Micron Technology, Inc.
Fiscal Q4 2021 Earnings Call Prepared Remarks

Farhan Ahmad, Vice President, Investor Relations
Thank you, and welcome to Micron Technology's fiscal fourth-quarter 2021 financial conference call. On
the call with me today are Sanjay Mehrotra, President and CEO, and Dave Zinsner, Chief Financial Officer.
Today’s call will be approximately 60 minutes in length. This call, including the audio and slides, is also
being webcast from our Investor Relations website at investors.micron.com. In addition, our website
contains the earnings press release, and the prepared remarks filed a short while ago. Today’s discussionof financial results will be presented on a non-GAAP financial basis unless otherwise specified. A
reconciliation of GAAP to non-GAAP financial measures may be found on our website. As a reminder, awebcast replay will be available on our website later today. We encourage you to monitor our website at
micron.com throughout the quarter for the most current information on the company, including
information on the various financial conferences that we will be attending. You can follow us on Twitter at
MicronTech. As a reminder, the matters we will be discussing today include forward-looking statements.
These forward-looking statements are subject to risks and uncertainties that may cause actual results todiffer materially from statements made today. We refer you to the documents we file with the SEC,
specifically 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 arereasonable, we cannot guarantee future results, levels of activity, performance, or achievements. We areunder no duty to update any of the forward-looking statements after today’s date to conform thesestatements to actual results.
I'll now turn the call over to Sanjay.
Sanjay Mehrotra, President and Chief Executive Officer
Thank you, Farhan.
Good afternoon.
Intro/FQ4 Highlights
We delivered outstanding results in fiscal Q4, achieving robust profitability and the second-highest
quarterly revenue in Micron's history. Strong execution drove healthy results across segments, including
record quarterly revenue in NAND as well as in our embedded business.
Fiscal 2021 was a year of many records for Micron. We achieved our highest-ever mobile revenue, driven
by all-time-high managed NAND revenue and multichip package (MCP) mix. Our embedded business had
a tremendous record-breaking year, with auto and industrial businesses both at substantial new highs.
And our Crucial-branded consumer business and overall QLC mix in NAND all hit records in fiscal 2021.

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Fiscal Q4 2021 Earnings Call Prepared Remarks

Through the year, we successfully navigated multiple obstacles brought on by the pandemic and reachedseveral key milestones. For the first time in Micron’s history, we established technology leadershipconcurrently in both DRAM and NAND. Micron’s 1α (1-alpha) DRAM and 176-layer NAND are theindustry’s most advanced nodes in high-volume production. And we further strengthened our productleadership by becoming first to introduce LP5X DRAM and uMCP5 managed NAND in mobile, and theindustry’s first functional safety-capable LP5 for automotive applications.
The secular demand for memory and storage, combined with Micron’s focused execution and our rocksolid balance sheet, positions us well to deliver strong financial performance and create significant
shareholder value in fiscal 2022 and beyond. Demonstrating our confidence in our business trajectory, we
initiated a quarterly dividend that we aim to grow over time.
Technology and Operations
Memory is at the leading edge of semiconductor manufacturing, and Micron has leadership in both
DRAM and NAND technology. This quarter, we reached mature yields in our ramp of 1α DRAM and
176-layer NAND 20% to 30% faster than prior nodes and delivered performance and feature
improvements that will help unleash customer innovation. We believe we are several quarters ahead of
the industry in deployment of these process technologies. Additionally, through deeper customer
collaboration, we have further accelerated the time to market for value-added solutions built using thesenodes. 1α and 1z DRAM nodes combined now represent the majority of our DRAM bit production driven
by strong growth of 1α production, and by the end of the calendar year, 176-layer NAND will make up the
majority of our NAND bit production.
Looking beyond 1α DRAM and 176-layer NAND, we are investing to sustain scaling in both technologies
for the next decade. Adding momentum to our years of R&D in extreme ultraviolet (EUV) lithography, we
recently took delivery of the industry’s latest EUV system, NXE 3600, at our Boise headquarters, where we
operate one of the world’s most advanced centers for semiconductor research and development. The
delivery of this tool is an important milestone toward our previously disclosed plan of implementing EUV
in high-volume manufacturing in the 2024 time frame. We expect that the integration of EUV with ourexisting multipatterning immersion lithography expertise will help us maintain DRAM technology
leadership for many years to come.
In addition to being a technology leader and an innovation partner, we are uniquely positioned as a
strategic supplier to our customers. Micron is the only U.S.-based memory company, and our strong
global manufacturing network provides us with a diversified source of supply, which has become
increasingly critical to ensure that we continue to deliver product reliably to our customers. The
advantages of this unique position have been proven throughout the past 18 months, as we havesuccessfully navigated the challenges of COVID-19 across our global manufacturing network while
maintaining continuity of supply to our customers.

