Micron Technology(US:MU)2025-03-21 11:47Financial Data and Key Metrics Changes - Total fiscal Q2 revenue was approximately $8.1 billion, down 8% sequentially and up 38% year-over-year [43] - Fiscal Q2 DRAM revenue was $6.1 billion, up 47% year-over-year, representing 76% of total revenue [43] - Fiscal Q2 NAND revenue was $1.9 billion, up 18% year-over-year, representing 23% of total revenue [44] - Consolidated gross margin for fiscal Q2 was 37.9%, down 160 basis points sequentially [48] - Fiscal Q2 adjusted EBITDA was $4.1 billion, resulting in an EBITDA margin of 50.7%, up 10 basis points sequentially [49] Business Line Data and Key Metrics Changes - Compute and Networking business unit revenue was up 4% sequentially to $4.6 billion, reaching 57% of total revenue [45] - Storage business unit revenue was $1.4 billion, down 20% sequentially due to lower storage investments from data center customers [46] - Mobile business unit revenue was $1.1 billion, down 30% sequentially as mobile customers improved their inventory positions [47] - Embedded business unit revenue was $1 billion, down 3% sequentially due to inventory improvement initiatives at automotive customers [47] Market Data and Key Metrics Changes - Data center DRAM revenue reached a new record, with HBM revenue growing more than 50% sequentially to over $1 billion [10] - The company projects mid-single-digit server unit growth in calendar 2025, with strong demand for HBM [18] - The PC market is expected to grow mid-single digits in unit terms in calendar 2025, driven by AI applications [28] - Smartphone unit volume growth in calendar 2025 remains at low single-digit percentages [30] Company Strategy and Development Direction - The company is focused on growing HBM capacity in existing manufacturing facilities to meet requirements through 2026 [14] - Investments include a new HBM advanced packaging facility in Singapore and a new DRAM fab in Idaho [15] - The company aims to maintain its leadership position in low-power DRAM for servers as it transitions to SOCAMM form factor [24] - The strategy includes disciplined investments to capitalize on growth opportunities driven by AI [14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating current market dynamics with disciplined investments and a focus on high-value products [60] - The company anticipates record revenue and improved profitability in fiscal 2025 [60] - Management noted that AI adoption is a significant driver for increased demand across various markets [30][91] - The company expects to generate multibillion dollars in HBM revenue in fiscal 2025 [22] Other Important Information - The company expects fiscal Q3 revenue to be approximately $8.8 billion, with a gross margin in the range of 36.5% [57] - Capital expenditures for fiscal 2025 are projected to be approximately $14 billion, focusing on HBM and facility construction [40] - The company ended fiscal Q2 with $9.6 billion in cash and investments, maintaining $12.1 billion of liquidity [52] Q&A Session Summary Question: Will gross margins improve in fiscal Q4? - Management indicated that while fiscal Q3 gross margins are expected to be lower, they anticipate improvements in fiscal Q4 due to better market conditions and growth in high-value products [66][70] Question: What is driving the increased industry bit demand outlook for DRAM? - Management noted that improved customer inventory levels and the growing presence of AI in smartphones and PCs are contributing to the increased demand outlook for DRAM [71][72] Question: How much of the fiscal Q3 revenue growth is expected from DRAM versus NAND? - Management confirmed that the growth bias will be primarily from DRAM, particularly due to HBM and data center exposure [79] Question: How sustainable are the recent improvements in memory prices? - Management highlighted that demand trends are improving, particularly in DRAM and NAND, driven by customer inventory adjustments and strong data center demand [90][92] Question: What is the impact of HBM technology transitions on gross margins? - Management stated that while there may be initial yield challenges with new HBM technologies, they expect the transition to be accretive to DRAM margins over time [96][98]