Micron Technology, Inc.
Fiscal Q1 2024 Earnings Call Prepared Remarks

SATYA KUMAR, CORPORATE VICE PRESIDENT, INVESTOR RELATIONS AND TREASURY
Thank you, and welcome to Micron Technology's fiscal first-quarter 2024 financial conference call. On thecall with me today are Sanjay Mehrotra, our president and CEO, and Mark Murphy, our CFO. Today’s call isbeing webcast from our Investor Relations site at investors.micron.com, including audio and slides. In
addition, the press release detailing our quarterly results has been posted on the website, along with the
prepared remarks for this call.
Today’s discussion of financial results is presented on a non-GAAP financial basis unless otherwise
specified. A reconciliation of GAAP to non-GAAP financial measures can be found on our website. We
encourage you to visit our website at micron.com throughout the quarter for the most current
information on the company, including information on financial conferences that we may be attending.
You can also follow us on X at MicronTech.
As a reminder, the matters we are discussing today include forward-looking statements regarding market
demand and supply, our expected results, and other matters. These forward-looking statements are
subject to risks and uncertainties that may cause actual results to differ materially from statements madetoday. We refer you to the documents we file with the SEC, including our most recent Form 10-K and
10-Q, for a discussion of risks that may affect our future results. Although we believe that the expectations
reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels ofactivity, performance, or achievements. We are under no duty to update any of the forward-looking
statements to conform these statements to actual results.
I'll now turn the call over to Sanjay.

SANJAY MEHROTRA, PRESIDENT AND CHIEF EXECUTIVE OFFICER
Thank you, Satya.
Good afternoon, everyone.
Intro and FQ1 Highlights
In fiscal Q1, Micron delivered revenue, gross margin and EPS above the high end of the guidance ranges
we provided at the last earnings call, reflecting Micron’s strong execution combined with improved
pricing.
We are in the very early stages of a multi-year growth phase catalyzed and driven by generative AI, andthis disruptive technology will eventually transform every aspect of business and society. Memory is at theheart of GPU-enabled AI servers, and we are already seeing strong demand driven by early deployment of© 2023 Micron Technology, Inc.

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Fiscal Q1 2024 Earnings Call Prepared Remarks

AI solutions, which will only accelerate over time. Micron is well positioned to leverage this growth, having
executed the most robust set of new technology and product introductions in our 45-year history.
The improved supply-demand environment in the current calendar quarter gives us additional confidence
in the trajectory of our business. We have driven a strong inflection in industry pricing this calendar
quarter, which will allow us to benefit from higher prices earlier in our fiscal year compared to prior plans.
We intend to stay very disciplined with our supply and capacity investments as our pricing is still far fromlevels associated with necessary return on investment (ROI). We expect our pricing to continue tostrengthen through the course of calendar 2024. We expect improved margins and financial performancethroughout 2024, and record industry total addressable market (TAM) in calendar 2025.
Technology Update
We have made significant progress with our industry-leading technology roadmap.
Micron is at the forefront of ramping the industry’s most advanced technology nodes in both DRAM and
NAND. The vast majority of our bits are on leading-edge nodes: 1α (1-alpha) and 1β (1-beta) in DRAM
and 176-layer and 232-layer in NAND. As previously stated, both 1β DRAM and 232-layer NAND nodes
have reached mature yields faster than the prior nodes. We expect fiscal 2024 front-end cost reductions
to track in line with our long-term expectations of mid-to-high single digits in DRAM and low teens in
NAND. We are on track for volume production in 1γ (1-gamma) DRAM using extreme ultraviolet
lithography (EUV) in calendar 2025.
End Markets
Now turning to our end markets.
Inventories for memory and storage are at or near normal levels for most customers across PC, mobile,
automotive and industrial end markets. Consequently, the demand that we see from customers in thesemarkets is closer to their end-market demand. Data center customer inventory of memory and storage is
improving, and we continue to expect customer inventory to approach normal levels in this market
sometime in the first half of calendar 2024. Across our data center and PC markets, we are ahead of theindustry in our transition to DDR5 (D5) and we expect to cross over our D5 volume from DDR4 (D4) inearly calendar 2024.
Generative artificial intelligence (AI) use cases are expanding from the data center to the edge, withseveral recent announcements of AI-enabled PCs, smartphones with on-device AI capabilities, as well asembedded AI in the auto and industrial end markets.
The proliferation of on-device AI at the edge offers a host of benefits such as enhanced privacy, lower
latency, improved performance, greater personalization and competitive costs for a wide range of use
cases, from content creation to productivity.
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Fiscal Q1 2024 Earnings Call Prepared Remarks