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Fiscal Q4 2021 Earnings Call Prepared Remarks

End Markets
Now let us review our end markets. The demand for memory and storage has evolved dramatically fromthe PC-centric era. Today, demand for memory and storage is driven from diversified end markets that
extend from the data center to the intelligent edge and to a growing diversity of user devices. As a resultof growing memory and storage content per device, DRAM and NAND now account for an everincreasing portion of the bill of materials for our customers. DRAM and NAND total addressable market(TAM) share of the semiconductor industry has steadily grown over the last two decades from around
10% to approximately 30% today. The artificial intelligence (AI) and 5G revolution is only in its infancy, andas these secular growth drivers gain further traction, we expect new data-intensive applications tocontinue to fuel significant increases in DRAM and NAND TAM.
Data CenterIn the fiscal fourth quarter, data center revenue grew sequentially and year over year, fueled by seculardrivers in cloud demand and a resurgence of enterprise IT investment linked to improving economic
growth. Data center has become the largest market for memory and storage, driven by the rapid growth
in cloud. With our broadening portfolio of differentiated products across memory and storage, we are in astrong position to drive strong growth and profitability in this important segment. We have been engaged
on DDR5 from initial specification development and are well placed to support customer transitions to
DDR5-enabled platforms starting later this calendar year. We are also enhancing our NVMe SSD portfolio
and will soon introduce PCIe Gen4 data center SSDs with Micron-designed controllers and leveraging thefull benefit of vertical integration. These SSDs will strengthen our market position over the course of thecoming quarters and years in the fast-growing data center NVMe storage market.
PC
Work- and learn-from-anywhere trends are driving a second consecutive year of double-digit PC unit
sales growth in calendar 2021. In the fiscal fourth quarter, PC DRAM revenue was up significantly year
over year. We are making strong progress transitioning our PC DRAM to our 1α node, which represented
a meaningful portion of our FQ4 PC bit shipments. Client QLC SSD bit mix hit a new record and made up
the majority of our client SSD bit shipments in FQ4. Our QLC leadership enhances our bit supply capability
and product profitability. We also have continued momentum ramping 176-layer NAND products for the
PC market, and we qualified our 176-layer NAND-based Gen4 NVMe client SSDs with several PC OEMs
during the quarter.
Graphics
In graphics, revenue increased sequentially and year over year, driven by a continuation of last quarter’s
strong next-generation game console and graphics card shipments. Micron holds an excellent position in© 2021 Micron Technology, Inc.

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Fiscal Q4 2021 Earnings Call Prepared Remarks

the fast-growing graphics market, with a broad product portfolio featuring our proprietary GDDR6X
product line and deep partnerships with leading GPU suppliers.
MobileFQ4 mobile revenue increased more than 25% year over year, driven by continued unit sales and content
growth. We expect overall smartphone unit sales to grow this year, with sales of over 500 million 5G
mobile phones forecasted. These content-rich 5G phones feature more than 50% higher DRAM anddouble the NAND content than 4G phones. We expect 5G and AI to drive new innovation in applications
such as AI-optimized video capture and editing that will fuel DRAM and NAND content growth for years
to come. Our 1α LP4 16Gb design is now fully qualified and ramping at multiple OEMs, while our
176-layer NAND achieved its first UFS 3.1 qualifications at two OEMs. These wins demonstrate Micron’sleadership in the mobile market and our continued strength in managed NAND products, where MCP
sales surpassed $1 billion for the third straight quarter.
Auto & Industrial
We are continuing to see strong demand in our edge markets, which include automotive and industrial
IoT. We expect the automotive and industrial markets to be the fastest-growing memory and storage
markets over the next decade. As the No. 1 player in these markets, Micron is exceptionally well
positioned to benefit from these secular growth trends.
Our automotive business delivered a fourth consecutive record quarter, driven by continued recovery in
auto manufacturing and the growth of memory and storage content driven by in-vehicle infotainmentand driver-assistance applications.
Industrial IoT revenues also set records in the fiscal fourth quarter, benefiting from the continued growthof applications such as point-of-sale devices, factory automation and surveillance. We expect industrial
demand trends to accelerate further as 5G speeds the adoption of data-intensive applications powered byintelligent edge infrastructure. We are also seeing an acceleration in our consumer IoT business, driven by
rapid growth in devices such as VR headsets, smart exercise equipment and smart speakers.
Market Outlook
Turning to market outlook, calendar 2021 is shaping up to be a strong year. We expect calendar 2021
industry DRAM bit demand growth to be in the low 20% range and industry NAND bit demand growth to
be in the high 30% range.
Overall, our preliminary view is that calendar 2022 industry bit demand growth will be consistent withlong-term industry bit demand growth compound annual growth rates (CAGRs) — in the mid to high© 2021 Micron Technology, Inc.

