Micron Technology Inc at RBC Capital Markets Global Technology, Internet, Media & Telecommunications Conference Summary

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

Question: Srini Pajjuri - RBC Capital Markets Inc - Analyst : Great. Thanks for those comments, Mark and Scott. Scott, definitely, I do have some questions for you on the technology side. But I'm going to start off with what Mark just -- Mark's update just now. So I guess this is what, tenth quarter of the up cycle in DRAM, Mark. Historically, these cycles have lasted anywhere from 8 to 10 quarters. So I guess for an average memory investor, this looks like we are closer to the peak. But based on what you just said, you seem to have visibility that the industry tightness will probably continue through all of next year, which I think makes sense given how strong the GenAI has been. So talk to us about when you talk about allocations, especially customers asking for longer-term contracts, especially on the commodity DRAM side. So how are you approaching your allocation? And when you talk about longer-term contracts on the DDR side, are customers willing to commit to both volume and pricing? Or are we just talking volume commitments here?

Question: Srini Pajjuri - RBC Capital Markets Inc - Analyst : Got it. And then your comment about customers asking for multiyear contracts. Are you seeing that across all end markets? Or is it specific to data center where the demand seems the strongest?

Question: Srini Pajjuri - RBC Capital Markets Inc - Analyst : Okay. Got it. And then, Mark, any time pricing gets to these levels, we hear concerns about, especially in the consumer markets, the bill of materials, the de-specing, -- are you seeing any of that, any of the behavior from customers as to, okay, I have 12 gig in my phone, either I have to raise prices or going to scale back on the memory content. Do you see that -- I mean, historically, have you seen that in terms of de-specing? Or do you think it's something we should expect in this cycle given how strong the pricing is?

Question: Srini Pajjuri - RBC Capital Markets Inc - Analyst : Got it. Got it. And then the other question we get this time in the cycle is about peak margins. If I look at what you reported last quarter, what you guided to 51.5% gross margins, I think back in 2018 cycle, you peaked at like 60% plus. So again, it's difficult to compare cycle to cycle. But given that HBM is a bigger portion of your mix, I mean, it was 0 essentially in 2018, is there any reason artificially for us to think that margins can't go back to that previous peaks? We would -- I would argue that they should actually be better because of the HBM mix. So how should we think about as we -- given the tightness comments that you made?

Question: Srini Pajjuri - RBC Capital Markets Inc - Analyst : That's great. Then switching gears to HBM, and we know that the demand is very strong, and you just told us you're pretty much sold out for next year. But there has been this persistent debate about your road map, Scott, you talked about you're having a very strong product portfolio. So maybe help us understand in HBM3E, you said you had a product leadership. Do you see that leadership, whether it's performance power -- I mean, transferring into HBM4 as well as you look out to the road map? And then maybe for Mark, as we look out to the HBM shipments over the next, I guess, year or so, when should we expect the crossover to happen between HBM4 and HBM3? And do you think Micron will follow the -- whenever the industry crossover happens, should we expect Micron to all kind of pretty much follow that same time line?

Question: Srini Pajjuri - RBC Capital Markets Inc - Analyst : Yes. There seems to be this concern that because you're doing your base die in-house. You're not using TSMC at least for this generation or because you're still on 1-beta that somehow, for some reason, you have a disadvantage. So how do you kind of answer -- address those concerns? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 19, 2025 / 1:00PM, MU.OQ - Micron Technology Inc at RBC Capital Markets Global Technology, Internet, Media & Telecommunications Conference

Question: Srini Pajjuri - RBC Capital Markets Inc - Analyst : Yes. That's, I think, a very detailed answer. So I just want to go back to Mark. Given your comment that you're sold out for next year and that also includes HBM4, should we assume that all the qualifications are done and we're ready to ship soon? Is that what, I guess, your comments suggest or qualifications still need to be, I guess, completed?

Question: Srini Pajjuri - RBC Capital Markets Inc - Analyst : Great. And then going back to my previous question about when do you anticipate, I guess, that industry crossover from HBM4 crossing over from 3E. And then when it crosses over, do you think there's still going to be some demand for 3E or is this something, I guess, just like what we saw with HBM3 today? How do you see that playing out?

