: MU's expansion of its customer base is expected to increase competition with Samsung, particularly in the eSSD market [18][18][18] 4. Media Speculation: Management did not adequately address media speculation regarding CXMT's success in DDR5 and LPDDR5, which some analysts believe is less of a threat [18][18][18] This summary encapsulates the critical insights from the conference call, highlighting both the challenges and opportunities facing Micron Technology in the semiconductor industry.