Micron Technology Inc at Goldman Sachs Semiconductor Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Toshiya Hari - Goldman Sachs - Analyst : So Sumit, in terms of the near term, it's been 2.5 months since you have shared guidance for the May quarter. The industry is clearly in a positive stage of the cycle, both on the DRAM side and the NAND side. How has the quarter progressed relative to your expectations, and any standouts that you'd highlight?

Question: Toshiya Hari - Goldman Sachs - Analyst : That's great. Thank you so much for the overview. We'll definitely come back to AI, HBM enterprise storage later. But at a high level, I wanted to ask you about customer inventory levels. Last year was obviously a challenging year for you all and for the industry. Based on your customer conversations and market intelligence, where our customer inventory levels relative to what you would consider to be normal. And I know you don't have perfect visibility, but across end markets, where is customer inventory today?

Question: Toshiya Hari - Goldman Sachs - Analyst : That makes sense. One sort of last question before we dive into HBM topic of the day, week, and month. So long-term bit demand growth and how you guys think about that. It's been, I guess, probably two years since you hosted your Investor Day. Can you remind us how you're thinking about the through-cycle bit growth, outlook for both DRAM and NAND? How has it evolved over the past two years? I'm sure multiple moving parts for both DRAM and NAND. And what are the key contributors as you think about the through growth -- through-cycle growth profile?

Question: Toshiya Hari - Goldman Sachs - Analyst : Got it. So just transitioning to HBM, how are you thinking about the multiyear growth rate in HBM, specifically? And I think you might have mentioned this -- maybe we talked about this last night at the dinner. But percentage of bits go into HBM today, and how do you see that evolving over the next couple of years?

Question: Toshiya Hari - Goldman Sachs - Analyst : Understood. And then your competitive position within the context of the HBM market. I know in overall, DRAM grew at 20%-plus. In HBM, specifically, I think you're in the single digits today. And the reason for you guys being under-indexed as of today is that simply a function of past technology bets, or is there something structural to it? And I think you've talked about approaching 20%, 20%-plus sometime in calendar '25. What gives you that conviction that you'd go from single digits to 20%?

Question: Toshiya Hari - Goldman Sachs - Analyst : Understood. In terms of customer traction and customer mix going forward, I think you've publicly shared that your shipping H200 that Nvidia is ramping as we speak. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 30, 2024 / 12:20PM, MU.OQ - Micron Technology Inc at Goldman Sachs Semiconductor Conference As you look to grow your business to your point, from several hundred million dollars to multiple billions over the next 12, 18 months, what are your expectations in terms of customer mix? If you can describe customer engagements outside of the big GPU company, that would be helpful.

Question: Toshiya Hari - Goldman Sachs - Analyst : Great. HBM pricing and profitability longer term -- I know as of today, you and your peers get a nice premium on a price per bit basis in HBM vis a vis conventional DRAM. The fear that I think some investors have is over many years, HBM just becomes another DRAM SKU, and it's commoditized. How do you think about that? Does the foundry-like nature of the business and the complexity that comes with HBM production, does that enable you and the industry to maintain premium margins?

Question: Toshiya Hari - Goldman Sachs - Analyst : That's a great segue into my next question on LTAs. I think you guys have talked extensively about both volumes and pricing being pretty much locked in, if you will, for '24 and for the most part, into '25. The other question/pushback that I often get from investors is LTAs historically have been sort of a one-way commitment. You're committed to supply. Customers can flexibly push out, cancel, et cetera. How would you characterize the LTAs around HBM that are placed today vis a vis historical LTAs? How are they fundamentally different from past LTAs?

Question: Toshiya Hari - Goldman Sachs - Analyst : Great. Very clear. I'm going to pause here and see if we have any questions from the audience. Unidentified Participant Good morning. Could you talk a little bit more about HBM as it relates to not just data center, but longer-term potential presence in edge devices, AI phones, iPads, whatever that are driven by AI? Because I think there's a lot of conversation about that right now. But trying to get a better handle on how you guys are thinking about that sort of aperture over the next two to four years. Thanks.

Question: Toshiya Hari - Goldman Sachs - Analyst : I wanted to ask a question on the conventional DRAM side, the [non-usual], but that's still play an important role. In terms of server DRAM and the transition to DDR5, I think it's fair to say, relative to expectations, that perhaps you had -- 18 months ago, 24 months ago, it's been relatively slow. '23 was a challenging year for your partners on the CPU side. It feels like things have bottomed and, hopefully, there's a recovery coming. What are you seeing from a general-purpose server perspective and your DDR5 business?

Question: Toshiya Hari - Goldman Sachs - Analyst : Got it. In the last five minutes that we have, I wanted to pivot to the NAND of your portfolio. Earlier on the session, you talked about, on the DRAM side, the impact or the benefits from AI are clear. We see it in your HBM business, even in your conventional DRAM business as well. On the enterprise SSD side, 12 months ago, we really hadn't seen that inflection. It, finally, seems as though we're starting to see it. So from a demand perspective, what are your expectations in terms of enterprise SSD? You did -- done a great job in terms of gaining share there. So competitively, what are you seeing in the marketplace today?

Question: Toshiya Hari - Goldman Sachs - Analyst : Got it. And in just NAND broadly, given the current pricing trajectory and the margin trajectory, you're heading the direction. You're still relatively depressed vis a vis, I would think, internal aspirations, expectations. I think Sanjay in the past has said something along the lines of, we need industry consolidation for things to get better. Is that still the view, or do you think even with the current competitive setup, you can improve upon profit margins?

Question: Toshiya Hari - Goldman Sachs - Analyst : Okay, great. In the last 30 seconds, anything else that we should have asked, or anything you'd like to highlight before we close?

Question: Toshiya Hari - Goldman Sachs - Analyst : That's great. Thank you so much, and best of luck.