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Fiscal Q4 2021 Earnings Call Prepared Remarks

teens for DRAM and approximately 30% for NAND. We anticipate underlying demand in calendar 2022 tobe led by increasing data center server deployments, 5G mobile shipments and continued strength inautomotive and industrial markets. Additionally, non-memory supply shortages that are constraining
customer builds across various end market segments and that are pushing out some demand should easethroughout 2022, supporting demand growth during the year. Given prudent industry capex and very lean
supplier inventories, we expect healthy industry supply-demand balance and robust profitability for both
DRAM and NAND in the year.
In the near term, our FQ1 bit shipments will decline modestly in both DRAM and NAND from very stronglevels in FQ4. Some PC customers are adjusting their memory and storage purchases due to shortages of
non-memory components that are needed to complete PC builds. We expect this adjustment at our PC
customers to be largely resolved in the coming months. We are also seeing constraints within our supply
chain for certain IC components, which will somewhat limit our bit shipments in the near term. Bit
shipment growth will resume in the second half of the fiscal year, and we are planning to deliver record
revenue with solid profitability in fiscal 22. Our CY22 bit shipment growth for DRAM and NAND will beinline with the industry. However, due to the strong shipments in FY21 and our below-normal current
inventory level, for FY22, our bit shipment growth for DRAM and NAND will somewhat lag the long-term
CAGRs.
In FY22, the continued ramp of 1α and 176-layer NAND should provide us with good front-end cost
reductions. Our efforts to increase supply chain resilience and provide business continuity to ourcustomers will cause headwinds to our assembly and packaging costs, consistent with the trend in theoverall industry. Overall, we expect annual cost per bit reductions to be competitive with the industry in
FY22 and over the long term.
Turning to capital expenditures. We expect FY22 capex in the range of $11 billion to $12 billion. The yearon-year increase in capex is driven by our continued 176-layer NAND transition, pilot line enablement for
next-generation NAND and DRAM, and continued infrastructure and prepayments to support the
introduction of EUV. FY22 DRAM equipment capex for manufacturing will decline from FY21, as we benefit
from the capital efficiency of our mature 1α node.
For FY22, our bit supply growth will be achieved through node transitions alone, as we are a few years
away from needing wafer start additions to keep up with the industry demand. We also expect to increase
FY22 R&D investment by approximately 15% from FY21 to deliver bold product and technology
innovations designed to fuel the data economy, as well as to expand our portfolio to capitalize on
opportunities such as high-bandwidth memory and Compute Express Link (CXL) solutions.
Our leadership portfolio, product quality, supply chain agility and deep customer relationships make us apreferred partner in many of our markets, and we are confident in our ability to continue to create longterm, sustained profitability and returns built on that leadership.

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Fiscal Q4 2021 Earnings Call Prepared Remarks

