Q4 2024 Micron Technology Inc Earnings Call

September 25, 2024

Operator: Thank you for standing by and welcome to Micron's fourth quarter 2024 financial call. This time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you'll need to press star 1 1 on your telephone. If your question has been answered and you'd like to remove yourself from the queue, simply press star 1 1 again. As a reminder, today's program is being recorded. And now I'd like to introduce your host for today's program, Satya Kumar, Investor Relations. Please go ahead, sir.

[inaudible]

Speaker Change: Thank you for standing by and welcome to Micron's 4th quarter 2020 4th financial call at this time all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you'll need to press star 1-1 on your telephone. If your question has been answered, and you'd like to remove yourself from the queue, simply press star 1-1 again. As a reminder, today's program is being recorded.

Satya Kumar: and now I'd like to introduce your host for today's program Satya Kumar, Investor Relations. Please go ahead, sir. Thank you and welcome to Micron Technologies, fiscal fourth quarter, 2022, financial conference call.

Satya Kumar: Thank you and welcome to Micron Technology's fiscal fourth quarter 2024 financial conference call. On the call with me today are Sanjay Mehrotra, our President and CEO, and Mark Murphy, our CFO. Today's call is being webcast from our Investor Relations site at investors.micron.com, including audio and slides. In addition, the press release detailing our quarterly results has been posted on the website along with the prepared remarks for this call. Today's discussion of financial results is presented on a non-GAAP financial basis. Unless otherwise specified, a reconciliation of GAAP to non-GAAP financial measures can be found on our website. We encourage you to visit our website at micron.com throughout the quarter for the most current information on the company, including information on financial conferences that we may be attending. You can also follow us on X at MicronTech.

Speaker Change: On the call with me today, Harsh Sanjay Mehrotra, President and CEO, and Mark Murphy, Sr4. Today's call is being webcast from our investor relations site at investors.icon.com, including audio and slides.

Speaker Change: In addition, the press release detailing our quarterly results has been posted on the website, along with the prepared remarks for this call.

Speaker Change: Today's discussion of financial results is presented on a non-gap financial basis, unless otherwise specified. The reconciliation of gapped, non-gap financial measures can be found on our website.

Speaker Change: We encourage you to visit our website at micron.com throughout the quarter for the most current information on the company, including information on financial conferences that we may be attending.

Satya Kumar: As a reminder, the matters we are discussing today include forward-looking statements regarding market demand and supply, market and pricing trends and drivers, the impact of developing technologies such as AI product ramp plans and market position, expected capabilities of our future products, our expected results and guidance, and other matters. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from statements made today. We refer you to the documents we filed with the SEC, including our Form 10-K, Form 10-Q, and other reports and filings for a discussion of risks that may affect our future results. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements.

As a reminder, the matters we are discussing today include forward-looking statements regarding market demand and supply, market and pricing trends and drivers, the impact of developing technologies such as AI product ramp plans and market position, expected capabilities of our future products, our expected results and guidance, and other matters. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from statements made today. We refer you to the documents we filed with the SEC, including our Form 10-K, Form 10-Q, and other reports and filings for a discussion of risks that may affect our future results. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements.

Speaker Change: You can also follow us on X at my contact.

Speaker Change: As a reminder, the matters we are discussing today include forward-looking statements regarding market demand and supply, market and pricing trends and drivers, the impact of developing technologies such as AI, product ramp plans and market position, expected capabilities of our future products.

Speaker Change: Our expected results in guidance and other matters.

Speaker Change: These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from statements made today.

Speaker Change: We refer you to the documents we've filed with the SEC, including our form 10K, Form 10Q and other reports and filings for a discussion of risks that may affect our future results.

Speaker Change: Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.

Satya Kumar: We are under no duty to update any of the forward-looking statements to conform these statements to actual results. I'll now turn the call over to Sanjay.

We are under no duty to update any of the forward-looking statements to conform these statements to actual results. I'll now turn the call over to Sanjay.

Speaker Change: We are under no duty to update any of the forward-looking statements to conform these statements to actual results.

Sanjay Mehrotra: Thank you Satya. Good afternoon everyone. Micron delivered a strong finish to fiscal year 2024 with fiscal Q4 revenue at the high end of our guidance range and gross margins, and EPS above the high end of our guidance ranges. In fiscal Q4 we achieved record high revenues in NAND, and in our storage business unit. Micron's fiscal 2024 revenue grew over 60%. We expanded company gross margins by over 30 percentage points and achieved revenue records in data center, and in automotive. I'm thankful to all our Micron team members for their focus and execution, which made these results possible. We are entering fiscal 2025 with the strongest competitive positioning in Micron's history. We have leadership 1-beta DRAM and G8 and G9 NAND process technology and leadership products across our end markets.

Speaker Change: and now turn the call over to Sanjay.

Sanjay: Thank you, Satya. Good afternoon everyone.

Sanjay: Microsoft delivered a strong finish to fiscal year 2024, with fiscal Q4-11U at the high end of our guidance range and growth margins in EPS above the high end of our guidance range is.

Sanjay: In fiscal Q4, we achieved record high revenues in demand and in our storage business unit.

Micron: Micron fiscal 2024 revenue grew over 60 percent. We expanded company gross margins by over 30 percentage points and achieved 7 new records in data center and in automotive.

Micron: And thanks for all our mics on team members for their focus and execution which made these results possible.

Micron: We are entering fiscal 2025 with the strongest competitive positioning in micro-ins history.

Micron: We are Leadership 1 Beta D-Lam and G8 and G9, Man's Process Technology and Leadership Products across our end markets.

Sanjay Mehrotra: Robust data center demand is exceeding our leading-edge node supply and is driving overall healthy supply-demand dynamics. As we move through calendar 2025, we expect a broadening of demand drivers complementing strong demand in the data center. We are making investments to support AI-driven demand and our manufacturing network is well positioned to execute on these opportunities. We look forward to delivering a substantial revenue record with significantly improved profitability in fiscal 2025. Beginning with our guidance for record quarterly revenue in fiscal Q1, Micron is ramping production of the industry's most advanced technology nodes in both DRAM and NAND. Our 1-beta DRAM, G8, and G9 NAND nodes are ramping in high volume and will become an increasing portion of our mix through fiscal 2025. As a reminder, our G8 NAND node refers to our 232-layer NAND technology node.

Robust data center demand is exceeding our leading-edge node supply and is driving overall healthy supply-demand dynamics. As we move through calendar 2025, we expect a broadening of demand drivers complementing strong demand in the data center. We are making investments to support AI-driven demand and our manufacturing network is well positioned to execute on these opportunities. We look forward to delivering a substantial revenue record with significantly improved profitability in fiscal 2025. Beginning with our guidance for record quarterly revenue in fiscal Q1, Micron is ramping production of the industry's most advanced technology nodes in both DRAM and NAND. Our 1-beta DRAM, G8, and G9 NAND nodes are ramping in high volume and will become an increasing portion of our mix through fiscal 2025. As a reminder, our G8 NAND node refers to our 232-layer NAND technology node.

Micron: Robust Data Center demand is exceeding our leading edge node supply and is driving overall healthy supply demand dynamics.

Micron: As we move through 2021, we expect a broadening of demand drivers, complementing strong demand in the data center.

Micron: We are making investments to support AI-driven demand and our manufacturing network, as well positions to execute on these opportunities.

Micron: We look forward to delivering a substantial revenue record with significantly improved profitability in fiscal 2025. Beginning with our guidance for record quarterly revenue in fiscal Q1.

Micron: Micron is ramping production of the industry's most advanced technology nodes in both DRAM and NAND.

Micron: Our One Beta D-Ram and G-8 and G-9 NAND nodes are ramping high volume and will become an increasing portion of our mix through fiscal 2025.

Micron: As a reminder, our G8 man node refers to our 232 layer man's technology node.

Sanjay Mehrotra: Our 1-gamma DRAM pilot production using extreme ultraviolet lithography is progressing well, and we are on track for volume production in calendar 2025. We delivered fiscal 2024 DRAM front end cost reductions at the high end of the outlook provided at the beginning of the year, and NAND cost reductions were consistent with our forecast. We expect fiscal 2025 DRAM front end cost reductions excluding HVM to be in the mid to high single digit percentage range. We expect fiscal 2025 NAND cost reductions to be in the low to mid teens percentage range. We continue to make progress on the construction for our new fab in Idaho and are working with state and federal agencies on the permitting process for our New York site. Construction is underway on our India assembly and test facility as well as our China Xi'an backend expansion.

Our 1-gamma DRAM pilot production using extreme ultraviolet lithography is progressing well, and we are on track for volume production in calendar 2025. We delivered fiscal 2024 DRAM front end cost reductions at the high end of the outlook provided at the beginning of the year, and NAND cost reductions were consistent with our forecast. We expect fiscal 2025 DRAM front end cost reductions excluding HVM to be in the mid to high single digit percentage range. We expect fiscal 2025 NAND cost reductions to be in the low to mid teens percentage range. We continue to make progress on the construction for our new fab in Idaho and are working with state and federal agencies on the permitting process for our New York site. Construction is underway on our India assembly and test facility as well as our China Xi'an backend expansion.

Micron: Our one-gamer D-R-M-Polit production using extreme Valsa Violet lithography is progressing well and we are on track for volume production in calendar 2025

Micron: We delivered fiscal 2024, DM, front-end cost reductions at the high end of the outlook provided at the beginning of the year, and next cost reductions were consistent with our forecast.

Micron: We expect fiscal 2025 DRAM front-end cost reduction, excluding HVM to be in the mid to high single-digit percentage range.

Micron: We expect fiscal 2025 man's cost reduction to be in the low to mid-teens percentage range.

Micron: We continue to make progress on the construction for our new fab in Idaho and our working with state and federal agencies on the permitting process for our New York side.

Micron: Conception is underway on our India Assembly and Test facility, as well as our China Shion back in the expansion.

Sanjay Mehrotra: We are continuously assessing opportunities to manage our manufacturing footprint in a capital-efficient manner. Consistent with this strategy, we announced the acquisition of an LCD factory in Taiwan that will be converted to enable DRAM production testing. Micron's proprietary and vertically integrated testing capabilities provide competitive differentiation and enable us to provide high-quality products to our customers. Now, turning to our end markets. Memory is essential to extend the frontier of AI capability. Multiple vectors will drive AI memory demand over the coming years. Growing model sizes and input token requirements, multimodality, multi-agent solutions, continuous training, and the proliferation of inference workloads from cloud to the edge. Micron is focused on translating the opportunities from AI demand into value captured for all our stakeholders. Demand from data center customers continues to be strong, and customer inventory levels are healthy.

We are continuously assessing opportunities to manage our manufacturing footprint in a capital-efficient manner. Consistent with this strategy, we announced the acquisition of an LCD factory in Taiwan that will be converted to enable DRAM production testing. Micron's proprietary and vertically integrated testing capabilities provide competitive differentiation and enable us to provide high-quality products to our customers. Now, turning to our end markets. Memory is essential to extend the frontier of AI capability. Multiple vectors will drive AI memory demand over the coming years. Growing model sizes and input token requirements, multimodality, multi-agent solutions, continuous training, and the proliferation of inference workloads from cloud to the edge. Micron is focused on translating the opportunities from AI demand into value captured for all our stakeholders. Demand from data center customers continues to be strong, and customer inventory levels are healthy.

Micron: We are continuously assessing opportunities to manage our manufacturing footprint in a capital efficient manner.

Micron: Consisting with the strategy, we announce the acquisition of an LCD factory in 5 on, that will be converted to enable de-rem production testing.

Micron: Microsoft proprietary and vertically integrated testing capabilities provides competitive differentiation and enable us to provide high quality products to our customers.

Micron: Now turning to our end market.

Micron: Memory is essential to extend the frontier of AI capability.

Micron: Multiple vectors will drive AI memory demand over the coming years, growing model sizes and input token requirements, multi-modality, multi-agents solutions, continuous training and the proliferation of influence workloads from cloud to the edge.

Micron: Micron is focused on translating the opportunities from AI demand into value captured for all our stakeholders.

Micron: Demand from data center customers continue to be strong and customer inventory levels are healthy.

Sanjay Mehrotra: Industry server unit shipments are expected to grow in the mid- to high-single-digit percentage range in calendar 2024, driven by strong growth for AI servers as well as low-single-digit percentage range growth for traditional servers. We expect traditional server demand to benefit from a refresh cycle as a single latest generation traditional server can replace multiple older generation servers to provide valuable space, power, and performance improvements to improve data center efficiency. We see increasing DRAM and NAND content both in traditional as well as AI servers. Our mix of data center revenue reached a record level in fiscal 2024, and we expect will grow significantly from here in fiscal 2025. Micron is well positioned in the data center with our portfolio of HBM, high capacity D5 and LP5 solutions, and data center SSD products.

Industry server unit shipments are expected to grow in the mid- to high-single-digit percentage range in calendar 2024, driven by strong growth for AI servers as well as low-single-digit percentage range growth for traditional servers. We expect traditional server demand to benefit from a refresh cycle as a single latest generation traditional server can replace multiple older generation servers to provide valuable space, power, and performance improvements to improve data center efficiency. We see increasing DRAM and NAND content both in traditional as well as AI servers. Our mix of data center revenue reached a record level in fiscal 2024, and we expect will grow significantly from here in fiscal 2025. Micron is well positioned in the data center with our portfolio of HBM, high capacity D5 and LP5 solutions, and data center SSD products.

Speaker Change: Investing server unit shipman are expected to grow in the mid to high single digit, percentage range in calendar 2020-24. Living by strong growth for AI servers, as well as low single digit percentage range growth for traditional servers.

Speaker Change: We expect traditional server demands to benefit from a refreshed cycle as a single latest generation traditional server can replace multiple older generation servers to provide valuable space, power and performance improvements to improve data center efficiency.

Speaker Change: We see increasing DRAM and NAND content both in traditional as well as AI servers.

Speaker Change: Our makes of data center revenue reached a record level in fiscal 2024 and we expect will grow significantly from here in fiscal 2025.

Micron: Micron is well positioned in the data center with our portfolio of HPM, High capacity D5 and LP5 solutions, and data center SSD products.

