Micron Technology Inc Post Q4 2025 Earnings Analyst Call Transcript

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

Question: Thomas O'Malley - Barclays Services Corp - Analyst : My first one is just on the state of industry of NAND. So over the last couple of weeks, you've heard a lot of reports about hyperscalers stepping in, you've heard about tightness, pricing increases. And if you look at your current quarter that you just reported, you had bit down in the quarter and then I've tried a couple of different ways here, tell me if I'm crazy, but it seems like you need to have bits down again in your guide to kind of get there, so largely driven by ASP. Is that the right way to think about the world right now? And like some of your peers are talking about some bit growth going into the back half. So is that something that you're going to look to ease up with potentially some capacity additions? Just anything that you can comment on to the state of the world right now?

Question: Thomas O'Malley - Barclays Services Corp - Analyst : Helpful. And then just as a quick follow-up. If I look at the CapEx guidance, you're saying kind of annualized Q1, you get to $18 billion. And I just want to make sure you're saying that's a net number, so obviously something higher in aggregate. And in your commentary in the slides, it seems like very little additional NAND spend and more on the DRAM side. So just on a very high level, I know you're not guiding specifically, should we be taking away from this that you're moving from $13 billion something to close to $20 billion something? And that incremental is largely a function of additional DRAM spend?

Question: Joseph Moore - Morgan Stanley - Analyst : Great. Sanjay, early on in the call, talked about taking market share in HBM in calendar '26, if I heard him right. But I know that would sort of happen mechanically because you got to your target share towards the end of this year so you would gain share. Can you just talk about what are your share gain aspirations in HBM, if any? Are you content with holding your DRAM share? Does that need to go higher?

Question: Joseph Moore - Morgan Stanley - Analyst : Okay. That's helpful. And then the gross margins in HBM, will that continue to be higher than sort of non-HBM DRAM? And if given that you're locked in through most of 2025 and DDR5 is moving up, is it possible that, that changes? Is that -- could that lock in actually hurt you if DDR5 prices rise faster?

Question: Jim Schneider - The Goldman Sachs Group, Inc. - Analyst : Two quick ones. One follow-up on Joe's question, which is just in general, given all the performance benefits you talked about relative to your position on the HBM4, would you expect your HBM4 share to be higher than it was for HBM3 in a sustainable way going forward?

Question: Jim Schneider - The Goldman Sachs Group, Inc. - Analyst : And then as a follow-up on the CapEx side, could you maybe give us some color on the split of WFE versus facility CapEx you saw in fiscal 25? And then whether we should expect any significant change in that mix heading into next year? LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. SEPTEMBER 23, 2025 / 10:00PM, MU.OQ - Q4 2025 Micron Technology Inc Post Earnings Analyst Call

Question: Jim Schneider - The Goldman Sachs Group, Inc. - Analyst : And any significant change in the facility piece of that for next year or so?

Question: Chris Danely - Citi - Analyst : Can you hear me okay?

Question: Chris Danely - Citi - Analyst : I've been having phone problems all day. So a quick clarification. As far as the DRAM revs go, you guys gave us the HBM breakout. Can we assume roughly the same ratio for DDR4 roughly high single digits and then the rest, DDR5? And any commentary on the relative contributions to incremental gross margin between, say, DDR5 and HBM?

Question: Chris Danely - Citi - Analyst : That's great. That's still super helpful. And then for my follow-up, question for Mark on gross margin. So Mark, remember, we had lunch earlier this year, and I asked you about could you guys get back to 50% gross margin? You said it's possible, who knows. It depends on a lot of things. It's going to be tough. And here we are. And now we're going past that. So can you just maybe talk about what changed or what was the key to that? And then what are the limiting factors on gross margin going forward? Is it just essentially a function of how many more quarters pricing keeps going up or is there something else going on as far as mix goes?

Question: Vijay Rakesh - Mizuho Securities Asia Ltd - Analyst : Just a quick question on the DRAM side. I know you mentioned 1-gamma is starting now. But if you look at your 1-beta, which is -- it looks like most of the HBM4 will be on 1-beta as well. Any thoughts on what the mix will be for you, 1-gamma versus 1-beta now versus exiting the year fiscal 26 per se?

Question: Vijay Rakesh - Mizuho Securities Asia Ltd - Analyst : Got it. And then on HBM4, given your higher speeds and lower, power I guess it die is bigger to your own logic die, would you expect the margins on HBM4 to be better versus HBM3, I guess, equal, high?