I will now turn it over to Dave.
Dave Zinsner, Senior Vice President and Chief Financial Officer
Thanks, Sanjay.
Opening
Micron delivered excellent FQ4 results highlighted by our second-highest quarterly revenue, strong grossand operating margins, and substantial positive free cash flow.
Revenue
Total FQ4 revenue was approximately $8.3 billion, up 11% quarter over quarter and up 37% year overyear. As a reminder, FQ4 of last year was a 14-week quarter and impacts our year-over-year comparisons.
FQ4 revenue growth was broad-based with solid demand and price increases in both DRAM and NAND.
Our robust growth in FQ4 contributed to strong performance in FY21 with revenue of $27.7 billion, which
was up 29% from the prior fiscal year.
DRAM
FQ4 DRAM revenue was $6.1 billion, representing 74% of total revenue. DRAM revenue increased 12%
sequentially and was up 39% year over year. Bit shipments increased in the lower single-digit percentage
sequentially, and average selling prices (ASPs) increased in the high single-digit percent range quarterover quarter.
For the fiscal year, DRAM revenue increased 38% year over year to $20 billion, representing 72% of total
fiscal year revenue.
NAND
FQ4 NAND revenue was approximately $2 billion, an all-time high and representing 24% of the total
revenue. NAND revenue increased 9% sequentially and was up 29% year over year. Bit shipments
increased by low single-digit percentages sequentially, while ASPs increased in the mid single-digit
percent range quarter over quarter.
For the fiscal year, we achieved a new company record for NAND revenue of $7 billion, an increase of 14%
year over year. NAND revenue represented 25% of our total fiscal year revenue.

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Fiscal Q4 2021 Earnings Call Prepared Remarks

Revenue by Business Unit
Now turning to our FQ4 revenue trends by business unit.
Revenue for the Compute and Networking Business Unit was $3.8 billion, up 15% sequentially and up 26%
year over year. Growth was led by the data center and graphics markets.
Revenue for the Mobile Business Unit was $1.9 billion, down 5% sequentially and up 29% year over year.
Mobile demand remained healthy in the quarter with continued momentum from the rollout of 5G. MBU
revenue for FY21 exceeded $7 billion and set a new record.
Revenue for the Storage Business Unit was $1.2 billion, up 19% from the prior quarter and up 32% year
over year. Data center SSDs had strong growth in the quarter driven by enterprise and cloud strength.
QLC shipments set a new record in the fiscal year, in terms of percentage of our NAND shipments.
Finally, the Embedded Business Unit generated record revenue of $1.4 billion, which was up 23%
sequentially and more than doubled year over year. We continue to experience strong demand across theautomotive and industrial markets. For the fiscal year, EBU revenue easily exceeded $4 billion, setting a
new revenue record.
Operating Results
Gross Margin
The consolidated gross margin for FQ4 was 47.9%, up 500 basis points from the prior quarter. Pricing
increases across DRAM and NAND as well as strong execution in our ongoing product portfoliotransformation drove margin expansion in the quarter.
Opex
Operating expenses in FQ4 were $891 million, on the lower end of the range we provided in last quarter’searnings call.
Operating Income
FQ4 operating income was $3.1 billion, resulting in an operating margin of 37%, up from 32% in FQ3 andup from 21% in the prior year.
FQ4 EBITDA (earnings before interest, taxes, depreciation, and amortization) was $4.7 billion, resulting in
an EBITDA margin of 57.1%, compared to 53.3% in the prior quarter and 47.4% in the prior year. For the© 2021 Micron Technology, Inc.

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Fiscal Q4 2021 Earnings Call Prepared Remarks

fiscal year, total EBITDA was $14 billion, up from $9 billion in the prior fiscal year, and represented 50.4%
of revenues.
Earnings Per Share
Non-GAAP earnings per share (EPS) in FQ4 were $2.42, up from $1.88 in FQ3 and up from $1.08 in the
year-ago quarter. EPS included approximately $0.02 of gains from investments in our venture arm, Micron
Ventures.
For the fiscal year, total EPS was $6.06, up more than 100% from the $2.83 achieved in the prior fiscal year.
Operating Cash Flow
Turning to cash flows and capital spending, we generated $3.9 billion in cash from operations in FQ4,
representing 47% of revenue. For the fiscal year, cash from operations totaled $12.5 billion, up from $8.3
billion in the prior fiscal year.
Capital Allocation
Net capital spending was $2 billion during the quarter and $9.7 billion in FY21.
We generated positive free cash flow of $1.9 billion in FQ4 and over $2.8 billion for the fiscal year. The
increased cash flow was driven by strong revenue growth, increased profitability and efficient working
capital management.
As Sanjay mentioned, we expect our FY22 capital spending to be between $11 billion and $12 billion. Like
FY21, we expect our capital spending to be weighted more to the first half of the fiscal year, which will
constrain free cash flow in FQ1 and FQ2. We do expect to generate healthy free cash flow in FY22 but
weighted toward the back-half of the year. We also expect to close our Lehi fab sale within FQ1, and wewill receive approximately $900 million in proceeds from the sale.
We completed share repurchases of $1.1 billion, or approximately 13.9 million shares, in FQ4. For the fiscal
year, we repurchased $1.2 billion or approximately 15.6 million shares.
From FY17 to FY21, we generated over $20 billion of free cash flow. During this period, we usedapproximately $5 billion of that cash flow to retire debt and $7 billion toward buying back stock andeliminating the dilution from convertible debt, reducing our share count by 148 million shares. We also
improved our total cash and investment position by $5.5 billion. We expect that we will continue togenerate strong free cash flow in the future, and as we discussed on our capital return strategy call inearly August, we are committed to returning more than 50% of cross-cycle free cash flow to shareholders
through a combination of buybacks and a quarterly dividend that we expect we can grow over time. The© 2021 Micron Technology, Inc.