Sanjay Mehrotra: We expect each of these three product categories to deliver multiple billions of dollars in revenue in fiscal 2025. In HBM, we are making excellent progress on our yield and output capability in fiscal Q4. We delivered on our expected volumes and achieved our objective of several hundred millions of dollars in revenue from HBM in fiscal year 2024. Even as our DRAM gross margins improved. Our fiscal Q4 HBM gross margins were accretive to both company and DRAM gross margins, indicative of our solid HBM yield ramp. We expect to achieve HBM market share commensurate with our overall DRAM market share sometime in calendar 2025. We expect the HBM TAM to grow from approximately $4 billion in calendar 2023 to over $25 billion in calendar 2025.

We expect each of these three product categories to deliver multiple billions of dollars in revenue in fiscal 2025. In HBM, we are making excellent progress on our yield and output capability in fiscal Q4. We delivered on our expected volumes and achieved our objective of several hundred millions of dollars in revenue from HBM in fiscal year 2024. Even as our DRAM gross margins improved. Our fiscal Q4 HBM gross margins were accretive to both company and DRAM gross margins, indicative of our solid HBM yield ramp. We expect to achieve HBM market share commensurate with our overall DRAM market share sometime in calendar 2025. We expect the HBM TAM to grow from approximately $4 billion in calendar 2023 to over $25 billion in calendar 2025.

Micron: We expect each of these three product categories to deliver multiple billions of dollars in revenue in fiscal 2025

Micron: In HVM, we are making excellent progress on our yield and output capability.

Micron: In fiscal Q4, we delivered on our expected volumes and achieved our objective of $700 million of dollars in revenue from HBM in fiscal year 2024.

Micron: Even as our D-DAM gross margins improved, our fiscal Q4HBM gross margins were excretive to both company and D-DAM gross margins, indicative of our solid HBM yield DAM.

Micron: We expect to achieve HTML Market Share, Commence Rate with our overall Deeram Market Share sometime in calendar 2025.

Micron: We expect the HMM to grow from approximately $4 billion in calendar 2023 to over $25 billion in calendar 2025.

Sanjay Mehrotra: As a percent of overall industry DRAM bits, we expect HBM to grow from 1.5% in calendar 2023 to around 6% in calendar 2025. We have a robust roadmap for HBM and are confident we will maintain our time to market, technology, and power efficiency leadership with HBM4 and HBM4E. During the quarter, Micron started shipments of production-capable HBM3E 12-high 36-gigabyte units to key industry partners to enable qualifications across the AI ecosystem. Remarkably, Micron's HBM3E 12-high 36-gigabyte delivers 20% lower power consumption than our competitors' HBM3E 8-high 24-gigabyte solutions while providing 50% higher DRAM capacity. We expect to ramp our HBM3E 12-high output in early calendar 2025 and increase the 12-high mix in our shipments throughout 2025. As we have said before, our HVM is sold out for calendar 2024 and 2025 with pricing already determined for this time frame.

As a percent of overall industry DRAM bits, we expect HBM to grow from 1.5% in calendar 2023 to around 6% in calendar 2025. We have a robust roadmap for HBM and are confident we will maintain our time to market, technology, and power efficiency leadership with HBM4 and HBM4E. During the quarter, Micron started shipments of production-capable HBM3E 12-high 36-gigabyte units to key industry partners to enable qualifications across the AI ecosystem. Remarkably, Micron's HBM3E 12-high 36-gigabyte delivers 20% lower power consumption than our competitors' HBM3E 8-high 24-gigabyte solutions while providing 50% higher DRAM capacity. We expect to ramp our HBM3E 12-high output in early calendar 2025 and increase the 12-high mix in our shipments throughout 2025. As we have said before, our HVM is sold out for calendar 2024 and 2025 with pricing already determined for this time frame.

Micron: As a percent of overall industry DRAMBES, we expect HVM to grow from 1.5% in calendar 2023 to around 6% in calendar 2025.

Micron: We have a robust roadmap for HBM and our confidence we will maintain our time to market, technology and power efficiency leadership with HBM-4 and HBM-4E.

Speaker Change: During the quarter, Microsoft started shipments of production capable HBM-3E, 12 high 36GB units to key industry partners to enable qualifications across the AI ecosystem.

Speaker Change: Demarcably, Microsoft HBN-3E-125-36GB delivers 20% lower power consumption than our competitors HBN-3E-8284GB solution.

Speaker Change: While providing 50% higher DM capacity.

Speaker Change: We expect to ramp our HM3E 12-high output in early calendar 2025 and increase the 12-high mix in our shipments throughout 2025.

Speaker Change: As we have said before, our HVM is sold out for calendar 2024 and 2025, with pricing already determined for this time frame.

Sanjay Mehrotra: In calendar 2025 and 2026 we will have a more diversified HBM revenue profile as we have won business across a broad range of HBM customers with our industry leading HBM3E solution. We see strong demand for our high capacity D5 and LP5 solutions. We are seeing increasing adoption of our high capacity monolithic die based 128 GB D5 DIMM products. We are leveraging our innovative industry leading LP5 solutions to pioneer the adoption of low power DRAM for servers in the data center. Micron's LP5 is specifically designed with data center and AI applications in mind offering unique features for enhanced reliability, availability, and serviceability or RAS in a server platform. We are focused on LPDDR design innovation to optimize the capacity, power, and system reliability requirements of AI server infrastructure.

In calendar 2025 and 2026 we will have a more diversified HBM revenue profile as we have won business across a broad range of HBM customers with our industry leading HBM3E solution. We see strong demand for our high capacity D5 and LP5 solutions. We are seeing increasing adoption of our high capacity monolithic die based 128 GB D5 DIMM products. We are leveraging our innovative industry leading LP5 solutions to pioneer the adoption of low power DRAM for servers in the data center. Micron's LP5 is specifically designed with data center and AI applications in mind offering unique features for enhanced reliability, availability, and serviceability or RAS in a server platform. We are focused on LPDDR design innovation to optimize the capacity, power, and system reliability requirements of AI server infrastructure.

Speaker Change: In calendar 2025 and 2020 6, we will have a more diversified HBM-11 you profile. As we have one business across a broad range of HBM customers, with our industry leading HBM-3E solution.

Speaker Change: We see strong demand for our high capacity V5 and LP5 solutions.

Speaker Change: We are seeing increasing adoption of our high capacity monodibase 128 GBD-5DM products.

Speaker Change: We are leveraging our innovative industry leading LP-5 solutions to pioneer the adoption of low power DM for servers in the data center.

Microsoft: Microsoft LP5 is specifically designed with data center and AI applications in mind, offering unique features for enhanced reliability, availability and serviceability for draft in a server platform.

Microsoft: We have focused on LPDDR design innovation to optimize the capacity, power and system reliability requirements of AI, server infrastructure.

Sanjay Mehrotra: Data center SSD demand continues to be driven by strong growth in AI as well as a recovery in traditional compute and storage. Our strategy to use greater levels of vertical integration including Micron design controllers and firmware has resulted in a data center SSD portfolio that addresses customer requirements for a robust set of features and functionality, competitive total cost of ownership, and industry-leading performance and quality. We have gained substantial share in data center SSDs as a result. We achieved a quarterly revenue record with over $1 billion in revenue in data center SSDs in fiscal Q4, and our fiscal 2024 data center SSD revenues more than tripled from a year ago.

Data center SSD demand continues to be driven by strong growth in AI as well as a recovery in traditional compute and storage. Our strategy to use greater levels of vertical integration including Micron design controllers and firmware has resulted in a data center SSD portfolio that addresses customer requirements for a robust set of features and functionality, competitive total cost of ownership, and industry-leading performance and quality. We have gained substantial share in data center SSDs as a result. We achieved a quarterly revenue record with over $1 billion in revenue in data center SSDs in fiscal Q4, and our fiscal 2024 data center SSD revenues more than tripled from a year ago.

Microsoft: Data Center FSD demands continues to be driven by strong growth in AI, as well as a recovery in traditional compute and storage.

Microsoft: Our strategy to use greater levels of vertical integration, including mics on design controllers and firmware, has resulted in a data center SSD portfolio that addresses customer requirements for the robust set of features and functionality.

Microsoft: Competitive Total Costs of Ownership and Industry Leading Performance and Quality.

Microsoft: We have gained substantial share in data center SSZ as a result.

Microsoft: We achieved the quarterly revenue record with over a billion dollars in revenue and data center DSLDs in fiscal Q4 and our fiscal 2020-24 data center DSLD revenue more than triples from a year ago.

Sanjay Mehrotra: Turning to PC, as discussed in our last earnings call, PC customers have built inventories due to the rising memory price trajectory, anticipated growth in AI PCs, as well as an expectation of tight supply caused by an increasing portion of production output being dedicated to meeting the growing data center demand. A sell-through of PCs continues at a steady pace with a seasonal increase in the second half of calendar 2024. We expect healthier inventories at PC OEMs by spring 2025. PC unit volumes remain on track to grow in the low single-digit range for calendar 2024. We expect unit growth to continue in 2025 and accelerate into the second half of calendar 2025 as the PC replacement cycle gathers momentum with the rollout of next-gen AI PCs, end of support for Windows 10, and the launch of Windows 12.

Turning to PC, as discussed in our last earnings call, PC customers have built inventories due to the rising memory price trajectory, anticipated growth in AI PCs, as well as an expectation of tight supply caused by an increasing portion of production output being dedicated to meeting the growing data center demand. A sell-through of PCs continues at a steady pace with a seasonal increase in the second half of calendar 2024. We expect healthier inventories at PC OEMs by spring 2025. PC unit volumes remain on track to grow in the low single-digit range for calendar 2024. We expect unit growth to continue in 2025 and accelerate into the second half of calendar 2025 as the PC replacement cycle gathers momentum with the rollout of next-gen AI PCs, end of support for Windows 10, and the launch of Windows 12.

Microsoft: Turning to PC.

Microsoft: As discussed in our last learnings call, PC customers have built inventories due to the rising memory price trajectory and dissipated growth in AI PC, as well as an expectation of tight supply.

Microsoft: caused by an increasing portion of production output being dedicated to meeting the growing data center demand.

Microsoft: Asselt Su of PC is continued at a steady pace with a seasonal increase in second half of calendar 2024. We expect healthier inventories at PC OEMs by Spring 2025.

Microsoft: PC unit volumes remain on track to grow in the low single digit range for calendar 2024.

Microsoft: We expect unit growth to continue in 2025 and accelerate into the second half of calendar 2025 as the PC replacement cycle gather momentum with the rollout of next gen AIPCs and of support for Windows 10 and the launch of Windows 12.

Sanjay Mehrotra: The PC market is in the early stages of a transformation, and we expect a significant shift towards AI-driven functionalities that promise to enhance user experiences and productivity. AI PCs require a higher capacity of memory and storage. As an example, leading PC OEMs have recently announced AI-enabled PCs with a minimum of 16 gigabytes of DRAM for the value segment and between 32 to 64 gigabytes for the mid and premium segments versus an average content across all PCs of around 12 gigabytes last year. Micron is well positioned to support the growth of AI PCs with our portfolio of client LPDDRAM, DRAM, and SSD products. Our low power compression attached memory module or LPCAM2 product has had multiple design wins at leading PC OEMs. These modules offer all the benefits of low power DRAM in an upgradable form factor.

The PC market is in the early stages of a transformation, and we expect a significant shift towards AI-driven functionalities that promise to enhance user experiences and productivity. AI PCs require a higher capacity of memory and storage. As an example, leading PC OEMs have recently announced AI-enabled PCs with a minimum of 16 gigabytes of DRAM for the value segment and between 32 to 64 gigabytes for the mid and premium segments versus an average content across all PCs of around 12 gigabytes last year. Micron is well positioned to support the growth of AI PCs with our portfolio of client LPDDRAM, DRAM, and SSD products. Our low power compression attached memory module or LPCAM2 product has had multiple design wins at leading PC OEMs. These modules offer all the benefits of low power DRAM in an upgradable form factor.

Microsoft: The PC market is in the early stages of a transformation and we expect a significant shift towards AI-driven functionalities that promise to enhance user experiences and productivity.

Microsoft: Air PC requires a higher capacity of memory and storage.

Speaker Change: As an example, leading TCOMs have recently announced AI-enable PCs with a minimum of 16 gigabytes of DRAM for the value segment.

Speaker Change: and between 32 to 64 gigabytes for the mid and premium segments, versus an average content across all PCs of around 12 gigabytes last year.

Micron: Micron is well positioned to support the growth of AI PCs, with our portfolio of clients, LP, DRAM, DRAM and SSD products.

Micron: Our low power compression attached, Memory Module, or LC Cam2, product has had multiple design grants at leading PCOEMs.

Micron: These modules offer all the benefits of low power DM in an upgradable form factor.

Sanjay Mehrotra: Compared to the alternative modular D5-based solutions, LPCAM2 provides up to 60% lower power and up to 70% better performance along with 60% space savings. Our 3500 Client SSD is qualified at all the major PC OEMs and provides the power performance enhancements needed for AI workloads. Turning to mobile smartphone customer inventory dynamics, they are evolving in a manner somewhat similar to that of PC customers. Smartphone unit volumes in calendar 2024 are on track to grow in the low- to mid-single-digit percentage range, and we expect unit growth to continue in 2025. Smartphone OEMs are seeking to differentiate their devices by incorporating more AI features such as personalized recommendations, improved camera functionalities, and smarter voice assistants. Recently, leading Android smartphone OEMs have announced AI-enabled smartphones with 12 to 16 gigabytes of DRAM versus an average of 8 gigabytes in flagship phones last year.

Compared to the alternative modular D5-based solutions, LPCAM2 provides up to 60% lower power and up to 70% better performance along with 60% space savings. Our 3500 Client SSD is qualified at all the major PC OEMs and provides the power performance enhancements needed for AI workloads. Turning to mobile smartphone customer inventory dynamics, they are evolving in a manner somewhat similar to that of PC customers. Smartphone unit volumes in calendar 2024 are on track to grow in the low- to mid-single-digit percentage range, and we expect unit growth to continue in 2025. Smartphone OEMs are seeking to differentiate their devices by incorporating more AI features such as personalized recommendations, improved camera functionalities, and smarter voice assistants. Recently, leading Android smartphone OEMs have announced AI-enabled smartphones with 12 to 16 gigabytes of DRAM versus an average of 8 gigabytes in flagship phones last year.

Micron: Compared to the alternative modular D5-based solutions, LPKM-2 provides up to 60% lower power and up to 70% better performance, along with 60% space savings.

Micron: Our 3500 client SSD is qualified at all the major PCOMs and provides the power performance enhancements needed for AI workloads.

Speaker Change: Turning to Mobile.

Speaker Change: Sot von Kasmajan Mithuri, Dananax, are evolving in a manner somewhat similar to that of PC customers.