We see a rapid evolution in our customer product roadmaps enabling and leveraging this AI market
expansion, which in turn is driving higher capacity, lower power and increased performance requirements
for memory and storage. We expect to increasingly benefit from content growth as these trends in AI gain
momentum.
Data CenterIn data center, total server unit shipments are expected to increase by a mid-single-digit percentage incalendar 2024, following a year of low double-digit percentage decline in calendar 2023. Demand for AI
servers has been strong as data center infrastructure operators shift budgets from traditional servers tomore content-rich AI servers. Also, in response to AI-driven data center demand, several customers haveannounced aggressive roadmaps for new graphics processing unit (GPU) and AI accelerator ASIC productintroductions with increasing requirements for high bandwidth memory (HBM) capacity, performance, andpower.
Micron is addressing these exciting opportunities brought on by the proliferation of AI with an industryleading portfolio of data center solutions, including HBM3E, D5, several types of high-capacity server
memory modules, low power DRAM (LPDRAM), and data center SSDs.
We have received very positive customer feedback on our HBM3E, which has approximately 10% better
performance and about 30% lower power consumption compared to competitive offerings of HBM3E. In
fiscal Q1, we shipped samples of HBM3E to a number of key partners and are making good progress in
our qualifications. Micron is in the final stages of qualifying our industry-leading HBM3E to be used in
NVIDIA's next generation Grace Hopper GH200 and H200 platforms. In addition, our LP5X is being used
for the Grace CPU, driving a new use case for LP memory in the data center for accelerated computing.
We are on track to begin our HBM3E volume production ramp in early calendar 2024 and to generate
several hundred millions of dollars of HBM revenue in fiscal 2024. We expect continued HBM revenue
growth in 2025, and we continue to expect that our HBM market share will match our overall DRAM bit
share sometime in calendar 2025.
Last month we introduced the industry's fastest and lowest latency 128GB high-capacity modules built on
our industry-leading 1β node and using a monolithic die, which does not require 3D stacking and thus
enables a simpler process flow for assembly. Featuring best-in-class performance, our solution will
support customers’ memory-intensive data center workloads today and into the future. Additionally,leading CPU vendors have confirmed validation support for our monolithic-die-based 128GB modules on
existing platforms released in 2022 and 2023 as well as upcoming new platforms. This ensures that ouroffering has a significant TAM that we can address immediately. We expect volume production to startnext quarter, with significant growth in fiscal 2025 and beyond.

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Fiscal Q1 2024 Earnings Call Prepared Remarks

A testament to our solid execution and superior offerings, Micron ended the third calendar quarter withrecord-high revenue share in data center SSDs, based on independent industry assessments. This marks
the second consecutive quarter of record revenue share in data center SSDs, and we look to build on thisrevenue momentum through fiscal 2024.
PC
In PCs, we forecast unit volumes to grow by a low to mid-single-digit percentage in calendar 2024, after
two years of double-digit percentage PC unit volume declines.
We expect PC OEMs to start ramping AI-on-device PCs in the second half of calendar 2024, with anadditional capacity of 4 to 8GB of DRAM per unit, and we see average SSD capacities increasing as well.
We also completed qualifications for our industry-leading 1β-based 16Gb D5 at several PC customers infiscal Q1.
In fiscal Q1, we achieved record bit shipments in both client and consumer SSDs, as customers adopted
our industry-leading solutions. Building upon our QLC leadership, our client SSD QLC bit shipments alsoreached a new record in fiscal Q1. QLC now comprises the majority of our bit shipment mix for both clientand consumer SSD.
This month, we also announced we are shipping the Micron 3500 NVMe SSD, the world’s first
performance client SSD with 200+ layer NAND. Built on our industry-leading 232-layer NAND, the 3500
will help our customers handle demanding workloads for business applications, scientific computing,
gaming and content creation.
MobileIn mobile, smartphone demand is showing signs of recovery, and we forecast smartphone unit shipments
to grow modestly in calendar 2024.
Leading chipset vendors have announced powerful new products supporting on-device large language
models with ten billion or more parameters. We expect smartphone OEMs to start ramping AI-enabled
smartphones in 2024, with an additional capacity of 4 to 8GB of DRAM per unit.
Longer term, many popular generative AI applications will be on smartphones, and our leading productportfolio is poised to capture this memory and storage opportunity. Our new industry-leading 9.6Gbps
LP5X will address the bandwidth requirements of the most demanding AI-based mobile applications. We
also began sampling our next-generation 232-layer NAND UFS 3.1 and our 1β DRAM 24Gb LP5X to
support the memory needs of emerging AI foundational models.
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Micron Technology, Inc.
Fiscal Q1 2024 Earnings Call Prepared Remarks