Question: Srini Pajjuri - RBC Capital Markets Inc - Analyst : Sure, sure. And then last quarter, you kind of -- you've been gaining share for the last several quarters, and I think you pretty much got to your target, which is your DRAM share. And as we look forward, it looks like potentially there's opportunity for you to even pick up more share. I don't know if you have the capacity or supply. So how do you think about market share as we look out to the next, I guess, several quarters? And also, do you anticipate your HBM4 market share to be somewhat similar to what you had in 3? Or do you see opportunity to even improve on that? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 19, 2025 / 1:00PM, MU.OQ - Micron Technology Inc at RBC Capital Markets Global Technology, Internet, Media & Telecommunications Conference

Question: Srini Pajjuri - RBC Capital Markets Inc - Analyst : Got it. Got it. And then in terms of the profitability itself, it's been a great product for you, HBM. But you've been improving that cost structure and your margin structure also, I think just based on what you reported in your segment gross margins, we could see that there's consistent improvement in gross margins as well. As we go to HBM4, do you expect the profitability to be at this level? Or do you see that maybe getting even better? Or because it's early ramps, are there any, I guess, issues that we need to be aware of in early days as we ramp this new product?

Question: Srini Pajjuri - RBC Capital Markets Inc - Analyst : Maybe, Scott, you can talk about what drives that cost increase as we go from HBM3 to 4? What are some of the components?

Question: Srini Pajjuri - RBC Capital Markets Inc - Analyst : Got it. And you expect that to continue as we go into HBM4E as well, I guess?

Question: Srini Pajjuri - RBC Capital Markets Inc - Analyst : Right. Got it. Got it. So Scott, I want to switch gears a little bit to the content side of the HBM story. I mean NVIDIA gives us pretty good visibility into their road map. So we know what to expect from a content per GPU standpoint. And AMD also just recently gave us some additional details. But at the same time, as Gen AI workloads evolve from pretraining into, I guess, inferencing, and we hear new terminology like RAG and vector databases, et cetera. So I'm just curious, there seems to be a lot of interest for low-power DRAM outside of HBM as well. And in your cloud business, I think HBM is roughly half of what you reported and the remaining is probably low power and some other high-capacity DIMM revenue as well. So talk to us about how do you see that playing out as inferencing becomes a bigger and bigger portion of the workloads? Are we seeing, I guess, a new class of memory that we need? Or I just love to hear your thoughts on that.

Question: Srini Pajjuri - RBC Capital Markets Inc - Analyst : Right. Actually, that's a great segue to my next question, Mark. So if you look at the SSD market, you have done quite well in this market. But not too long ago, we were talking about excess inventory in this market. And suddenly, demand has picked up quite a bit. It looks like there are a couple of debates. One is that the AI evolution of the workloads is what's driving this demand. And then the other argument is that, it's not necessarily because of AI, but it's because cyclical reasons and also the tightness on the HDD side. So I'd love to hear your thoughts on what do you think is driving the near-term demand and how sustainable this is?

Question: Srini Pajjuri - RBC Capital Markets Inc - Analyst : Got it. We have a few more minutes left. I want to see if there are any questions from the audience. We have a couple of mics.

Question: Srini Pajjuri - RBC Capital Markets Inc - Analyst : So maybe a couple more questions, one for Scott. Scott, you kind of mentioned Moore's Law and potential 3D structures as we look out to the next few years. How do you see -- I mean, I guess, how much runway do you think does DRAM industry has in terms of kind of using the 2D structures? When do you think we need to kind of consider going to 3D structures? And then as we go through this transition, do you think it's going to be somewhat similar to what we saw with the NAND industry? Or is it going to be different? And also maybe and potentially you can comment on the impact on capital intensity as we go through the transition.

Question: Srini Pajjuri - RBC Capital Markets Inc - Analyst : Got it. And then Mark, on capital intensity, should we anticipate any changes as we go from, I guess, 2D to 3D?

Question: Srini Pajjuri - RBC Capital Markets Inc - Analyst : Makes sense. And then this is going to be my last question for both of you. You are at the forefront of enabling GenAI. I'm sure you're also implementing internally within your company. And so I just want to hear your thoughts on what you're doing at Micron as far as AI is concerned. What sort of productivity improvements are you seeing and general views on AI at the enterprise level?

Question: Srini Pajjuri - RBC Capital Markets Inc - Analyst : Great. Thank you, Mark. Thank you, Scott. That's all the time we have. Thanks, everyone, for joining.