Speaker Change: Smartphone Unit Volumes and Calendar 2024 are on track to grow in the low to mid-singal digit percentage range, and we expect unit growth to continue in 2025.

Speaker Change: Smartphone Williams are seeking to differentiate their devices by incorporating more AI features such as personalized recommendations, improved camera functionality and smarter voice assistance.

Speaker Change: Recently, leading Android smartphone OEMs have announced AI enabled smartphones, which 12 to 16GB of DRAM versus an average of 8GB in flagship phones last year.

Sanjay Mehrotra: Micron is well positioned to support the growth of AI smartphones with our leading edge memory and storage products. During the quarter we extended our product leadership with the first customer qualification of our second generation 1-beta based LP5X DRAM and second generation of G8 NAND UFS 4.0 products. In the automotive market, infotainment and ADAS are driving long term memory and storage content growth for the fourth consecutive year. Micron achieved a fiscal year record for automotive revenue in 2024. Micron has built an industry leading portfolio of automotive grade DRAM and NAND products that provide best in class solutions for these high growth applications. Leveraging our technology and product leadership, top quality rankings, and close customer collaborations.

Micron is well positioned to support the growth of AI smartphones with our leading edge memory and storage products. During the quarter we extended our product leadership with the first customer qualification of our second generation 1-beta based LP5X DRAM and second generation of G8 NAND UFS 4.0 products. In the automotive market, infotainment and ADAS are driving long term memory and storage content growth for the fourth consecutive year. Micron achieved a fiscal year record for automotive revenue in 2024. Micron has built an industry leading portfolio of automotive grade DRAM and NAND products that provide best in class solutions for these high growth applications. Leveraging our technology and product leadership, top quality rankings, and close customer collaborations.

Microsoft: Microsoft is well positioned to support the growth of AI smart phones with our leading age memory and storage quarters.

Speaker Change: During the quarter, we extended our product leadership with the first customer qualification of our second generation 1 beta based LP5 SDNAM and second generation of G8NAND UFS 4.0 products.

Speaker Change: In the automotive market, infotainment and ADF are driving long-term memory of storage content growth.

Speaker Change: For the Ford consecutive year, Microsoft achieved a fiscal year record for automotive revenue in 2024.

Makron: Makron has built an industry leading portfolio of automotive, great, DRAM and nan products that provide best in-class solutions for these high growth applications, leveraging our technology and product leadership, top quality rankings, and close customer collaborations.

Sanjay Mehrotra: During the quarter, we achieved qualification of our 1-beta based 16 gigabit LP5 with 9.6 Gb per second speed for the automotive market, which will support the increased performance requirements driven by AI both in the digital cockpit and ADAS. The automotive industry continues to adjust the mix of EV, hybrid, and traditional vehicles to meet evolving customer demand. As auto customer inventories adjust to this new mix, we expect a resumption in our automotive growth in the second half of fiscal 2025. Now turning to our market outlook, calendar 2024 DRAM industry demand outlook has improved driven by strength in data center servers, and growth in the other market segments have performed consistent with our prior market commentary. Hence, we have upgraded our expectation for calendar 2024 industry DRAM bit demand growth to now be in the high teens % range.

During the quarter, we achieved qualification of our 1-beta based 16 gigabit LP5 with 9.6 Gb per second speed for the automotive market, which will support the increased performance requirements driven by AI both in the digital cockpit and ADAS. The automotive industry continues to adjust the mix of EV, hybrid, and traditional vehicles to meet evolving customer demand. As auto customer inventories adjust to this new mix, we expect a resumption in our automotive growth in the second half of fiscal 2025. Now turning to our market outlook, calendar 2024 DRAM industry demand outlook has improved driven by strength in data center servers, and growth in the other market segments have performed consistent with our prior market commentary. Hence, we have upgraded our expectation for calendar 2024 industry DRAM bit demand growth to now be in the high teens % range.

Speaker Change: During the quarter, we achieved qualification of our one beta based 16 gigabit LP5 with 9.6 gigabit per second steep for the automotive market, which will support the increased performance requirements, driven by AI, both in the digital cockpit and ADF.

Speaker Change: The automotive industry continues to address the mix of EV, hybrid and traditional vehicles to meet evolving customer demands.

Speaker Change: As auto customer inventories adjusts to this new mix, we expect an exemption in our automotive growth in the second half of fiscal 2025.

Speaker Change: Now, turning to our market outlook.

Speaker Change: Kenanda 2024 DM industry demand outlook has improved, driven by strength in data centers servers and growth in the other market segments has performed consistent with our prior market commentary.

Speaker Change: Hence, we have upgraded our expectation for calendar 2024 in the 3D Ram Bits Devan Grow to now be in the high teams percentage range.

Sanjay Mehrotra: Our expectation for calendar 2024 industry NAND bit demand growth remains in the mid-teens percent range. In calendar 2025, we expect both DRAM and NAND industry bit demand growth to be around the mid-teens percent range. Turning to supply. Constructive industry conditions will help drive the considerable improvements in profitability and ROI that are needed to enable the investments required to support future growth due to CapEx and supply reduction actions taken across the industry in 2023. We expect industry wafer capacity in both DRAM and NAND in 2024 to be below 2022 peak levels, and for NAND meaningfully so. This factor, combined with the increasing mix of HBM wafers, is reducing DRAM supply allocated to traditional products and contributing to the healthy industry supply-demand environment that we expect for DRAM in calendar 2025.

Our expectation for calendar 2024 industry NAND bit demand growth remains in the mid-teens percent range. In calendar 2025, we expect both DRAM and NAND industry bit demand growth to be around the mid-teens percent range. Turning to supply. Constructive industry conditions will help drive the considerable improvements in profitability and ROI that are needed to enable the investments required to support future growth due to CapEx and supply reduction actions taken across the industry in 2023. We expect industry wafer capacity in both DRAM and NAND in 2024 to be below 2022 peak levels, and for NAND meaningfully so. This factor, combined with the increasing mix of HBM wafers, is reducing DRAM supply allocated to traditional products and contributing to the healthy industry supply-demand environment that we expect for DRAM in calendar 2025.

Speaker Change: Our Expectation for calendar 2024 in the Sri Nantwed Demand Growth remains in the Med Steen's Presentation.

Speaker Change: In calendar 2025, we expect both D-Lam and Nand industry-bets demand growth to be around the mid-teens percentage range.

Speaker Change: Turning to Supply.

Speaker Change: Constructive Industry conditions will help drive the considerable improvements in profitability and ROI that are needed to enable the investments required to support future growth.

Speaker Change: Due to capex and supply reduction action taken across industry in 2023, we expect industry wafer capacity in both DRAM and NANDs in 2024 to be below 2022 peak levels and for NANDs meaningfully so.

Speaker Change: This factor combines with the increasing mix of HVN vapors, is reducing denam supply allocated to traditional products and contributing to the healthy industry supply demand environment that we expect for DRAM in calendar 2025.

Sanjay Mehrotra: Given the significant reduction in industry wafer capacity in NAND and the ongoing low NAND CapEx environment, we also expect a healthy industry supply demand environment for NAND in calendar 2025. NAND technology transitions generally provide more growth in annualized bits per wafer compared to the NAND bit demand CAGR expectation of high teens. Consequently, we anticipate longer periods between industry technology transitions and moderating capital investment over time to align industry supply with demand. This can reduce both R&D expense growth and capital intensity in NAND over time, which can contribute to the improved financial health of the NAND industry. Micron invested $8.1 billion in CapEx in fiscal 2024. We expect fiscal 2025 CapEx to be meaningfully higher and at around mid-30s% range of revenue.

Given the significant reduction in industry wafer capacity in NAND and the ongoing low NAND CapEx environment, we also expect a healthy industry supply demand environment for NAND in calendar 2025. NAND technology transitions generally provide more growth in annualized bits per wafer compared to the NAND bit demand CAGR expectation of high teens. Consequently, we anticipate longer periods between industry technology transitions and moderating capital investment over time to align industry supply with demand. This can reduce both R&D expense growth and capital intensity in NAND over time, which can contribute to the improved financial health of the NAND industry. Micron invested $8.1 billion in CapEx in fiscal 2024. We expect fiscal 2025 CapEx to be meaningfully higher and at around mid-30s% range of revenue.

Speaker Change: Given the significant reduction in industry-based work capacity in manned, and the ongoing low-maning capex environment, we also expect a healthy industry-supply demand environment for manned in calendar 2025.

Speaker Change: Manish Technology Transitions generally provide more growth and analyze bits, per way for compared to the man's bit demand category expectation of heightings.

Speaker Change: Consequently, we anticipate longer periods between industry technology transitions and moderating capital investment over time to align industry supply with demand.

Speaker Change: This can reduce both are in the experience growth and capital intensity in manned over time which can contribute to the improved financial health of the land industry.

Microsoft: Microsoft invested $8.1 billion in CapX in fiscal 2020-24.

Speaker Change: We expect fiscal 2020-25 capex to be meanfully higher, and at around mid-30s, percentage range of living you based on our current capex and living you expectations.

Sanjay Mehrotra: Based on our current CapEx and revenue expectations, the growth in both greenfield fab construction and HBM CapEx investments is projected to make up the overwhelming majority of the year-over-year CapEx increase. As a reminder, our investments in facility and construction in Idaho and New York will support our long-term demand outlook for DRAM and will not contribute to bit supply in fiscal 2025 and 2026. Micron will continue to exercise supply and CapEx discipline and focus on improving profitability, including walking away from less profitable business while still maintaining our overall bit market share for DRAM and NAND. I will now turn it over to Mark for our financial results and outlook.

Based on our current CapEx and revenue expectations, the growth in both greenfield fab construction and HBM CapEx investments is projected to make up the overwhelming majority of the year-over-year CapEx increase. As a reminder, our investments in facility and construction in Idaho and New York will support our long-term demand outlook for DRAM and will not contribute to bit supply in fiscal 2025 and 2026. Micron will continue to exercise supply and CapEx discipline and focus on improving profitability, including walking away from less profitable business while still maintaining our overall bit market share for DRAM and NAND. I will now turn it over to Mark for our financial results and outlook.

Speaker Change: The growth in both Greenfield staff construction and HBM Kaffex investment.

Speaker Change: It's projected to make up the overwhelming majority of the year over year caffac increase.

Speaker Change: As a reminder, our investments in facility and construction in Idaho and New York will support our long-term demand outlook for DM and will not contribute to bit supply in fiscal 2025 and 2020.

Speaker Change: My friend will continue to exercise supply and cap extra discipline and focus on improving profitability, including walking away from less profitable business while still maintaining our overall bit market share for DM and NAND

Speaker Change: I will now turn it over to Mark for our financial results and outlook.

Mark Murphy: Thank you, Sanjay, and good afternoon, everyone. In fiscal Q4, Micron delivered revenue at the high end of the guidance range, and gross margin and EPS above the high end of the guidance ranges. We are exiting the fiscal year with excellent momentum, having expanded our industry-leading product portfolio, executed well on pricing, and improved our financial performance significantly from the start of the year. Total fiscal Q4 revenue was approximately $7.8 billion, up 14% sequentially, and up 93% year over year. Fiscal 2024 total revenue was $25.1 billion, up 62% year over year. Fiscal Q4 DRAM revenue was $5.3 billion, up 93% year over year, and represented 69% of total revenue sequentially. DRAM revenue increased 14% with flattish bit shipments and prices increasing in the mid-teens percentage range.

Mark Murphy: Thank you, Sanjay and good afternoon everyone.

Mark Murphy: In fiscal Q4, my chronic liver revenue at the high end of the guidance range and gross margin and EPS above the high end of the guidance ranges.

Mark Murphy: We are exiting the fiscal year with excellent momentum, having expanded our industry leading product portfolio, executed well on pricing, and improved our financial performance significantly from the start of the year.

Mark Murphy: Total Fiscal Q4 revenue was approximately $7.8 billion, up 14% sequentially and up 93% year over year.

Mark Murphy: fiscal 2024 total revenue was $25.1 billion, up 62% year over year.

Mark Murphy: fiscal Q4 DRAM revenue was $5.3 billion, up 93% year over year, and represented 69% of total revenue.

Speaker Change: So, eventually, DRAM revenue increased 14% with flat-ish bit-shut-mints and prices increasing in the mid-teens percentage range.

Mark Murphy: For the fiscal year, DRAM revenue increased 60% year over year to $17.6 billion, representing 70% of total revenue. Fiscal Q4 NAND revenue was $2.4 billion, up 96% year over year, and represented 31% of Micron's total revenue. NAND revenue increased 15% sequentially, with bit shipments increasing in the high single digit percentage range and prices increasing in the high single digit percentage range. Fiscal Q4 NAND revenue was a new quarterly record for Micron for the fiscal year. NAND revenue increased 72% year over year to $7.2 billion, representing 29% of total revenue. Now turning to revenue by business unit, Compute and Networking. Business unit revenue was $3 billion, up 17% sequentially. Data Center Server DRAM achieved a quarterly revenue record in fiscal Q4, driven by strong demand for high capacity solutions as well as our continued ramp of HBM.

For the fiscal year, DRAM revenue increased 60% year over year to $17.6 billion, representing 70% of total revenue. Fiscal Q4 NAND revenue was $2.4 billion, up 96% year over year, and represented 31% of Micron's total revenue. NAND revenue increased 15% sequentially, with bit shipments increasing in the high single digit percentage range and prices increasing in the high single digit percentage range. Fiscal Q4 NAND revenue was a new quarterly record for Micron for the fiscal year. NAND revenue increased 72% year over year to $7.2 billion, representing 29% of total revenue. Now turning to revenue by business unit, Compute and Networking. Business unit revenue was $3 billion, up 17% sequentially. Data Center Server DRAM achieved a quarterly revenue record in fiscal Q4, driven by strong demand for high capacity solutions as well as our continued ramp of HBM.

Speaker Change: For the fiscal year, DRAM revenue increased 60% year over year to $17.6 billion, representing 70% of total revenue.

Speaker Change: fiscal Q4 NAND revenue was $2.4 billion, up 96% year over year, and represented 31% of Micron's total revenue.

Speaker Change: Man revenue increased 15% sequentially, with betchettments increasing in the high single digit percentage range, and prices increasing in the high single digit percentage range.

Speaker Change: Pitchco 2 for Nandravenu was a new quarterly record for Micron.

Speaker Change: For the fiscal year, NAND revenue increased 72% year over year to $7.2 billion, representing 29% of total revenue.