Last, I’ll cover auto and industrial, which are end markets we value as part of the portfolio due to theirrelatively more predictable revenue and profitability and long-term growth opportunity.
The proliferation of AI at the edge continues to increase in the industrial and auto markets. For memory,
this translates to content growth in a host of AI-enabled edge devices. For example, AI-enabled industrial
PCs have 3-5 times more memory than standard PCs and there is an 8 times increase in memory content
for AI-enabled edge video security cameras compared to standard non-AI video cameras.
Our automotive business achieved a new quarterly revenue record in fiscal Q1, driven by better demandand volume ramps of new vehicle platforms. As the leader in automotive market share and quality, Micron
will benefit from memory and storage content growth as automotive OEMs expand features in ADAS andin-cabin applications. Our automotive design win trajectory remains strong.
Our industrial business saw double-digit sequential growth in fiscal Q1 as the industrial market continued
to recover. Inventory levels for memory and storage continued to improve at distribution partners and areat normal levels at the majority of our customers. Industry fundamentals remain strong for memory andstorage as the widespread adoption of IoT, AI and machine learning solutions creates new growth
opportunities for us.
Market Outlook
Now, turning to our market outlook, starting with demand:
We expect calendar 2023 DRAM bit demand to grow in the high-single-digit percentage range, up fromprior expectations for mid-single-digit growth. In NAND, we continue to expect calendar 2023 bit demand
growth in the high-teens percentage range. Looking forward, over the next few years, we expect bit
demand growth CAGRs of mid-teens in DRAM and low-20s percentage range in NAND.
We forecast calendar 2024 bit demand growth for the industry to be near the long-term CAGR for DRAM
and somewhat below the long-term CAGR for NAND.
Turning to supply:
Significant supply reductions across the industry have enabled the recovery that is now underway. An
extended period of supply growth less than demand growth would strengthen the pace of recovery.
Micron will continue to exercise supply and capex discipline, aligned with our strategy to maintain our
long-term bit market share for DRAM and NAND.
Micron’s fiscal 2024 capex is projected to be between $7.5 billion and $8.0 billion, slightly higher than lastyear’s levels and prior plans, primarily to support the HBM3E production ramp. We continue to expect
wafer fab equipment (WFE) capex in fiscal 2024 to be down year over year.

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Fiscal Q1 2024 Earnings Call Prepared Remarks

As we have discussed previously, the ramp of HBM production will constrain supply growth in non-HBM
products and will help improve the overall DRAM industry supply-demand balance. Across the industry,the HBM3E die is roughly twice the size of equivalent-capacity D5. Additionally, the HBM product includes
a logic interface die and has a substantially more complex packaging stack that impacts yields. These
factors result in HBM consuming more than two times the wafer supply as D5 to produce a given numberof bits.
In last quarter’s earnings call, we communicated that we strategically diverted underutilized equipment
toward ramping new technology nodes, which will help us increase leading-edge production in a capitalefficient manner. Since the number of wafer processing steps is higher for leading-edge nodes, thisapproach of diverting underutilized tools to the leading edge meaningfully reduces our overall wafer
capacity. Thus, underutilization in our fabs early this fiscal year transitions to structurally lower wafer
capacity at higher utilization rates as we move through the fiscal year. Reports indicate that thisredeployment of underutilized tools at the leading edge is an industry-wide practice that is likely toconstrain industry supply in 2024.
Taking all these factors into account, Micron’s bit supply growth in fiscal 2024 is planned to be well below
demand growth for both DRAM and NAND, and we expect to decrease our days of inventory in fiscal year2024.
We expect calendar 2024 industry supply to be below demand for both DRAM and NAND, which will
result in a contraction of industry inventory levels.
As we have highlighted before, we continue to work with the U.S. government and CHIPS grants are
assumed in our capex plans for fiscal 2024. The viability and global competitiveness of our Idaho and New
York projects depends on Micron receiving CHIPS grants to address the cost difference compared tooverseas expansion.
To better support our customers around the globe, we have opened state-of-the-art assembly and test
facilities in Malaysia and Taiwan. We are proceeding with our previously announced expansion of our
Xi'an facility, having received approval from Chinese authorities for our planned investment. In fiscal Q1,
we achieved the first mobile customer qualification of LPDRAM assembled at our Xi’an site — furthering
our strong commitment to serve our mobile customers in China.
Our broad, diverse network of global operations remains a key element of our strategy to address
customer demand in a reliable and resilient fashion. Our leading technology, strengthening productportfolio, strong manufacturing capabilities, and our dedicated team members position us well to capture
the opportunities ahead. I will now turn it over to Mark for our financial results and outlook.

