Micron Technology Inc Q3 2024 Earnings Call Transcript

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

Question: Krish Sankar - TD Cowen - Analyst : Yeah, hi. Thanks for taking my question. I have two questions. Sanjay, the first one is on HBM. Clearly, you're gaining traction in HBM3E. I'm just curious how the HBM3E (technical difficulty) and how (technical difficulty) going beyond one customer. Last time, you've publicly said that you qualified NVIDIA H200. Kind of curious, how is it doing with the B100 for NVIDIA. And also along the same path, you confidently spoke about pulling in the timeframe for HBM goal versus the regular 18-month cadence for HBM technology transfer. So basically, I'm curious, Sanjay. Any color, HBM3E qual in different customers, timing on HBM [for in-house], and a quick follow-up.

Question: Krish Sankar - TD Cowen - Analyst : Got it. Thanks, Sanjay, for that. And a quick follow up. On NAND -- on the NAND demand, you mentioned that the bit growth demand, it goes within high teens. If I remember right, last quarter, you said it's going to be in the low 20s. So I'm curious, what was the delta (inaudible) last few months ago? Because there's a general view that AI should be helping NAND. So why is the NAND bit demand growth not going higher? It looks like it's going lower. Thank you.

Question: Krish Sankar - TD Cowen - Analyst : Got it. Thanks, Sanjay. Very helpful. Thank you.

Question: Vivek Arya - BofA Global Research - Analyst : Thanks for taking my question. Sanjay, you mentioned a 3x trade ratio of HBM to D5. What happens to the ratio as you go to higher stacks, 12-die or more? And on the other hand, what happens as you make yield improvements? Just overall, is 3x still the operative function for calendar 25? And just what are the puts and takes around this ratio?

Question: Vivek Arya - BofA Global Research - Analyst : Got it. And a quick follow-up maybe for Mark. So you're suggesting fiscal '25 is -- could be a record in terms of sales. Why can't it be a record in terms of gross margin? What are the puts and takes of gross margin as we go into next year? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 26, 2024 / 8:30PM, MU.OQ - Q3 2024 Micron Technology Inc Earnings Call So maybe give us some sense of what incremental margins can be, (inaudible) $5 billion or $10 billion year on year, just so we can level set our models on a gross margin perspective. Thank you.

Question: Vivek Arya - BofA Global Research - Analyst : Thank you.

Question: Toshiya Hari - Goldman Sachs Research - Analyst : Hi. Thank you so much for taking the question. I had two as well, the first one on HBM. I guess recently, there's been a couple of reports about you all having some yield issues. Based on your commentary, it didn't sound like you're having these issues, but just wanted to clarify that. If you could address that, that would be really helpful. And then on HBM, the second part is -- so gross margins are accretive to overall corporate margins today. What are your thoughts on the relative profitability going into the second half of the year and into calendar '25, particularly given the fact that you have pretty good visibility as it pertains to HBM pricing? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 26, 2024 / 8:30PM, MU.OQ - Q3 2024 Micron Technology Inc Earnings Call

Question: Toshiya Hari - Goldman Sachs Research - Analyst : Okay. Got it. That's helpful. And then my follow-up, maybe one for Mark on CapEx. You're guiding fiscal year '25 up materially, given some of the hints that you provided, maybe you're looking at a mid-teens $1-billion number for fiscal '25. I know more than half of that or half of that is coming from the greenfield investments in the US. But how should we be thinking about your bit supply growth in fiscal '25 or calendar '25? Do we [strategize] to grow more or less in line with the demand figure you have for DRAM and NAND, mid-teens high teens, respectively? Or do you expect to (inaudible) relative to those (inaudible) ranges in fiscal '25? Thank you.

Question: Toshiya Hari - Goldman Sachs Research - Analyst : Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 26, 2024 / 8:30PM, MU.OQ - Q3 2024 Micron Technology Inc Earnings Call

Question: Thomas O'Malley - Barclays - Analyst : Hey, guys. Thanks for taking my question. This is for Sanjay or Mark. So you've given us the fiscal year '25 company guide into several (inaudible) in HBM. Then you talked about the share that you're getting to is equivalent to that of DRAM. So you solve for that market, low-teens total HBM market. I just want to understand. What's your view of the suppliers to that market? As it stands today, it seems like there's really two major suppliers. When you look at the out year, do you think that number changes if there's additional qualifications? Would that number change if you were to have a third qualification, aka, the market be bigger? And how did you come up with that total market numbers, that bottoms-up accelerator, forecasts? But just kind of how you're thinking about the market. And did that change or is it contingent upon qualifications of some of your competitors?

Question: Thomas O'Malley - Barclays - Analyst : Super helpful. And then just switching gears over to the demand side of things. Obviously, you have a competitor out in the market talking about run-rate industry CapEx and talking about the change in industry architecture maybe not scaling as quickly or as capital intensively as you have in the past. You obviously you're talking about CapEx. A lot of your CapEx next year is going towards greenfield in HBM. Can you talk to the remainder of that CapEx? Could you give us any color on DRAM or NAND split between that? And then do you agree with -- there was Western Digital talking about capital intensity longer-term on the NAND side. Do you agree that maybe structurally, you'll see a lower investment threshold in the future to continue to maintain what the industry needs? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 26, 2024 / 8:30PM, MU.OQ - Q3 2024 Micron Technology Inc Earnings Call

Question: Christopher Danely - Citi - Analyst : Hey. Thanks, guys. So I think you mentioned you're signing up some customers to long-term contracts. Given your belief that pricing's going to keep drawn up, why sign people up to long-term contracts and potentially miss out on some of the increased pricing? Or is there some potential for wiggle room on pricing with the contracts that's more of a unit basis? Just curious there.

Question: Christopher Danely - Citi - Analyst : Great. Thanks, Sanjay. And then just a quick one for Mark. Mark, was the Taiwan quake impacted limited to the May quarter? Or is it impacting the third quarter as well? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 26, 2024 / 8:30PM, MU.OQ - Q3 2024 Micron Technology Inc Earnings Call

Question: Christopher Danely - Citi - Analyst : [Just me]. All right. Thanks.

Question: Harlan Sur - JPMorgan - Analyst : Good afternoon. Thanks for taking my question. Enterprise SSDs are seeing really strong demand pull from AI workflows, right? The team given significant share gains in enterprise SSD just over the past few quarters. I think in calendar Q1, Micron was the number three global share leader in enterprise SSD. I think it's now above 20%, 25% of the overall NAND business. I mean, this is a position that we've never seen Micron in before. So I think first question is, are enterprise SSD gross margins accretive to your overall NAND gross margins? And then secondly, I saw your question next-gent PCIE Gen 5 SSD demo at NVIDIA's GTC conference putting significant performance uplift on AI workloads versus your Gen 4 SSD. So are you qualifying these next-gen Gen 5 SSDs for AI applications? When do you expect to ship? Just wanted to understand the sustainability of your strong share position here.

Question: Harlan Sur - JPMorgan - Analyst : Perfect. Thank you very much, insightful.