Speaker Change: Now turning to revenue by business unit.

Speaker Change: Compute and networking business unit revenue was $3 billion, up 17% sequentially.

Speaker Change: Data Center, Server, B-Ram, achieved a quarterly revenue record in fiscal Q4.

Speaker Change: driven by strong demand for high capacity solutions, as well as our continued ramp of HBM.

Mark Murphy: Revenue for the mobile business unit was $1.9 billion, up 18% sequentially driven by seasonal product ramps. Revenue for the storage business unit was $1.7 billion, up 24% sequentially and led by data center SSD which reached a quarterly revenue record. We achieved record high revenue for fiscal year 2024 for our NAND storage business. Embedded business unit revenue was $1.2 billion, down 9% sequentially in fiscal 2024. The automotive segment achieved a new fiscal year revenue record for the fourth consecutive year. The consolidated gross margin for fiscal Q4 was 36.5%, improving over 8 percentage points sequentially. Higher pricing and improved product mix were the key drivers of the stronger profitability for the fiscal year. Consolidated gross margin was 23.7%, up over 31 percentage points year over year.

Revenue for the mobile business unit was $1.9 billion, up 18% sequentially driven by seasonal product ramps. Revenue for the storage business unit was $1.7 billion, up 24% sequentially and led by data center SSD which reached a quarterly revenue record. We achieved record high revenue for fiscal year 2024 for our NAND storage business. Embedded business unit revenue was $1.2 billion, down 9% sequentially in fiscal 2024. The automotive segment achieved a new fiscal year revenue record for the fourth consecutive year. The consolidated gross margin for fiscal Q4 was 36.5%, improving over 8 percentage points sequentially. Higher pricing and improved product mix were the key drivers of the stronger profitability for the fiscal year. Consolidated gross margin was 23.7%, up over 31 percentage points year over year.

Speaker Change: Revenue for the mobile business unit was $1.9 billion.

Speaker Change: Up 18% sequentially driven by seasonal product ramps.

Speaker Change: Revenue for the storage business unit was $1.7 billion, up 24% sequentially, and led by Data Center SSD.

Speaker Change: which reached a quarterly revenue record.

Speaker Change: We achieved record high revenue for fiscal year 2024 for our NAND storage business.

Speaker Change: and Bennett Business Jr. revenue is $1.2 billion, down 9% sequentially.

Speaker Change: In fiscal 2024 the automotive segment achieved a new fiscal year revenue record for the fourth consecutive year.

Speaker Change: The consolidated gross margin for fiscal Q4 was 36.5 percent, improving over 8 percentage points sequentially.

Speaker Change: Fire pricing and improved product mix were the key drivers of the stronger profitability.

Speaker Change: For the fiscal year, consolidate a gross margin was 23.7%.

Mark Murphy: Operating expenses in fiscal Q4 were $1,081,000,000, up $105,000,000 sequentially due to an increase in R&D program expenses for the fiscal year. Operating expenses were $4 billion, up 11% year-over-year. The increase in fiscal 2024 operating expenses was primarily driven by an increase in R&D investments and reinstatement of short-term incentive compensation. We generated operating income of $1.7 billion in fiscal Q4, resulting in an operating margin of approximately 23%, which was up 9 percentage points sequentially and up 53 percentage points from a year ago. Quarter fiscal 2024 operating income was $1.9 billion, resulting in an operating margin of approximately 8%, which was up 39 percentage points year-over-year. Fiscal Q4 adjusted EBITDA was $3.7 billion, resulting in an EBITDA margin of 48%, up 5 percentage points sequentially and up 30 percentage points from the year ago. Quarter fiscal 2024.

Operating expenses in fiscal Q4 were $1,081,000,000, up $105,000,000 sequentially due to an increase in R&D program expenses for the fiscal year. Operating expenses were $4 billion, up 11% year-over-year. The increase in fiscal 2024 operating expenses was primarily driven by an increase in R&D investments and reinstatement of short-term incentive compensation. We generated operating income of $1.7 billion in fiscal Q4, resulting in an operating margin of approximately 23%, which was up 9 percentage points sequentially and up 53 percentage points from a year ago. Quarter fiscal 2024 operating income was $1.9 billion, resulting in an operating margin of approximately 8%, which was up 39 percentage points year-over-year. Fiscal Q4 adjusted EBITDA was $3.7 billion, resulting in an EBITDA margin of 48%, up 5 percentage points sequentially and up 30 percentage points from the year ago. Quarter fiscal 2024.

Speaker Change: Up over 31 percentage points to you over year.

Speaker Change: Operating expenses in Fiscal Q4 were $1 billion, $81 million, up $105 million to eventually do to an increase in R&D program expenses.

Speaker Change: For the fiscal year, operating expenses were $4 billion, up to 11% year over year.

Speaker Change: The increase in fiscal 2024 operating expenses was primarily driven by an increase in R&D investment and reinstatement of short-term incentive compensation.

Speaker Change: We generate an operating income of $1.7 billion in fiscal Q4.

Speaker Change: Resulting in an operating margin of approximately 23%.

Speaker Change: which was up nine percentage points sequentially and up 53 percentage points from a year ago quarter.

Speaker Change: fiscal 2024 operating income was $1.9 billion.

Speaker Change: Resulting in an operating margin of approximately 8%.

Speaker Change: which was up 39 percentage points year over year.

Speaker Change: fiscal Q4 adjusted EBITDA was 3.7 billion dollars, resulting in an EBITDA margin of 48%. A 5 percentage point sequentially and a 30 percentage point from the year ago quarter.

Mark Murphy: EBITDA was $9.7 billion, resulting in an EBITDA margin of over 38%, which was up 20 percentage points year-over-year. Fiscal Q4 taxes were $387 million, higher than our guide, largely due to a shift in the jurisdictional mix of earnings. Fiscal 2024 taxes were $379 million, or approximately 20% of pre-tax income. Non-GAAP diluted earnings per share in fiscal Q4 was $1.18 compared to $0.62 per share in the prior quarter and a loss per share of $1.07 in the year-ago quarter. Fiscal Q4 Non-GAAP EPS exceeded the high end of our guidance range, driven by better pricing and profitability. Fiscal 2024 Non-GAAP EPS was $1.30. Turning to cash flows and capital spending, our operating cash flows were $3.4 billion in fiscal Q4, representing 44% of revenue.

EBITDA was $9.7 billion, resulting in an EBITDA margin of over 38%, which was up 20 percentage points year-over-year. Fiscal Q4 taxes were $387 million, higher than our guide, largely due to a shift in the jurisdictional mix of earnings. Fiscal 2024 taxes were $379 million, or approximately 20% of pre-tax income. Non-GAAP diluted earnings per share in fiscal Q4 was $1.18 compared to $0.62 per share in the prior quarter and a loss per share of $1.07 in the year-ago quarter. Fiscal Q4 Non-GAAP EPS exceeded the high end of our guidance range, driven by better pricing and profitability. Fiscal 2024 Non-GAAP EPS was $1.30. Turning to cash flows and capital spending, our operating cash flows were $3.4 billion in fiscal Q4, representing 44% of revenue.

Speaker Change: fiscal 2024 EBITDA was $9.7 billion.

Speaker Change: Resulting in an EBITDA margin of over 38% which was up 20% at points, year or year.

Speaker Change: fiscal Q4 taxes were $387 million in higher than our guide. Large a duty to as shift in the jurisdictional mix of earnings.

Speaker Change: Fiscal 20-24 taxes were $379 million, or approximately 20% of pre-tax income.

Speaker Change: Non-Gap diluted earnings for Sharon fiscal Q4 was a $1.18.

Speaker Change: Compared to 62 cents per share in the prior quarter and a loss per share of a dollar seven cents in the year ago quarter.

Speaker Change: Let's go to 4 non-gap EPS succeeded the high end of our guidance range.

Speaker Change: Durvin by better pricing and profitability.

Speaker Change: It's called 2024 non-gap EPS, so it's a $1.30.

Speaker Change: Pernita cash flows and capital spending are operating cash flows for $3.4 billion in fiscal Q4, representing 44% of revenue.

Mark Murphy: For the fiscal year, we generated $8.5 billion of operating cash flows representing 34% of revenue. Capital expenditures were $3.1 billion during the quarter. CapEx totaled $8.1 billion for the fiscal year, up from $7 billion in fiscal 2023. We generated $323 million of free cash flow for the quarter and $386 million for the fiscal year. As announced in early August, we determined that share repurchases may resume in light of improved conditions. As such, with our return to free cash flow, reduced leverage and long term positive outlook, we saw an opportunity to repurchase shares in the quarter. In fiscal Q4, we repurchased $300 million or 3.2 million shares at an average price of $93.07. Micron's fiscal Q4 ending inventory was $8.9 billion or 158 days, up three days from the prior quarter.

For the fiscal year, we generated $8.5 billion of operating cash flows representing 34% of revenue. Capital expenditures were $3.1 billion during the quarter. CapEx totaled $8.1 billion for the fiscal year, up from $7 billion in fiscal 2023. We generated $323 million of free cash flow for the quarter and $386 million for the fiscal year. As announced in early August, we determined that share repurchases may resume in light of improved conditions. As such, with our return to free cash flow, reduced leverage and long term positive outlook, we saw an opportunity to repurchase shares in the quarter. In fiscal Q4, we repurchased $300 million or 3.2 million shares at an average price of $93.07. Micron's fiscal Q4 ending inventory was $8.9 billion or 158 days, up three days from the prior quarter.

Speaker Change: For the fiscal year, we generated $8.5 billion of operating cash flows, representing 34% of revenue.

Speaker Change: Capital expenditures were $3.1 billion during the quarter.

Speaker Change: Capex totaled $8.1 billion for the fiscal year, up from $7 billion in fiscal 2020 to 8.

Speaker Change: We generated $323 million of free cash flow for the quarter and $386 million for the fiscal year.

Speaker Change: As announced in early August, we determine that cherry purchases may resume and light of improved conditions.

Speaker Change: As such.

Speaker Change: With our return to free cash flow, reduce leverage, and long-term positive outlook.

Speaker Change: We saw an opportunity to repurchase shares in the quarter.

Speaker Change: In fiscal Q4, we repurchased $300 million or $3.2 million shares at an average price of $93.7 per share.

Speaker Change: Micron's fiscal Q4 ending inventory was 8.9 billion dollars or 158 days.

Mark Murphy: Micron continues to exercise pricing discipline and expect a healthy supply demand environment in the industry in fiscal 2025. We intend to draw down our inventory to support our revenue growth in fiscal 2025. On the balance sheet, we held $9.2 billion of cash and investments at quarter end and maintained near $11.7 billion of liquidity when including our untapped credit facility. We ended the quarter with $13.4 billion in total debt, low net leverage, and a weighted average maturity on our debt of 2031. We are committed to further strengthening our balance sheet and sustaining our investment grade credit rating. Now turning to our outlook for the fiscal first quarter, fiscal Q1 gross margin is projected to improve sequentially primarily on better pricing and portfolio mix. Recall that in fiscal Q4 HBM remained accretive to both DRAM and overall company gross margins.

Micron continues to exercise pricing discipline and expect a healthy supply demand environment in the industry in fiscal 2025. We intend to draw down our inventory to support our revenue growth in fiscal 2025. On the balance sheet, we held $9.2 billion of cash and investments at quarter end and maintained near $11.7 billion of liquidity when including our untapped credit facility. We ended the quarter with $13.4 billion in total debt, low net leverage, and a weighted average maturity on our debt of 2031. We are committed to further strengthening our balance sheet and sustaining our investment grade credit rating. Now turning to our outlook for the fiscal first quarter, fiscal Q1 gross margin is projected to improve sequentially primarily on better pricing and portfolio mix. Recall that in fiscal Q4 HBM remained accretive to both DRAM and overall company gross margins.

Speaker Change: Up 3 days from the prior quarter.

Speaker Change: Micron continues to exercise pricing discipline and expect a healthy supply demand environment in the industry in fiscal 2025.

Speaker Change: We intend to draw down our inventory to support our revenue growth in fiscal 2025.

Speaker Change: On the balance sheet, we held $9.2 billion of cash and investments a quarter-end and maintained near $11.7 billion of liquidity when including our untapped credit facility.

Speaker Change: We ended the quarter with $13.4 billion in total debt, low net leverage and a weighted average maturity on our debt of 2031.

Speaker Change: We are committed to further strengthening our balance sheet and sustaining our investment grade credit rating.

Speaker Change: Now turning to our outlook for the fiscal first quarter.

Speaker Change: Fiscal Q1 gross margin is projected to improve sequentially primarily on better pricing and portfolio mix.

Speaker Change: Recall that in fiscal Q4, HBM remained a creative to both DRAM and overall company gross margins.

Mark Murphy: We project changes in our portfolio mix to continue to be an important and favorable contributor to gross margins over time. We forecast operating expenses to be flat to slightly up in the fiscal first quarter compared to fiscal fourth quarter levels. For the full fiscal year 2025, we see operating expenses growing by a mid-teens percentage versus fiscal 2024. Growth in operating expenses is planned to be second-half weighted as we ramp necessary R&D program investments, including for HBM, to capture the substantial growth opportunity ahead. For fiscal Q1 and fiscal 2025, we estimate our non-GAAP tax rate to be in the mid-teens percent range. We project days of inventory outstanding to decline in fiscal 2025 and for DIO to approach our target by the end of fiscal 2025. In fiscal Q1, we forecast capital expenditures to increase sequentially to approximately $3.5 billion.

We project changes in our portfolio mix to continue to be an important and favorable contributor to gross margins over time. We forecast operating expenses to be flat to slightly up in the fiscal first quarter compared to fiscal fourth quarter levels. For the full fiscal year 2025, we see operating expenses growing by a mid-teens percentage versus fiscal 2024. Growth in operating expenses is planned to be second-half weighted as we ramp necessary R&D program investments, including for HBM, to capture the substantial growth opportunity ahead. For fiscal Q1 and fiscal 2025, we estimate our non-GAAP tax rate to be in the mid-teens percent range. We project days of inventory outstanding to decline in fiscal 2025 and for DIO to approach our target by the end of fiscal 2025. In fiscal Q1, we forecast capital expenditures to increase sequentially to approximately $3.5 billion.

Speaker Change: We project changes in our portfolio max to continue to be an important and favorable contributor to gross margins over time.

Speaker Change: We forecast operating expenses to be flat to slightly up in the fiscal first quarter, comparative fiscal fourth quarter levels.