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Micron Technology, Inc.
Fiscal Q1 2024 Earnings Call Prepared Remarks

MARK MURPHY, EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
Thanks, Sanjay, and good afternoon, everyone.
Opening
Micron delivered strong results in fiscal Q1 with revenue, gross margin, and EPS higher than the upper
end of the guidance range we provided in our last earnings call. During the quarter, an improving supplydemand environment and our team’s strong execution resulted in higher prices across DRAM and NAND.
The current pricing trajectory has improved our financial outlook for the second quarter and full fiscal
year.
Revenue
Total fiscal Q1 revenue was approximately $4.7 billion, up 18% sequentially and up 16% year over year.
DRAM
Fiscal Q1 DRAM revenue was $3.4 billion, representing 73% of total revenue. DRAM revenue increased
24% sequentially, with bit shipments increasing in the low-20s percentage range and prices increasing in
the low-single-digit percentage range. Robust bookings entering the quarter, including customer strategicbuys that occurred in prior quarters for FQ1 shipment, limited our reported FQ1 DRAM price increases
despite Micron's strong execution on CQ4 pricing. Our strong calendar Q4 price execution contributes toour solid sequential growth in FQ2, even with the effect of seasonality.
NAND
Fiscal Q1 NAND revenue was $1.2 billion, representing 26% of Micron’s total revenue. NAND revenue
increased 2% sequentially with pricing more than offsetting an expected and communicated decline involumes. Bit shipments declined in the mid-teens percentage range after record shipments in the priorquarter, and prices increased by approximately 20%. Portfolio mix improvements in NAND contributed tothe increase.
Revenue by Business Unit
Now turning to revenue by business unit.
Compute and Networking Business Unit revenue was $1.7 billion, up 45% sequentially. Data center andclient shipments strengthened in the quarter. AI-related shipments increased in the data center market
and normalized inventory at client customers enabled bit shipment growth.

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Fiscal Q1 2024 Earnings Call Prepared Remarks

Revenue for the Mobile Business Unit was $1.3 billion, up 7% sequentially. Mobile revenue continued toshow strength as customer inventories normalized and smartphone units and average memory andstorage capacity growth at customers drove demand. Our mobile fiscal Q1 revenue almost doubled fromyear-ago levels.
Embedded Business Unit revenue was $1 billion, up 21% sequentially. Growth was strong across most end
markets.
Revenue for the Storage Business Unit was $653 million, down 12% sequentially due to sharply lower
consumer component sales, partially offset by strong growth in SSD revenue.
Operating Results
Gross Margin
The consolidated gross margin for fiscal Q1 was near 1%, improving 10 percentage points sequentiallyand driven by higher prices and a greater mix of DRAM products.
Opex
Operating expenses in fiscal Q1 were $992 million, up $150 million sequentially and in line with our lateNovember update. Opex increased on higher R&D expenditures and the reinstatement of certain
compensation programs suspended in the prior fiscal year including short-term incentive compensation.
Operating Income
We had an operating loss of $955 million in fiscal Q1, resulting in an operating margin of negative 20%,
improved from negative 30% in the prior quarter.
Taxes
Fiscal Q1 taxes were $59 million, lower than the anticipated $80 million based on an updated view ofprojected taxes across the year, driven by our improved fiscal 2024 outlook.
Earnings Per ShareThe non-GAAP loss per share in fiscal Q1 was $0.95 compared to a non-GAAP loss per share of $1.07 in
the prior quarter and a non-GAAP loss per share of $0.04 in the year-ago quarter.
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Fiscal Q1 2024 Earnings Call Prepared Remarks