Question: Aaron Rakers - Wells Fargo Securities LLC - Analyst : I'll ask two as well. I guess kind of building on some of the prior questions. I'm curious, I know, Mark, you had talked about your ability to execute, I think it was high single-digit cost down with HBM in DRAM in fiscal 25, and then I think it was teens or something, low teens on LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. SEPTEMBER 23, 2025 / 10:00PM, MU.OQ - Q4 2025 Micron Technology Inc Post Earnings Analyst Call NAND. I'm curious if as we make these process node transitions as well as G9 and NAND, how do you think about the cost down curve as these process nodes materialize through this next fiscal year?

Question: Aaron Rakers - Wells Fargo Securities LLC - Analyst : Yes. Okay. And then I'm curious just like structurally, the NAND market. There's a lot of discussion around these high-cap enterprise SSDs pushing 250 terabytes and plus. As we look at that market, I'm curious how you guys see the average capacity trending on these AI servers for SSDs? And whether we should really be expecting that to inflect materially higher as we move through fiscal 26 and some of these high cap drives really hit through volume?

Question: Aaron Rakers - Wells Fargo Securities LLC - Analyst : Where do you think the average capacity is today per server? Just curious.

Question: Brian Chin - Stifel, Nicolaus & Company Inc - Analyst : I'll ask a few questions. Maybe I know there's a couple of questions on cost down or cost reduction. But I was just curious, you've obviously talked about in the past, HBM3E, some efficiencies you've gained as you've kind of moved into relative maturity from where you started. And I know you're not -- you don't want to provide too much detail around pricing in 2026 for 3E, while your tone does suggest you have -- you should have sufficient leverage, I guess, in terms of those negotiations. But I'm wondering, is there more efficiency in terms of improvement in assembly and packaging yields for 3E that maybe could also help you out a little bit in terms of margins, margin profile next year?

Question: Brian Chin - Stifel, Nicolaus & Company Inc - Analyst : Got it. And I appreciate that. Maybe a quick follow-up. I know there's been some discussion here about sort of your guys reattaining this 50% plus blended gross margin first time since 2017, 2018 time frame. I know you wouldn't recast or you can't recast cloud and core enterprise server revenue back that far. You did give us sort of the sequential and the year-over-year compare today. But those segments are roughly mid-50% of sales now. What roughly did they represent back then? Clearly, it must have been a much smaller proportion, and that's obviously a structural shift in business

Question: N. Quinn Bolton - Needham & Company LLC - Analyst : Mark, maybe I just missed your answer. I just want to clarify your answer to Aaron's question on the cost downs. You did low single digits in DRAM inclusive of HBM and low teens in NAND. Did you say that those are good ranges to think about in '26? Or did you not give a cost-down target for fiscal 26?

Question: N. Quinn Bolton - Needham & Company LLC - Analyst : Okay. And then, I guess, maybe just kind of a bigger picture question. As you look at the inferencing market, NVIDIA recently introduced their CPX GPU that uses GDDR7 instead of HBM memory and to the extent that, that architecture takes off, do you think that, that lower HBM content on inferencing platforms, would that have any impact on your broader outlook for the HBM market over the next few years? Or do you think that, that CPX architecture represents sort of only a small portion of the inference market?

Question: John Vinh - KeyBanc Capital Markets Inc - Analyst : I just had couple follow-ups. So first on HBM, Sanjay, on the call really went out of his way to kind of say, hey, we can support 2.8 terabytes per second and 11 gigabits per second. It seems like these performance specs are greater than the original JEDEC standards that were set. And it looks like customers are asking for more. I'm just curious why are customers increasing kind of the original specifications for HBM4 and then asking for higher performance? And then just a quick housekeeping question for Mark. Just looking at your guidance, given the midpoint of all the ranges that you provided, it looks like to get to $3.75 million in EPS, it implies that interest income is positive in the quarter. Is that the case of what's implied there?

Question: Kevin Cassidy - Rosenblatt Securities, Inc - Analyst : Yes. With the supply/demand going -- favoring the demand side, is there any discussions yet for long-term agreements with all of your clients or your customers?

Question: Kevin Cassidy - Rosenblatt Securities, Inc - Analyst : Yes. Understood. Maybe just a question on your decision to drop the managed NAND for the smartphone market. Is there a lower cost supplier out there, a new supplier that is taking that type of business?

Question: Kevin Cassidy - Rosenblatt Securities, Inc - Analyst : Okay. Great. If I'm allowed to ask one more on that. Just your smartphone customers didn't have a problem with that with but does it affect your DRAM sales to them?