Speaker Change: For the full fiscal year 2025, we see operating expenses growing by a mid-teens percentage versus fiscal 2024.

Speaker Change: Growth and operating expenses is planned to be second half-weighted. As we ramp necessary, R&D program investments, including for HBM, to capture this substantial growth opportunity ahead.

Speaker Change: For fiscal Q1 and fiscal 2025, we estimate our non-gap tax rate to be in the mid-teens percent range.

Speaker Change: We project days of inventory outstanding to decline in fiscal 2025 and for DiO to approach our target by the end of fiscal 2025.

Speaker Change: In fiscal Q1, we forecast capital expenditures to increase sequentially to approximately $3.5 billion.

Mark Murphy: As Sanjay mentioned, we expect fiscal 2025 CapEx to be around mid-30s% range of revenue based on our current CapEx and revenue expectations. We remain circumspect with all capital spending and disciplined with WFE investments in order to grow our supply in line with industry demand. With all these factors in mind, our non-GAAP guidance for fiscal Q1 is as follows. We expect revenue to be $8.7 billion ± $200 million, gross margin to be in the range of 39.5% ± 100 basis points, and operating expenses to be approximately $1.085 billion ± $15 million. As mentioned, we expect the fiscal Q1 tax rate to be in the mid-teens% range. Based on a share count of approximately 1.14 billion shares, we expect EPS to be $1.74 per share ± $0.08.

As Sanjay mentioned, we expect fiscal 2025 CapEx to be around mid-30s% range of revenue based on our current CapEx and revenue expectations. We remain circumspect with all capital spending and disciplined with WFE investments in order to grow our supply in line with industry demand. With all these factors in mind, our non-GAAP guidance for fiscal Q1 is as follows. We expect revenue to be $8.7 billion ± $200 million, gross margin to be in the range of 39.5% ± 100 basis points, and operating expenses to be approximately $1.085 billion ± $15 million. As mentioned, we expect the fiscal Q1 tax rate to be in the mid-teens% range. Based on a share count of approximately 1.14 billion shares, we expect EPS to be $1.74 per share ± $0.08.

Speaker Change: As Sanjay mentioned, we expect fiscal 2025 CapEx to be around mid-30's percentage range of revenue based on our current CapEx and revenue expectations.

Sanjay: We remain circumspect with all capital spending and discipline with WFE investments in order to grow spit supply and line with industry demand.

Speaker Change: But all these factors in mind are non-gap guidance for fiscal Q1 is as follows.

Speaker Change: We expect revenue to be $8.7 billion, plus or minus $200 million.

Speaker Change: Gross margin to be in the range of 39.5% plus or minus 100 basis points.

Speaker Change: and operating expenses to be approximately $1 billion, $85 million.

Speaker Change: Plus or minus $15 million.

Speaker Change: As mentioned, we expect the fiscal 21 tax rate to be in the mid-teens per cent range.

Speaker Change: Based on a share count of approximately 1.14 billion shares, we expect EPS to be $1.74 per share.

Mark Murphy: In closing, we remain focused on investing in a disciplined manner to support our growth and maintain stable bit share in DRAM and NAND. Micron is well positioned to deliver record revenue as well as significantly improve profitability and free cash flow in fiscal 2025. I will now turn it back over to Sanjay.

In closing, we remain focused on investing in a disciplined manner to support our growth and maintain stable bit share in DRAM and NAND. Micron is well positioned to deliver record revenue as well as significantly improve profitability and free cash flow in fiscal 2025. I will now turn it back over to Sanjay.

Speaker Change: Plotr minus 8 cents.

Speaker Change: In closing, we remain focused on investing in a discipline manner to support our growth and maintain stable bit share in DRAM and NAND.

Speaker Change: Micron is well positioned to deliver record revenue as well as significantly improved profitability and free cash flow in fiscal 2025.

Sanjay Mehrotra: Thank you, Mark. Fiscal 2024 was a year of many records as we discussed earlier, and I expect fiscal 2025 to be even better. With the advent of AI, we are in the most exciting period that I have seen for memory and storage in my career. Micron's memory and storage innovations are enabling tremendous breakthroughs, transforming how the world uses information to enrich life for all. Micron has sustained multiple generations of technology leadership in DRAM and NAND. Our unique culture and our industry-leading product portfolio combined with our world-class manufacturing, execution, and quality are enabling us to deliver differentiated high-value solutions across end markets. This has made us the partner of choice for our customers as they plan their long-term roadmaps, and our momentum lays the foundation for an exciting fiscal 2025. Thank you for joining us today. We will now open for questions.

Speaker Change: I will now turn back over to Sanjay.

Sanjay: Thank you Mark, fiscal 2024 was a year of many records as we discussed earlier and I expect fiscal 2025 to be even better.

Speaker Change: With the advent of AI, we are in the most exciting period that I have seen for memory and storage in my career.

Speaker Change: Microns, Memory and Suraj innovation are enabling tremendous breakthroughs, transforming how the world uses information to enrich life for all.

Speaker Change: Micron has sustained multiple generations of technology leadership in DRAM and NAND.

Speaker Change: Our unique culture in our industry-leading product portfolio combines with our world-class manufacturing execution and quality, our enabling us to deliver differentiated high-value solutions across and markets.

Speaker Change: This has made us the partner of choice for our customers. As they plan their long term road maps and our momentum leaves the foundation for an exciting fiscal 2025.

Speaker Change: Thank you for joining us today. We will now open for questions.

Operator: Certainly. Thank you. And our first question comes from the.

Operator: Certainly. Thank you. And our first question comes from the line of Timothy Arcuri from UBS. Your question please.

Sanjay Mehrotra: Line.

Speaker Change: Thirdly, thank you and our first question comes from the line.

Operator: Of Timothy Arcuri from UBS. Your question please.

Mark Murphy: Thanks a lot, Mark. I guess my first question is some of the assumptions and guidance.

Timothy Arcuri: Thanks a lot, Mark. I guess my first question is some of the assumptions and guidance. I think you've been saying kind of on the conference circuit that bits would be pretty flat in fiscal Q1 for both DRAM and NAND. Is that what you're still assuming? So that most of the increase in the, you know, revenues basically pricing, is that correct?

Speaker Change: of Timothy Akkaray from UBS. Your question, please.

Sanjay Mehrotra: I think you've been saying kind of.

Mark Murphy: On the conference circuit that bits would be pretty flat in fiscal Q1 for both DRAM and NAND. Is that what you're still assuming? So that most of the increase in the, you know, revenues basically pricing, is that correct? Tim? What we see now and we had provided a slight update in August but we now see that DRAM bits we expect to be up somewhat higher than what we had said before. We had said before they were going to be flat. Then we revised that to flat to slightly up. And in this latest guide, we now view DRAM to be up somewhat higher from that NAND bits, we expect to be sequentially flattish.

Timothy Akkaray: Thanks a lot Mark, I guess my first question is, some of the assumptions with guidance. I think you've been saying kind of on the conference or get that bits would be pretty flat in fiscal Q1 for both DRM and NAND. Is that what you're still assuming so that most of the increase in the revenue is basically pricing, is that correct?

Mark Murphy: Tim? What we see now and we had provided a slight update in August but we now see that DRAM bits we expect to be up somewhat higher than what we had said before. We had said before they were going to be flat. Then we revised that to flat to slightly up. And in this latest guide, we now view DRAM to be up somewhat higher from that NAND bits, we expect to be sequentially flattish.

Timothy Akkaray: Tim, what we see now, and we...

Speaker Change: had provided a slide update in August, but we now see that

Speaker Change: Diram Bets, we expect to be...

Speaker Change: Up somewhat higher than what we had said before. We had said before that there were going to be flat and we revised that to...

Speaker Change: Flat, this light way up.

Speaker Change: and in this latest guide we now view DRAM to be up somewhat higher from that. Man Vets we expect to be sequentially flattish.

Mark Murphy: You know, keep in mind that our guide, you know, also contemplates, you know, a healthy supply-demand environment and an increasingly favorable mix in the business with HBM, high-capacity DIMMs, LP data center SSD. So we see stronger data center demand. We had indicated that was robust, and that's been favorable. Then we're just executing well on our product roadmaps, our product execution, our overall manufacturing execution. Thanks, Mark. Then just one last thing. You had said that HBM revenue last quarter in May was a little over $100 million. Can you give us the number in August?

You know, keep in mind that our guide, you know, also contemplates, you know, a healthy supply-demand environment and an increasingly favorable mix in the business with HBM, high-capacity DIMMs, LP data center SSD. So we see stronger data center demand. We had indicated that was robust, and that's been favorable. Then we're just executing well on our product roadmaps, our product execution, our overall manufacturing execution.

Speaker Change: Yeah, keep in mind that our guide.

Speaker Change: You know, also contemplates, you know, a healthy, supply-demand environment, and an increasingly favorable mix in the business with.

Speaker Change: HBM, Hike Bassidims, LP, Data Center SSD. So we see stronger Data Center demand.

Speaker Change: and we had indicated that it was robust and that's been favorable and then we're just executing well on our product road maps, our product execution, our overall manufacturing execution.

Timothy Arcuri: Thanks, Mark. Then just one last thing. You had said that HBM revenue last quarter in May was a little over $100 million. Can you give us the number in August? It looks like it was 303 to 350, something like that. Is that about right for your HBM revenue in fiscal Q4?

Speaker Change: Thanks, Mark, and then just one last thing. You would say that HBM revenue last quarter in May was a little over a hundred million dollars. Can you give us the number in August? It looks like it was 300.

Sanjay Mehrotra: It looks like it was 303 to.

Mark Murphy: 350, something like that. Is that about right for your HBM revenue in fiscal Q4?

Sanjay Mehrotra: We are not disclosing a specific revenue for Q4. We had said earlier that we'll have several hundred million dollars of revenue in fiscal year 2024. We achieved that objective and really very proud of all the execution from our team in terms of putting in place the capacity, managing the yield ramp successfully to our goals, and of course, continuing to deliver a strong product to our customer base. We're not going to be providing specifics on a quarter by quarter basis, but keep in mind, yes, we delivered several hundred million dollars of revenue in fiscal year 2024, and we look forward to delivering multiple billions of dollars of revenue of HBM in fiscal year 2025.

Speaker Change: 3-50 something like that, is that about right, very age-beam revenue and fiscal Q4?

Speaker Change: If you are not disclosing a specific revenue for FU4, we have said earlier that we will have $700 million of revenue in fiscal year 24 and VHU.

Speaker Change: That Objective and really very proud of all the execution from our team in terms of putting in place the capacity, managing the yield ramp successfully to our goals and of course continue to deliver a strong product.

Speaker Change: 2-hour customer days.

Speaker Change: So, not providing, we're not going to be providing specifics on a quarter by quarter basis, but keep in mind, yes, we delivered several hundred million dollars of revenue in fiscal year 24 and we look forward to delivering multiple billions of dollars of revenue of HBM in fiscal year 25.

Mark Murphy: Okay, thank you, Sanjay.

Timothy Arcuri: Okay, thank you, Sanjay.

Operator: Thank you. And our next question comes from the line of C.J. Muse from Cantor Fitzgerald. Your question, please.

Sanjay: Thank you, Sanjay.

Speaker Change: Thank you and our next question, come to the line of CJ Muse from Canterbury's Gerald, your question, please.

Sanjay Mehrotra: Yeah, good afternoon. Thank you for taking the question. I guess, first question on gross margins, you guided up a robust 300 basis points. Was hoping you could spend a little bit of time kind of walking us through, you know, what's driving that, how much is from like for like DRAM, ASP increases, mix, HBM yield improvements, and cost downs. And I guess as you kind of walk through that, can you give us a flavor of how to think about those drivers beyond the November quarter?

C.J. Muse: Yeah, good afternoon. Thank you for taking the question. I guess, first question on gross margins, you guided up a robust 300 basis points. Was hoping you could spend a little bit of time kind of walking us through, you know, what's driving that, how much is from like for like DRAM, ASP increases, mix, HBM yield improvements, and cost downs. And I guess as you kind of walk through that, can you give us a flavor of how to think about those drivers beyond the November quarter?

CJ Muse: Yeah, good afternoon. Thank you for taking the question. I guess first question on gross margins, you've got it up a robust 300 basis points.

CJ Muse: was hoping you could spend a little bit of time kind of walking us through, you know, what's driving that? How much is from like the like DRM, ASP increases, mix, HP and yield improvements, and cost downs. And I guess as you kind of walk through that, can you give us a flavor of how to think about those drivers beyond the November quarter?

Mark Murphy: So, C.J., you know, in the Q4 to Q1, you know, as we look at that margin expansion, it's similar to the themes we've talked about before. The supply-demand environment is healthy. So we're seeing that play through on pricing, we're also seeing the execution of our product roadmap and the ramp of the higher value products, and that's contributing on costs. We are doing well on cost downs. However, in the Q1 because of the mix with HBM, we are going to see DRAM costs go up slightly. And so as we look forward into the Q1, things are coming together as we had hoped, tight at the leading edge, good supply-demand, favorable pricing environment, and certainly favorable mix and that becoming a more important part of the business and good cost execution.

CJ Muse: CJ, you know, in the fourth to first quarter, you know, as we, as we look at that margin expansion, it's, you know, it's similar to the themes we've talked about before.

Speaker Change: The Supply to Man Environment is healthy, so we're seeing that play through on the...

Speaker Change: and pricing. We're also seeing the execution of our product roadmap and the ramp of the higher value products.

Speaker Change: and that's contributing. On cloth, we are doing well on cloth downs.

Speaker Change: Yeah, however, in the first quarter because of the mix with HBM we are going to see a DRAM Costco up slightly.

Speaker Change: And, you know, and that's, you know, so as we look forward.

Speaker Change: and the end of the first quarter, things are coming together as we had hoped.

Speaker Change: You know, tight at the leading edge, good supply demand.

Speaker Change: Yeah, favorable pricing environment and certainly favorable mix and that becoming a more important part of the business.

Sanjay Mehrotra: Very helpful. Then I guess maybe as a follow-up, you've reiterated your CapEx outlook, but obviously the end market environment has changed a bit in the last three months. So curious if you've changed your prioritization of CapEx at all. Obviously you talked about a focus on shelves in HBM. Any other change in terms of your spending? Not really. We don't have any other change. I mean, again, continuing to focus our CapEx on HVM investment, which, as you know, is a high value solution and product [that] tends to be accretive to the margins, and, of course, long term construction CapEx, and that is construction CapEx that is targeted for longer term growth for the second latter part of this decade.