Turning to cash flows and capital spending, our operating cash flows were approximately $1.4 billion in
fiscal Q1 representing 30% of revenue. During the quarter, we received $600 million in customer
prepayments to secure supply for leading-edge memory products.
Capital expenditures were $1.7 billion during the quarter resulting in free cash flow of negative $333
million in the quarter.
Inventory
Our fiscal Q1 ending inventory was $8.3 billion or 159 days, down from 170 days in the prior quarter. As
mentioned in prior quarters, we hold strategic inventory stock associated with build ahead of products forcost optimization and risk mitigation. Excluding strategic stock, our fiscal Q1 ending inventory days would
be approximately 142 days, only 22 days higher than our target inventory level.
Total Cash/Debt
On the balance sheet, we held $9.8 billion of cash and investments at quarter end and maintained $12.3
billion of liquidity when including our untapped credit facility. We ended the quarter with $13.5 billion in
total debt, low net leverage and a weighted average maturity on our debt of 2030.
OutlookNow turning to our outlook for the fiscal second quarter.
While we remain mindful of macroeconomic risks, the memory and storage market environment is
improving. We expect supply-demand balance to tighten in both DRAM and NAND throughout 2024. Ourleading-edge DRAM and NAND nodes are oversubscribed for the full year. Consequently, we expect
prices to increase through calendar 2024, driving improvements in our financial performance.
Our leading-edge inventory is very tight, and we are also working to minimize pull-in of customer
demand in response to higher pricing. As a result, our sequential growth in the near term will be driven
primarily by pricing rather than a sequential increase in bit shipments. Both DRAM and NAND bit
shipments are expected to decline somewhat in the fiscal second quarter.
We expect our fiscal Q2 gross margin to benefit from sequential price increases and reduced impact fromunderutilization. We project the balance of previously written-down inventories to clear in fiscal Q2.
We forecast operating expenses to decline in the fiscal second quarter on lower R&D program expenses
and an asset sale previously expected to occur in the first quarter. For the fiscal year, due to some higher
R&D expenses including what we saw in Q1 and higher short-term incentive compensation from an
improved outlook, we now project opex to be over $3.9 billion.

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Fiscal Q1 2024 Earnings Call Prepared Remarks

We forecast a much reduced operating loss in fiscal Q2 and project a return to operating income in Q3.
Our tax forecast for the year has increased from under $200 million to over $300 million based on an
updated taxable income outlook. We project the allocation of tax expense across the year to be heaviest
in the fourth quarter driven by profitability and other factors. As we’ve mentioned previously, at current
levels of profitability, tax estimates and the distribution of taxes across the year are highly sensitive tochanges in the outlook.
We plan fiscal Q2 capital expenditures to be in line with first quarter levels. We see operating cash flows
improving substantially in the second half of the fiscal year and are now forecasting positive free cash
flow in the fiscal fourth quarter.
Non-GAAP GuidanceWith all these factors in mind, our non-GAAP guidance for fiscal Q2 is as follows.
We expect revenue to be $5.3 billion, plus or minus $200 million; gross margin to be in the range of 13%,plus or minus 150 basis points; and operating expenses to be approximately $950 million, plus or minus$15 million. We expect tax expenses of approximately $45 million.
Based on a share count of approximately 1.1 billion shares, we expect a loss of $0.28 per share, plus orminus $0.07.
Closing
In closing, the industry environment is improving, and our financial outlook has strengthened for the fiscal
year and beyond. We will continue to take a disciplined approach to managing the business and remain
focused on optimizing price, driving productivity, and controlling capital spend. With high levels of
liquidity and low net leverage, we continue to operate from a position of balance sheet strength as we
forecast a return to profitability and positive free cash flow.
I will now turn it back over to Sanjay.

SANJAY MEHROTRA, PRESIDENT AND CHIEF EXECUTIVE OFFICER
Thank you, Mark.
Over the last year, our world-class technology, business and manufacturing teams ensured ongoingleadership in foundational memory technologies and the expansion of our industry-leading productportfolio. We are encouraged by the progress we have made on pricing, and we are on track to restore
profitability more commensurate with the great value our solutions provide to our customers.

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Fiscal Q1 2024 Earnings Call Prepared Remarks

We expect 2024 to be a year of recovery and can see the path towards a healthy supply-demandenvironment along with strong growth in critical new technologies like HBM3E. From the data center tothe edge, AI has emerged as a significant secular driver that will further bolster the industry towards
record revenue TAM in 2025 and drive growth for years to come. Micron’s broad and growing suite ofleading-edge products positions us well to capitalize on the immense opportunities ahead.
Thank you for joining us today. We will now open for questions.

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Dec. 20, 2023