Micron Technology Inc Post Q1 2026 Earnings Analyst Call Transcript

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

Question: Aaron Rakers - Wells Fargo Securities LLC - Analyst : I guess my first question is, you know, Mark, you talked a lot about being constrained and unable to meet some of the demand out there. I know in the quarter you talked about kind of a slight increase in bit shipments of DRAM this quarter. I guess as part of that, did the non-HBM DRAM bids grow sequentially in this quarter? And how is your guide factored in between bits -- shipments between NAND and FLASH in this current quarter?

Question: Aaron Rakers - Wells Fargo Securities LLC - Analyst : Yeah, that's helpful, Mark. And as a real quick follow-up, As we look forward, I know you mentioned the 14-week period for fiscal 4Q, but how would you have us think about the OpEx trajectory from here over the next couple quarters?

Question: Vijay Rakesh - Mizuho Securities Co Ltd - Analyst : Great quarter. So just a quick question, Sumit, Mark, and Manish. On the -- when you look at the -- you know, DRAM pricing is up pretty nicely, 20% sequentially. And NAND was up pretty nicely too. I was just wondering when you look at the demand side, how do you decide to allocate capacity versus conventional DRAM versus HBM because it looks like conventional DRAM profitability is improving very significantly. So just wondering how that reasoning, how you look at that as you look to '26, '27. I have a follow up. LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. DECEMBER 17, 2025 / 11:00PM, MU.OQ - Q1 2026 Micron Technology Inc Post Earnings Analyst Call

Question: Vijay Rakesh - Mizuho Securities Co Ltd - Analyst : Got it. And then on the SSD side, you're seeing a very strong pickup with your QLC is in an SSD piece as you mentioned, 120 terabyte to 40 per terabyte. Is there a way to kind of look at what is the attach rate that you're seeing now with the SSDs on AI servers versus last year, especially as some of these inferencing vectors with reasoning and answer and all that starts to pick up. How do you see that the tax rate growing year on year?

Question: Vivek Arya - Bofa Merrill Lynch Asset Holdings Inc - Analyst : I actually have two questions. First, back on the gross margin, I think you are at 68%. Is there reasonable way to think about what can be the path forward? Like is it 70%? Is it 75%? I know you have not given a specific number. But Mark, is there way to logically think about where your margins can go in the cycle because this is well above the prior peak. So is there a certain business model you have in mind? And the reason I ask the question is because you have close to 70% gross margin, you're right, your customers, NVIDIA, AMD are also talking about very high gross margins or expanding gross margins for their business. So I'm just curious to know how you think conceptually about the path forward for your gross margins?

Question: Vivek Arya - Bofa Merrill Lynch Asset Holdings Inc - Analyst : And for my follow-up, every time the customer, right, whether it's NVIDIA, Broadcom or AMD, every time they report, they seem to be upsiding numbers for next year. So when you say you're sold out for HBM, does it mean that you don't have an ability to upside your production? Or does it mean that you're sold out based on the current level of forecast and you have kind of unit and ASP certainty around that? LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. DECEMBER 17, 2025 / 11:00PM, MU.OQ - Q1 2026 Micron Technology Inc Post Earnings Analyst Call I'm just trying to understand what scenarios let them continue to upside the numbers, unless it's just a share shift between you and your peers. Like if they continue to upside the numbers, can you help them do that? How much more flex is there in your production for HBM?

Question: Kevin Cassidy - Rosenblatt Securities Inc - Analyst : My question, along those lines, if you're saying the HBM4 yield is better than HBM3. What -- how does this work with the process node with the qualification time taking so much longer with HBM, does this change your cadence for process technology? Do they stay in production longer?

Question: Kevin Cassidy - Rosenblatt Securities Inc - Analyst : Yeah. My question was more on a bigger picture. Will 1 gamma get qualified for HBM4? Or will it always be 1 beta?

Question: Kevin Cassidy - Rosenblatt Securities Inc - Analyst : Okay. Maybe another question. Just how quickly can you change your wafer allocation from HBM to low power to high performance. I guess how far into the process technology -- process can you change what the final product is?

Question: Steven Fox - Fox Advisors LLC - Analyst : I just have one question. On the CapEx spending that you talked about on the call, are you giving any sort of sense for the breakdown between facilities, equipment, construction, all of that, say, from -- and how it might change between '26 and '27, that mix?

Question: James Schneider, Ph.D. - Goldman Sachs Group Inc - Analyst : First one would be just in terms of the capacity allocation question that came up earlier. Maybe to put it in a different way, can you maybe -- I know you're sort of a key supplier in many embedded and other kind of mission-critical applications, automotive and the like. Can you give us a sense about like a floor level -- a minimum floor level that some of those sort of legacy or embedded applications would reach or not below in terms of production kind of given your importance in that market? Or conversely, can you maybe talk a little bit about sort of what is the maximum level of data center capacity or data center exposure do you feel comfortable having? LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. DECEMBER 17, 2025 / 11:00PM, MU.OQ - Q1 2026 Micron Technology Inc Post Earnings Analyst Call

Question: James Schneider, Ph.D. - Goldman Sachs Group Inc - Analyst : And then just a quick clarification. Relative to the Hiroshima cleanroom expansion you referenced on the call, can you talk about when that kind of would turn into volume production capability?

Question: James Schneider, Ph.D. - Goldman Sachs Group Inc - Analyst : But not in 2026, to be fair.

Question: Joseph Moore - Morgan Stanley - Analyst : Along the same lines, you had talked about the PC market could be limited by DRAM availability. How do you make those kinds of allocation decisions? Is it kind of just the highest gross margin is the focus? And how do you make sure that the mid-tier PC companies kind of have enough that there customers when you need them down the road? Just how are you kind of thinking about balancing the allocation across these different markets?

Question: Joseph Moore - Morgan Stanley - Analyst : That's helpful. And then just my follow-up. You mentioned a few minutes ago paying down some debt. I mean it seems like you're going to generate a really large amount of cash here in the next few quarters if you view that gross margins continue to improve comes true. Just what are the priorities for that cash over time, just between dividend, buybacks or other uses of cash that you might think about?

Question: Tom O'Malley - Barclays Services Corp - Analyst : I just have one. Could you remind us, as a mix of your CapEx this year, how much was construction CapEx? Or if you haven't given that, were trends on a normalized basis?

Question: Tom O'Malley - Barclays Services Corp - Analyst : Yeah, just looking for the base.