C.J. Muse: Very helpful. Then I guess maybe as a follow-up, you've reiterated your CapEx outlook, but obviously the end market environment has changed a bit in the last three months. So curious if you've changed your prioritization of CapEx at all. Obviously you talked about a focus on shelves in HBM. Any other change in terms of your spending?

Speaker Change: and good car execution.

Speaker Change: Per helpful and I guess maybe as a follow-up.

Speaker Change: You reiterated your capex outlook, but obviously the end-marking environment has changed a bit of the last three months of curious, if you've changed your prioritization of capex, and obviously you talked about a focus on shelves in HBM, any other change, in terms of your spending.

Sanjay Mehrotra: Not really. We don't have any other change. I mean, again, continuing to focus our CapEx on HVM investment, which, as you know, is a high value solution and product [that] tends to be accretive to the margins, and, of course, long term construction CapEx, and that is construction CapEx that is targeted for longer term growth for the second latter part of this decade.

Speaker Change: Not really, we don't have any other change, we need.

Speaker Change: Again, you know, continuing to focus our capex on HVM investment, you know which as you know is a high value solution and product tends to be a theta of to the margins and of course long term construction.

Speaker Change: Kappex, and that is the construction cap is that is targeted for longer term bed growth for the second letter part of this decade.

Satya Kumar: Thank you.

C.J. Muse: Thank you.

Operator: Thank you. Our next question comes from the line of Krish Sankar from TD Cowen. Your question please.

Speaker Change: Thank you. Thank you and our next question comes from the line of Krish Shankar from TD Cowan, your question please.

Sanjay Mehrotra: Yeah, I had two questions. One, Sanjay, your AI GPU customers are moving to a one-year cadence for their products, and it looks like the HBM roadmap is also moving to the 12-month from a prior 18-month cadence. Do you think that this puts you and your peers at a yield disadvantage? That is, in other words, as HBM3E yield and gross margin improves, you have to migrate to HBM4, and that new node might come at a lower yield. So I'm just kind of curious how to think about that cadence of HBM progression and how that impacts yield and gross margin. And I had a quick follow-up. As we mentioned, we are doing well with respect to our goals on HBM3E yields with 8-high and in 2025. Of course we will begin our output in early 2025 with 12-high.

Krish Sankar: Yeah, I had two questions. One, Sanjay, your AI GPU customers are moving to a one-year cadence for their products, and it looks like the HBM roadmap is also moving to the 12-month from a prior 18-month cadence. Do you think that this puts you and your peers at a yield disadvantage? That is, in other words, as HBM3E yield and gross margin improves, you have to migrate to HBM4, and that new node might come at a lower yield. So I'm just kind of curious how to think about that cadence of HBM progression and how that impacts yield and gross margin. And I had a quick follow-up.

Krish Shankar: Yeah, I have two questions, one Sunday, you know, your AI, BPU customers, and we need to one year to get into the product

Speaker Change: and it looks like the XBM Road map is also moving to the 12 months.

Speaker Change: from a prior 18 month kiddin.

Speaker Change: D.T. that this puts you and your peers at the E-L, this advantage, I, in other words, as HBM, 3 E-E-E-E-L and goes more in improved.

Speaker Change: You have to migrate to HBM pole and that new node might come at a lower yield. So I'm just going to curious how to think about that cadence of HBM progression and how that impact yield and goes margin on the adequate follow-up.

Sanjay Mehrotra: As we mentioned, we are doing well with respect to our goals on HBM3E yields with 8-high and in 2025. Of course we will begin our output in early 2025 with 12-high.

Speaker Change: As we mentioned, we are doing well with respect to our goals on HPM.

Speaker Change: 3 in use with 8i.

Speaker Change: and then 25, of course, we will be, you know, increasing that output.

Sanjay Mehrotra: And of course 12 high will be going through its own yield ramp, and 12 high will be ramping through our calendar year 2025, and HBM4 will be a 2026 product. Like any other new product, of course there are, you know, in the early stages always ramp up of yield involved. But we are very pleased with the technical expertise that we have, manufacturing expertise, and doing really quite well in terms of continuing to ramp up the yield and the quality of our products. And you know, at the end of the day, you know, that cadence of, you know, our customers, cadence moving faster only benefits those who have the best product and technology because they are the ones who are able to work with the customers at the pace that they need.

And of course 12 high will be going through its own yield ramp, and 12 high will be ramping through our calendar year 2025, and HBM4 will be a 2026 product. Like any other new product, of course there are, you know, in the early stages always ramp up of yield involved. But we are very pleased with the technical expertise that we have, manufacturing expertise, and doing really quite well in terms of continuing to ramp up the yield and the quality of our products. And you know, at the end of the day, you know, that cadence of, you know, our customers, cadence moving faster only benefits those who have the best product and technology because they are the ones who are able to work with the customers at the pace that they need.

Speaker Change: In 2020 25 which 12 High and of course 12 High will be going through its own e-l-dram and 12 High will be ramping through our calendar year 25 and HVM 4 will be 2020 6 products and like any other new product of course.

Speaker Change: There are, you know, in the early stages always ramp up of yield involved, but we are very pleased with the technical expertise that we have, manufacturing expertise and doing really quite well in terms of

Speaker Change: is continuing to ramp up the yield and the quality of our products.

Speaker Change: And you know at the end of the day you know that cadence of, you know, our customers cadence moving faster.

Speaker Change: Only Benefit Dose, who have the best product in technology because they are the ones who are able to work with the customers.

Sanjay Mehrotra: We are with our HBM3E, which has demonstrated clear leadership in performance, in power, and overall product feature set for our customers. We absolutely plan to maintain that leadership going forward with our roadmap from 8-high to 12-high of HBM3E and HBM4 and HBM4E in the future years along with our expertise in manufacturing. That should play to our strength in the time frame ahead. We work very closely with our customers. We work very, very closely with our customers, you know, to understand their cadence, to understand their requirements, and make sure that our roadmap both from technology, product, and manufacturing capabilities is aligned well with their requirements. Thanks a lot for that, Sanjay. Super helpful color, and a quick follow-up for Mark on inventory. I understand you're going to draw that down in FY25, but just in the last quarter it went up.

We are with our HBM3E, which has demonstrated clear leadership in performance, in power, and overall product feature set for our customers. We absolutely plan to maintain that leadership going forward with our roadmap from 8-high to 12-high of HBM3E and HBM4 and HBM4E in the future years along with our expertise in manufacturing. That should play to our strength in the time frame ahead. We work very closely with our customers. We work very, very closely with our customers, you know, to understand their cadence, to understand their requirements, and make sure that our roadmap both from technology, product, and manufacturing capabilities is aligned well with their requirements.

Speaker Change: At the pace that they need and we are with our HP and CE which has demonstrated clear leadership in performance.

Speaker Change: in Bauer.

Speaker Change: and overall product feature sets for our customers, we absolutely plan to maintain that leadership, going forward with our roadmap from 8, 2, 12, high of each month, 3, E and H, means 4 and 4, E in the future years.

Speaker Change: Along with our expertise in manufacturing, that should play to our strength in the time flame I had.

Vivek: and Vivek very close on it. Vivek works very, very closely with our customers, you know, to understand their cadence, to understand their requirements and make sure that our roadmap, both from technology, product and manufacturing capabilities is aligned well with their requirements.

Krish Sankar: Thanks a lot for that, Sanjay. Super helpful color, and a quick follow-up for Mark on inventory. I understand you're going to draw that down in FY25, but just in the last quarter it went up. Any color on where that inventory level is going up, is that within PCs? Is it mobile, DRAM? Any color there would be helpful. Thanks a lot.

Vivek: Kali Singh, thank you for that Sunday, Super Helpful Color, and a quick follow up for Mark on Inventory.

Sanjay Mehrotra: Any color on where that inventory level is going up, is that within PCs? Is it mobile, DRAM? Any color there would be helpful. Thanks a lot. Sure.

Mark Murphy: And this time, you're going to draw the down in S525, but just in the last word, it went up any color on where that inventory level is going up, is that between PCs, it's in mobile data, any color there would be helpful. Thanks more.

Mark Murphy: Sure. We were clear about this in the August conferences that we were seeing. While we were seeing robust data center demand, we were seeing some customers had, you know, were buying ahead, anticipation of price increases, you know, the rollout of AI-related devices, and just surety of supply given that leading-edge is tight. So you know, we did see some inventory build, and we communicated that inventories would remain elevated going into FY25. So this is what you see. So our days did go up. You know, we continue to be prudent with our supply and walking away from less profitable business. We do expect the environment, supply-demand environment to be constructive for improved profitability in 25. And given the tight leading-edge nodes and our outlook, we're going to need these inventories to bridge us to when our production on tech node transitions ramps.

Mark Murphy: We were clear about this in the August conferences that we were seeing. While we were seeing robust data center demand, we were seeing some customers had, you know, were buying ahead, anticipation of price increases, you know, the rollout of AI-related devices, and just surety of supply given that leading-edge is tight. So you know, we did see some inventory build, and we communicated that inventories would remain elevated going into FY25. So this is what you see. So our days did go up. You know, we continue to be prudent with our supply and walking away from less profitable business. We do expect the environment, supply-demand environment to be constructive for improved profitability in 25. And given the tight leading-edge nodes and our outlook, we're going to need these inventories to bridge us to when our production on tech node transitions ramps.

Speaker Change: Arab, [inaudible]

Speaker Change: We were clear about this in the August conferences that we were seeing while we were seeing robust data center demand. We were seeing some customers.

Speaker Change: You know, we're buying ahead anticipation of price increases, you know, the rollout of AI related devices and just charity of supply given that leading edges is tight.

Speaker Change: So, we did see some inventory bill and we communicated that inventory should remain elevated going into FY25, so as what you see, so our days did go up.

Speaker Change: You know, we continue to be prudent with our supply and walking away from less profitable business.

Speaker Change: We do expect.

Speaker Change: Yeah, the environment, supply demand, environment to be constructive for improved profitability in 25.

Speaker Change: and given the type.

Speaker Change: Leading Edge nodes and our outlook.

Speaker Change: We're going to need these inventories to bridge us to when our production on techno transitions ramps.

Mark Murphy: So that's why we've given an outlook that, you know, our inventories by the end of the fiscal year we expect to be approaching our target inventory levels. Now our volumes happen to be a bit more second-half weighted of the fiscal year, so we'll see a bit shallower improvement at the first half of the fiscal year, and then that improvement in DIO will steepen as we move through the second half. But we're confident in our inventory outlook and definitely need these leading-edge inventories to supply the market.

So that's why we've given an outlook that, you know, our inventories by the end of the fiscal year we expect to be approaching our target inventory levels. Now our volumes happen to be a bit more second-half weighted of the fiscal year, so we'll see a bit shallower improvement at the first half of the fiscal year, and then that improvement in DIO will steepen as we move through the second half. But we're confident in our inventory outlook and definitely need these leading-edge inventories to supply the market.

Speaker Change: So that's why we've given an outlook that...

Speaker Change: You know, our inventory is by the end of the fiscal year, we expect to be approaching our target inventory levels.

Speaker Change: Now, our volumes happen to be a bit more second half weighted of the fiscal year.

Speaker Change: So we'll see a bit shallower improvement at the first half of the fiscal year and then that improvement in DiO will deepen as we move through the second half, but we're confident in our inventory outlook and definitely need these leading edge.

Sanjay Mehrotra: Thanks, Mark.

Krish Sankar: Thanks, Mark.

Speaker Change: and Vintori's to supply the market.

Operator: Thank you. And our next question comes from the line of Joseph Moore from Morgan Stanley. Your question, please.

Speaker Change: Thanks for watching!

Speaker Change: Thank you and our next question comes from the line of Joseph Moore.

Satya Kumar: Great, thank you.

Joseph Moore: Great, thank you. In terms of your target for getting to HBM market share that's more in line with your overall market share. Can you kind of characterize how you get there? Do you anticipate that it's still a supply constrained environment for everybody, or are we sort of more, a little bit more balanced, than the quality of the Micron product drives us through? Just what's the determinant of that market share that gets you to that level?

Mark Murphy: In terms of your target for getting to HBM market share that's more in line with your overall market share. Can you kind of characterize how you get there?

Speaker Change: from Morgan Stanley, your question, please.

Joseph Moore: Great, thank you!

Joseph Moore: Tutors of your target for getting to HPM Market Share.

Sanjay Mehrotra: Do you anticipate that it's still a?

Mark Murphy: Supply constrained environment for everybody, or are we sort of more, a little bit more balanced, than the quality of the Micron product drives us through? Just what's the determinant of that market.

Speaker Change: That's more in line with your overall market share.

Joseph Moore: Can you kind of characterize how you get there, do you anticipate that it's still a supply constraint?

Speaker Change: Environment for everybody, or are we sort of more a little bit more balanced in the quality of the micro and product drives us through just what's the determinant of that market share that gets you to that level.

Sanjay Mehrotra: Share that gets you to that level? Well, certainly, I mean we are being responsible and disciplined in terms of managing our market share. We have, you know, industry's best HBM3E product and it's the best product with 30% lower power with 8-high. And you know, in fact when you go to 12-high, we are 20% lower power despite 50% increase in capacity versus others' 8-high products. So we are well positioned with our product, with its performance, with its power. And that's what is really putting us in the strong position of product being sold out for our 2024 and 2025 time frame. And when we look at HBM, we have talked about that next year we project a TAM of $25 billion consuming about 6% or over 6% of the industry base. In fact a TAM of greater than $25 billion in 2025.

Sanjay Mehrotra: Well, certainly, I mean we are being responsible and disciplined in terms of managing our market share. We have, you know, industry's best HBM3E product and it's the best product with 30% lower power with 8-high. And you know, in fact when you go to 12-high, we are 20% lower power despite 50% increase in capacity versus others' 8-high products. So we are well positioned with our product, with its performance, with its power. And that's what is really putting us in the strong position of product being sold out for our 2024 and 2025 time frame. And when we look at HBM, we have talked about that next year we project a TAM of $25 billion consuming about 6% or over 6% of the industry base. In fact a TAM of greater than $25 billion in 2025.

Speaker Change: Well, certainly, we are being responsible and disciplined in terms of managing our market share, we have, you know, industries, deaths, H.B. and 3-E product.

Speaker Change: And it's the best product with 30% lower power with a high, and in fact when you go to 12 high we are 20% lower power, despite 50% increase in capacity versus...

Speaker Change: and others, eight high products. So, we are well positioned with our product, with its performance, with its power, and that's what is really putting us in this strong position of

Speaker Change: You know, being a product being sold out for our 24th and 25th time frame.