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Fiscal Q4 2021 Earnings Call Prepared Remarks

first dividend payment of $0.10 per share will be paid on Oct. 18 to shareholders of record as of Oct. 1.
The initiation of a dividend is an important milestone that reflects the structural transformation Micron
has undergone over the last several years, and it shows our confidence in the sustainability of our cash
flow generation.
Inventory
Our ending FQ4 inventory was $4.5 billion and average days for the quarter were 94 days, below ournormal range of 95 to 105 days. FQ4 finished-goods dollar inventory ended at the lowest level since the
Elpida acquisition in 2013.
Total Cash/Debt
We ended the fiscal year with $10.5 billion of total cash and investments and $13 billion of total liquidity.
Our FQ4 total debt was $6.8 billion.
OutlookNow turning to our outlook. End demand across our major markets remains strong. As Sanjay mentioned,
our bit shipments are expected to decline modestly in FQ1, as we normalize our inventory position andwork with PC customers as they manage through their supply chain challenges. And, on the gross marginside, our outlook is similar to how we viewed FQ4. While we will benefit from our node transitions on both
DRAM and NAND, we will continue to see near-term headwinds from COVID-related expenses inassembly and packaging. As a result, we expect the gross margins in FQ1 to be largely a function of themix.
Non-GAAP GuidanceWith all these factors in mind, our non-GAAP guidance for FQ1 is as follows. We expect revenue to be$7.65 billion, plus or minus $200 million; gross margin to be in the range of 47% plus or minus 100 basis
points; and operating expenses to be approximately $915 million, plus or minus $25 million. Excluding theimpact of any potential new tax legislation, we expect our non-GAAP tax rate to be approximately 10% for
FQ1. Based on a share count of approximately 1.14 billion fully diluted shares, we expect EPS to be $2.10,
plus or minus $0.10.
Closing
In closing, fiscal 2021 was a year of considerable growth and success for Micron. Looking at four-year
average metrics reveals the sustained cross-cycle performance of our business. Over the last four years,
our gross margins have exceeded 40% and our operating cash flow margins have been approximately
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Fiscal Q4 2021 Earnings Call Prepared Remarks

significant positive free cash flow while making substantial investments to grow our business. Our
technology, product and financial position provide strong momentum as we enter the new fiscal year.
I will now turn it back to Sanjay.
Sanjay Mehrotra, President and Chief Executive Officer
Thank you, Dave.
I would like to share a recent accomplishment that makes me especially proud of our company. Ourstrong Micron culture has played a significant role in driving our results aligned to our broader vision totransform how the world uses information to enrich life for all. Our company culture, community
leadership and business performance are being recognized globally, earning multiple industry awards andrecognitions this year. This month, we were ranked by Fortune as one of the top 20 best places to work in
manufacturing and production, the only semiconductor company to earn this recognition.
Fiscal 21 was an excellent year for Micron. As our fourth-quarter results clearly demonstrate, we aredelivering strong financial results. We are planning to deliver record revenues and solid profitability in
FY22. Demand for memory and storage is solid across market segments. Industry trends like the broad
integration of artificial intelligence into all computing, proliferation of the intelligent edge, continued data
center growth, and deployments of 5G networks create new and expanding opportunities for Micron. The
importance of semiconductors to these markets is underscored by government initiatives to invest in
domestic semiconductor production, both here in the U.S. through the CHIPS Act and in other countries
around the world.
We are focused on building our technology leadership to deliver bold new solutions that offer uniquevalue to our customers. Our business is robust, and we are energized to seize the opportunities ahead ofus, at a truly exciting time in the semiconductor industry.
We will now open for questions.

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