Speaker Change: And when we look at HBM, we have talked about that next year we project a tam of $25 billion, consuming about 6% over 6% of the industry best. In fact, a tam of $0.25 billion in 2025.

Sanjay Mehrotra: And we are pretty confident that with our product, with our yield ramp, and with the agreement that we have in place with our customers, we will deliver sometime in 2025, get to our share to be in line with our industry share. So of course it's limited at this point by our production ramp, but we are really on a very good trajectory there. So we feel very confident with our product, with our production ramp, and with share opportunities. And frankly our HBM3E product is getting premium in the industry as well versus other products. So it just puts us on a good trajectory ahead as well. Great.

And we are pretty confident that with our product, with our yield ramp, and with the agreement that we have in place with our customers, we will deliver sometime in 2025, get to our share to be in line with our industry share. So of course it's limited at this point by our production ramp, but we are really on a very good trajectory there. So we feel very confident with our product, with our production ramp, and with share opportunities. And frankly our HBM3E product is getting premium in the industry as well versus other products. So it just puts us on a good trajectory ahead as well.

Speaker Change: and we are pretty confident that with our product, with our yield ramp and with the

Speaker Change: Vivek, Deliver sometime in 2025, get to our share to be in line with our industry share. So of course.

Speaker Change: Affiliated at this point by our production ramp.

Speaker Change: And but we are really on a very good trajectory there, so we feel very confident.

Speaker Change: with the product and the production ramp and with share opportunities and frankly our HM-3E product is getting premium in the industry as well versus other products. So it just puts us in a good trajectory ahead as well.

Joseph Moore: Great. Thank you. Congratulations.

Mark Murphy: Thank you.

Satya Kumar: Congratulations.

Operator: Thank you. Our next question comes from the line of Vivek Arya from Bank of America Securities. Your question please.

Speaker Change: [inaudible]

Speaker Change: Thank you for the presentation.

Speaker Change: Thank you, and our next question comes from a line of Vivek Arya from Bank of America's Curities.

Sanjay Mehrotra: Thanks for taking my questions. I had two as well. Sanjay, on that same topic of HBM, there is some concern about the potential for HBM oversupply in 2025. Let's say there are three suppliers instead of the two that are right now. Is that something you see, that there is any potential for oversupply? And let's say if you take the other scenario where there continue to be only two suppliers of NextGen HBM, do you think the third supplier could flood the market with additional DRAM? Just sort of the reverse of this trade ratio argument. So just curious to hear how you think about the supply-demand dynamics for both traditional DRAM and HBM for next year. So we certainly assume that the third supplier will ultimately succeed in having HBM3E product as well and will have some share in the marketplace as well.

Vivek Arya: Thanks for taking my questions. I had two as well. Sanjay, on that same topic of HBM, there is some concern about the potential for HBM oversupply in 2025. Let's say there are three suppliers instead of the two that are right now. Is that something you see, that there is any potential for oversupply? And let's say if you take the other scenario where there continue to be only two suppliers of NextGen HBM, do you think the third supplier could flood the market with additional DRAM? Just sort of the reverse of this trade ratio argument. So just curious to hear how you think about the supply-demand dynamics for both traditional DRAM and HBM for next year.

Vivek Arya: So, thanks for taking my questions. I have two as well. Sanjay on that same topic of HPM, there is some concern about the potential for...

Speaker Change: HPM Over Supply, in 25 let's say there are three suppliers in sort of the two that are.

Speaker Change: Right now is that something you see that there is any potential for over supply and let's say if you take the other scenario where there continue to be only two suppliers of next year, HBM.

Speaker Change: Do you think the third supplier could flood the market with additional, you know, DRAM, just sort of the reverse of this trade ratio argument. So just curious to hear how you think about the supply demand dynamics for both traditional DRAM and HVM for next year.

Sanjay Mehrotra: So we certainly assume that the third supplier will ultimately succeed in having HBM3E product as well and will have some share in the marketplace as well. You know, again, as I pointed out earlier, with the solid product that we have, our product is sold out through the 2025 timeframe, and we are really well positioned with this product. I think the part that you have to keep in mind is that leading edge supply, as we have mentioned here, is tight. Leading edge supply is tight because industry in the 2022-23 timeframe, with reductions in CapEx and CapEx efficient industry wide transitions to the newer technology nodes, the wafer capacity has come down from the peak levels in meaningful ways.

Speaker Change: So, we certainly assume that the third supplier will ultimately succeed in having HM3E product as well

Sanjay Mehrotra: You know, again, as I pointed out earlier, with the solid product that we have, our product is sold out through the 2025 timeframe, and we are really well positioned with this product. I think the part that you have to keep in mind is that leading edge supply, as we have mentioned here, is tight. Leading edge supply is tight because industry in the 2022-23 timeframe, with reductions in CapEx and CapEx efficient industry wide transitions to the newer technology nodes, the wafer capacity has come down from the peak levels in meaningful ways. So the lower wafer capacity compared to the peak of 2022, as well as the HBM3 to 1 trade ratio, these are the ones that are overall keeping the industry in a tight supply, and tight supply not just for HBM, but also for non-HBM part of the market.

Speaker Change: and Will have some shares in the marketplace as well. And again, as I pointed out earlier, with the solid product that we have, we our product is sold out through 2025.

Speaker Change: Time frame and really a well positioned disorder. I think the part that you have to keep in mind is that leading edge supply, as we have mentioned here, is tight.

Speaker Change: Leading at Supply is tight because industry in 22, 23 timeframe with you know deductions in capates and capates efficient industry in the civil transitions.

Artut: Artut the New Art Technology Nord.

Artut: The Way for Capacity have come down from the peace levels.

So the lower wafer capacity compared to the peak of 2022, as well as the HBM3 to 1 trade ratio, these are the ones that are overall keeping the industry in a tight supply, and tight supply not just for HBM, but also for non-HBM part of the market. So we of course feel very good about our own plans with HBM, and of course we always stay completely focused on managing the mix of our business between non-HBM and HBM and remaining extremely disciplined about CapEx, about our share objectives. We have shared those share objectives about HBM here. Overall, we have said we maintain our DRAM as well as NAND supply share to be stable, and you know this is how we look at the overall market. But when you look at the market trends, it's not just about demand trend on HBM, which is of course growing substantially, becoming more than $25 billion market in 2025. It's also about PC spending. We see that demand for memory in smartphones and PCs as AI-enabled smartphones become bigger and bigger part of the market in the quarters and the years to come.

Artut: in meaningful ways. So the lower way for capacity compared to the peak of 2022, as well as the HBM, 3-1 trade ratio, these are the ones that are overall keeping the industry in a tight supply and tight supply, not just for HBM.

Sanjay Mehrotra: So we of course feel very good about our own plans with HBM, and of course we always stay completely focused on managing the mix of our business between non-HBM and HBM and remaining extremely disciplined about CapEx, about our share objectives. We have shared those share objectives about HBM here. Overall, we have said we maintain our DRAM as well as NAND supply share to be stable, and you know this is how we look at the overall market. But when you look at the market trends, it's not just about demand trend on HBM, which is of course growing substantially, becoming more than $25 billion market in 2025. It's also about PC spending. We see that demand for memory in smartphones and PCs as AI-enabled smartphones become bigger and bigger part of the market in the quarters and the years to come.

Artut: But also for non-HPM part of the market.

Artut: So we of course feel very good about our own plans with HM and of course we always, you know, stay completely focused.

Artut: on managing the mix of our business between non-HPM and HBM and HBM in the remaining, extremely disciplined about capaires, about our share objectives, we have shared those share objectives about HBM here, overall we have said we maintain our DM.

Artut: Evel of Nand,

Artut: Supply Share, to be stable. And, you know, this is how we look at the overall market. But, when you look at the market trends, it's not just about demand trend on HPN, which is of course growing substantially becoming more than 25 million dollar market than 20-25. It's also about...

Pat: Pat's Spring, we see that...

Pat: Demand for memory in smartphones and PCs as AI enable smartphones become bigger and bigger part of the market, you know, in the quarters and years to come.

Sanjay Mehrotra: Of course, customer inventories by spring timeframe in smartphones and PCs for memory get to healthier levels. We see that to be a driver of demand as well to complement the strong data center demand. We are looking at strong momentum not just with HBM. We have talked about multiple billions of dollars of revenue that we target to generate in our fiscal year 2025 from high capacity DRAM modules as well as LP memory in data center. So these are all the elements that point to strong demand trends and demand trends driven by AI in data center, as well as in smartphones and PCs where more and more content is required in an environment where the leading edge supply is today tight.

Of course, customer inventories by spring timeframe in smartphones and PCs for memory get to healthier levels. We see that to be a driver of demand as well to complement the strong data center demand. We are looking at strong momentum not just with HBM. We have talked about multiple billions of dollars of revenue that we target to generate in our fiscal year 2025 from high capacity DRAM modules as well as LP memory in data center. So these are all the elements that point to strong demand trends and demand trends driven by AI in data center, as well as in smartphones and PCs where more and more content is required in an environment where the leading edge supply is today tight.

Pat: and of course customer inventory is by spring time frame in smartphone and PCs for memory get well near levels. We see that to be a driver of demand as well to complement the strong data center demand.

Pat: and we are looking at strong momentum, not just with HBM, we have talked about

Pat: Multiple Billions of Dollars of Levinu, that we...

Pat: Targae to generate in our 6th year 2025.

Pat: from High Capacity.

Pat: D.M. Modules, as well as L.P. Memory in Data Center.

Pat: So, these are all the elements that point to strong demand trends driven by AI.

Pat: In Data Center, as well as in Spotphone and PC, where more and more content is.

Sanjay Mehrotra: I think the opportunity is tremendous, and we see healthy demand-supply balance and a constructive environment for our financial performance in fiscal 2025. That's why we say with confidence that we'll deliver a substantial revenue record in fiscal year 2025 with significant improvement in our profitability as well. Very helpful.

I think the opportunity is tremendous, and we see healthy demand-supply balance and a constructive environment for our financial performance in fiscal 2025. That's why we say with confidence that we'll deliver a substantial revenue record in fiscal year 2025 with significant improvement in our profitability as well.

Pat: and required in an environment where the leading edge supply is today tied. So I think the opportunity is tremendous and we see healthy demand supply balance and the constructive environment for our financial performance.

Pat: in Fiscal 2025 and that's why we say the confidence that we'll deliver the substantial revenue record in Fiscal Year 2025, the significant improvement in our profitability as well.

Vivek Arya: Very helpful. And maybe quick follow up for Mark. Mark, on the Q3 call. I think you were a little more explicit about both industry pricing and your gross margins expanding through fiscal 24. Is that still a useful construct from where you see, from what you see today, or do you think there is a scenario where gross margins or your pricing start to flatten out or even go in the other direction through fiscal 25? What is the operating assumption for fiscal 25 as you see it right now? Thank you.

Satya Kumar: And maybe quick follow up for Mark.

Sanjay Mehrotra: Mark, on the Q3 call. I think you were a little more explicit about both industry pricing and your gross margins expanding through fiscal 24. Is that still a useful construct from where you see, from what you see today, or do you think there is a scenario where gross margins or your pricing start to flatten out or even go in the other direction through fiscal 25? What is the operating assumption for fiscal 25 as you see it right now?

Speaker Change: and maybe quick to follow up.

Speaker Change: Tomark, Mark on the Q3 call, I think you were a little more explicit about both.

Mark Murphy: Industry pricing and your gross margin expanding through fiscal.

Speaker Change: 25, is that still a useful contract from where you see from what you see today, or do you think there is a scenario where gross margin or your pricing start to flatten out or even go in the other direction through Cisco 25? What is the operating assumption for Cisco 25 as you see it right now? Thank you.

Operator: Thank you.

Mark Murphy: Maybe just following up here to draw on Sanjay's comments. I mean, we see a very positive setup in fiscal 2025, and so have said substantial revenue record, significantly improved profitability. The supply demand setup is quite good. The market's leading edge is very tight. As we've talked about, the industry wafer capacity has come down, and so, you know, and HBM of course has, you know, creating supply constraints in the marketplaces as share bets increase. So, you know, we still see that the supply and demand environment is healthy through the year. We also are constructive for the year. We also see the trend; we've talked about that our volume is increasingly moving to support higher value add products with our differentiated portfolio. So HBM, high capacity DIMMs, more LP, and then our NAND SSD for data center portfolio products.

Speaker Change: I'd make, maybe just following up here again.

Speaker Change: Dron Sanjay's comments, I mean we see a very positive setup in fiscal 25 and so had said substantial revenue record.

Speaker Change: Suga-Haskali improved profitability. The supply demand set up is quite good.

Speaker Change: The Markets leading edge is very tight as we've talked about the industry way for capacity has come down and so in HBM of course is

Speaker Change: as creating supply constraints in the marketplace as a share bits increase.

Speaker Change: So, you know, we still see that the supply and the band environment is healthy through the year.

Speaker Change: We also are a constructive for the year. We also see the trend we've talked about that are...

Speaker Change: Vime is increasingly moving to...

Speaker Change: Support Higher Value Ad products with our different J.Porefolio, so HBM, HACIDIM, Smoor LP, and then our Mand SSD for Data Center, Portfolio, products.

Mark Murphy: So I think the, you know, the margin expansion through the year, supported by those elements and continued good cost performance, gives us confidence on a very good year. Thank you.

So I think the, you know, the margin expansion through the year, supported by those elements and continued good cost performance, gives us confidence on a very good year. Thank you.

Speaker Change: So, I think the, you know, the margin expansion through the year supported by those elements and continued good cost performance gives us confidence on, on a, on a very good year.

Operator: Thank you. Our next question comes from the line of Toshiya Hari from Goldman Sachs. Your question please.

Speaker Change: Thank you.

Speaker Change: Thank you, and our next question comes from the line of Tachyahari from Goldman Sachs, your question, please.

Toshiya Hari: Thank you. I had a two-part question on the HBM business. Sanjay, you talked about you all being sold out through calendar 25. I'm curious if there's an opportunity for Micron to present upside or deliver upside to what the plan is currently for 25 or our equipment lead times such that you're essentially capped vis-à-vis what your expectations are today for HBM specifically. And then my second part is on gross margin for HBM. We all understand that the business is accretive to both the corporate average and also relative to DRAM as you look forward into calendar 25 with volumes locked in and pricing locked in. I would assume you've got decent visibility on gross margins. Should we expect HBM gross margins to stay kind of where they are or could they move further up as long as you execute on the yield side.

Speaker Change: Thank you. I had a two-part question on the HBM business. Sanjay, you talked about you all being sold out through calendar 25. I'm curious if there's an opportunity for micron to present upside or deliver upside to what the plan is currently for 25 or...

Speaker Change: or Equipment Lead Time, such that you're essentially capped, vis-a-vis when your expectations are today.

Speaker Change: for HBM specifically, and then my second part is on Gross Margin for HBM. We all understand that the business is a creative to both the corporate average and also relative to DRAM.

Speaker Change: As you look forward into calendar 25, with volumes locked in and pricing locked in, I would assume you've got decent visibility on gross margins, should we expect?

Speaker Change: HBM Gross Margins to stay where they are or could they move further up as long as you execute on the yield side. Thanks.

Mark Murphy: Thanks.

Sanjay Mehrotra: So, regarding part of your question on the upside for HBM in 2025, so again, let me emphasize that we are extremely focused on delivering our goals of getting to our share in HBM to be in line with DRAM share sometime in 2025. Extremely focused on continuing to ramp up our production capacity and yield ramp, which are going well according to our plan. Very pleased with that. So, remaining focused on that. And of course, if there are opportunities to be opportunistic with any upsides, of course we will be capturing those. And you know, those upsides always remain, and we expect to get to mature yields on our HBM in fiscal year 2025. Yields are always an upside opportunity. Productivity of the equipment always can be an opportunity as well.

Speaker Change: So regarding your part of your question on the upside for HBM in 2025.

Speaker Change: So, again let me emphasize that we are extremely focused on delivering our goals of getting to our share.

Speaker Change: and HVM to be in line with D-lam shares sometime in 2025, extremely focused on continuing to ramp up our production capacity and yield ramp which are going well.

Speaker Change: According to our plan, very pleased with that, so remaining focus on that and of course, if there are opportunities to be opportunistic.

Speaker Change: and Varendi Upside, of course, we will be capturing those and those Upside always remain in use. We expect to get to mature use on our HPM in fiscal year 25.

Speaker Change: Yves, always enough side of opportunity, productivity of the equipment, always can be an opportunity as well. So, we will manage our business responsibly.

Sanjay Mehrotra: So, we manage our business responsibly and with total focus on delivering to our goals and maintaining our focus on keeping our HBM commitments to our customers coming through successfully. Now, regarding your questions on gross margin being accretive, yes, we would expect our HBM business to be accretive for our fiscal year 2025. Beyond that, really not providing any further details. And yes, you are right that our volume and pricing for HBM is locked up for 2024 as well as for 2025 timeframe, calendar year 2024 and calendar year 2025.

So, we manage our business responsibly and with total focus on delivering to our goals and maintaining our focus on keeping our HBM commitments to our customers coming through successfully. Now, regarding your questions on gross margin being accretive, yes, we would expect our HBM business to be accretive for our fiscal year 2025. Beyond that, really not providing any further details. And yes, you are right that our volume and pricing for HBM is locked up for 2024 as well as for 2025 timeframe, calendar year 2024 and calendar year 2025.

Speaker Change: and the total focus on delivering to our goals and maintaining our focus on keeping our HM.

Kastmas: Kastmas, you know, commitments, you are customers.

Speaker Change: and coming to the successful team.

Speaker Change: Now regarding your questions on gross margin being excretive, yes, we would expect our HBM business to be excretive for our fiscal year 2025, we beyond that.

Speaker Change: Really not providing any further details and yes, you are right that are volume and pricing for HBM, if logged up for 2024, as well as for 2025 timeframe, calendar year 2024 and calendar year 2025.

Toshiya Hari: Great.

Toshiya Hari: Great. And then as a quick follow up on DRAM industry bit growth, I think you raised your 2024 outlook to high teens and you gave a preliminary 2025 outlook of mid teens. I'm curious, what's driving the decel from 2024 to 2025? Is the 2025 number a supply-constrained number from a demand perspective? Sanjay, you sounded pretty constructive on PCs and smartphones, and obviously the content opportunity, and you remain pretty positive on data center. So I'm just curious, what's driving the expected decel in 2025? Thank you.

Satya Kumar: And then as a quick follow up.

Toshiya Hari: On DRAM industry bit growth, I think you raised your 2024 outlook to high teens and you gave a preliminary 2025 outlook of mid teens. I'm curious, what's driving the decel from 2024 to 2025? Is the 2025 number a supply-constrained number from a demand perspective? Sanjay, you sounded pretty constructive on PCs and smartphones, and obviously the content opportunity, and you remain pretty positive on data center. So I'm just curious, what's driving the expected decel in 2025?

Speaker Change: Great, and that is a quick follow-up on DRM industry, Bitgrowth. I think you raised your 24-out look to high teens, and you gave a preliminary 25-out look of mid-teens. I'm curious what's driving the diesel from 24 to 25? Is the 25 number a supply constraint number? From a demand perspective, Sanjay, you sounded pretty constructive on PCs and smartphones, and obviously the content, opportunity, and you remain pretty positive on data centers. So I'm just curious what's driving the expected diesel in 25?

Mark Murphy: Thank you.

Sanjay Mehrotra: We'll just point. I mean, by the way, we have in the past talked about DRAM CAGR being mid-teens in 2024. We have increased the outlook to high-teens based on the strength in the data center, and 2025 as we look at it. Just keep in mind two factors. One is we are now comparing it to the higher base of 2024, which has gone to high-teens. So that of course impacts the percentage of the 25. And second piece is that as we had noted that smartphone and PCs, which at the end market level are continuing to do fine.

Speaker Change: Thank you. We'll just, I mean, by the way, we have, um...

Speaker Change #100: In the past, talked about DMC, at 20-24, we have increased the outlook to high teams based on the strength.

Speaker Change #101: in the data center and 2025 as we look at it just keep in mind two factors. One is we are now talking.

Speaker Change #101: Companionate to the higher base of 2024, which has gone to high teams, so you know that of course impacts the percentage of the 25 and second piece is that as we are noted that smartphone and PC.

Sanjay Mehrotra: But given the three factors that we have mentioned in our earnings call script, that the customers build some inventory, the sell-in is somewhat less than their sellout in terms of memory, and we have said that by spring of 2025 we expect PC customer inventory levels to get to healthier levels versus now, and these will continue to improve. So that too plays a factor. And of course I would just like to remind you that we have pointed out that overall smartphone and PC unit growth will be occurring in 2025, and of course increasing penetration of AI phones, and second half that acceleration, that growth will be obviously stronger than the first half. So all of these factors are included in our current outlook of 2025 DRAM growth being in mid-teens.

But given the three factors that we have mentioned in our earnings call script, that the customers build some inventory, the sell-in is somewhat less than their sellout in terms of memory, and we have said that by spring of 2025 we expect PC customer inventory levels to get to healthier levels versus now, and these will continue to improve. So that too plays a factor. And of course I would just like to remind you that we have pointed out that overall smartphone and PC unit growth will be occurring in 2025, and of course increasing penetration of AI phones, and second half that acceleration, that growth will be obviously stronger than the first half. So all of these factors are included in our current outlook of 2025 DRAM growth being in mid-teens.

Speaker Change #101: which at the end market level are continuing to do fine, but given for the three factors that we have mentioned in our earnings call script that the customers

Speaker Change #102: Dev Samin Vintori, [inaudible]

Speaker Change #102: The Salin is somewhat less than their cell out in terms of memory and we have said that by spring of 2025.

Speaker Change #102: We expect in PCs, customer inventory levels to get to healthier levels of Earth is now and these will continue to improve. So that two plays a factor and of course I would just like to remind you that we have pointed out that

Speaker Change #102: Overall, smartphone and PC, unit growth will be occurring in 2025 and of course, increasing penetration of AI phones and second half that acceleration that growth will be obviously stronger than the first half.

Speaker Change #102: As all of these factors are fact, you know included in our current outlook of 2025, these ambros being in mid teams.

Sanjay Mehrotra: Let me just point out that previously we had said that HBM we would expect it to be greater than $20 billion opportunity in 2025. We have now said HBM is more than $25 billion opportunity in 2025. So as you know, HBM has a trade ratio of 3 to 1. It takes three times as many wafers to produce the same bits as standard products, the technology nodes. So obviously the growth of HBM also impacts the total bit growth year over year in aggregate.

Let me just point out that previously we had said that HBM we would expect it to be greater than $20 billion opportunity in 2025. We have now said HBM is more than $25 billion opportunity in 2025. So as you know, HBM has a trade ratio of 3 to 1. It takes three times as many wafers to produce the same bits as standard products, the technology nodes. So obviously the growth of HBM also impacts the total bit growth year over year in aggregate.

Speaker Change #103: And let me just point out that previously we had said that HBM, we would expect it to be greater than 20 billion dollar opportunity in 2025.

Speaker Change #103: We have now said HBM is more than 25 billion dollar opportunity.

Speaker Change #103: in 2025. So, as you know, HBM has a trade issue of C1. It takes 3 times as many vapors.

Speaker Change #103: Produced the same business, extended products, the technology nodes. So obviously, the growth of HBM also impacts the total bit growth year over year in aggregate.

Satya Kumar: Thank you.

Toshiya Hari: Thank you.

Operator: Thank you. This does conclude the question and answer session as well as today's program. Thank you ladies and gentlemen for your participation. You may now disconnect. Good day. Sam.

Operator: Thank you. This does conclude the question and answer session as well as today's program. Thank you ladies and gentlemen for your participation. You may now disconnect. Good day.

Speaker Change #104: Thank you.

Speaker Change #105: Thank you and this does conclude the question and answer session as well as today's program. Thank you ladies and gentlemen for your participation. You may now disconnect. Good day.

Speaker Change #105: [inaudible]

Toshiya Hari: Sa.

Speaker Change #105: [inaudible]

Mark Murphy: Sa.

Operator: Thank you for standing by and welcome to Micron's Q4 2024 financial call. This time all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you will need to press star 11 on your telephone. If your question has been answered and you'd like to remove yourself from the queue, simply press star 11 again. As a reminder, today's program is being recorded. And now I'd like to introduce your host for today's program, Satya Kumar, Investor Relations. Please go ahead, sir.

Speaker Change #106: Thank you for standing by and welcome to my cross fourth quarter 2020 4 financial call. At this time, I'm all participants, Aaron, listen only mode. After the speaker's presentation, there will be a question and answer session.

Speaker Change #106: The ask a question during this session, you'll need to press star 1-1 on your telephone.

Satya Kumar: If your question has been answered and you'd like to remove yourself from the queue simply press star one one again. As a reminder, today's program is being recorded and now I'd like to introduce your host for today's program Satya Kumar in faster relations. Please go ahead sir.

Satya Kumar: Thank you and welcome to Micron Technology fiscal fourth quarter 2024 financial conference call. On the call with me today are Sanjay Mehrotra, our President and CEO, and Mark Murphy, our CFO. Today's call is being webcast from our investor relations site at investors.micron.com including audio and slides. In addition, the press release detailing our quarterly results has been posted on the website along with the prepared remarks for this call. Today's discussion of financial results is presented on a non-GAAP financial basis. Unless otherwise specified. A reconciliation of GAAP to non-GAAP financial measures can be found on our website. We encourage you to visit our website at micron.com throughout the quarter for the most current information on the company, including information on financial conferences that we may be attending.

Satya Kumar: Thank you, and welcome to Micron Technologies, Piscal Fourth Quarter 2020 for National Conference.

Speaker Change #107: On the call with me today, Harsh Sanjay Mehrotra, a President and CEO, and Mark Murphy, Sr4. Today's call is being webcast from our investor relations site at investors.ikron.com, including audio and slides.

Speaker Change #108: In addition, the press release detailing or quarterly results have been posted on the website, along with the prepared remarks for this call.

Speaker Change #108: Today's discussion of financial results is presented on a non-gap financial basis, unless otherwise specified. The reconciliation of gapped and non-gap financial measures can be found on a website.

Speaker Change #108: We encourage you to visit our website at micron.com throughout the quarter for the most current information on the company, including information on financial conferences that we may be attending.

Satya Kumar: You can also follow us on Micron Tech. As a reminder, the matters we are discussing today include forward-looking statements regarding market demand and supply, market and pricing trends and drivers, the impact of developing technologies such as AI, product ramp plans and market position, expected capabilities of our future products, our expected results and guidance, and other matters. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from statements made today. We refer you to the documents we filed with the SEC, including our Form 10K, Forms 10Q, and other reports and filings for a discussion of risks that may affect our future results. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements.

Speaker Change #109: You can also follow us on X at my contact.

Speaker Change #109: and the reminder, the matters we are discussing today include forward-looking statements regarding market demand and supply.

Speaker Change #109: Market and pricing trends and drivers.

Speaker Change #109: The impact of developing technologies such as AI, product ramp plans and market position, expected capabilities of our future products, our expected results in guidance and other matters.

Speaker Change #109: These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from statements made today.

Speaker Change #109: We refer you to the documents we've filed with the SEC, including our form 10K, form 10Q and other reports and filings for a discussion of risks that may affect our future results.

Speaker Change #109: Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.

Satya Kumar: We are under no duty to update any of the forward-looking statements to conform these statements to actual results. I'll now turn the call over to Sanjay.

Speaker Change #109: We are under no duty to update any of the forward-looking statements to conform these statements to actual results.

Sanjay Mehrotra: Thank you, Satya. Good afternoon, everyone. Micron delivered a strong finish to fiscal year 2024 with fiscal Q4 revenue at the high end of our guidance range, and gross margins and EPS above the high end of our guidance ranges. In fiscal Q4, we achieved record high revenues in NAND and in our storage business unit. Micron's fiscal 2024 revenue grew over 60%. We expanded company gross margins by over 30 percentage points, and achieved revenue records in data center and in automotive. I'm thankful to all our Micron team members for their focus and execution, which made these results possible. We are entering fiscal 2025 with the strongest competitive positioning in Micron's history. We have leadership 1-beta DRAM and G8 and G9 NAND process technology and leadership products across our end markets.

Speaker Change #109: and now turn the call over to Sanjay.

Sanjay: Thank you Satya, good afternoon everyone.

Sanjay: Microsoft delivered a strong finish to fiscal year 2024 with fiscal Q4-11 U at the high end of our guidance range and gross margins and EPS above the high end of our guidance range is

Sanjay: In fiscal Q4, we achieved record high revenues in demand and in our storage business unit.

Sanjay: Microsoft SQL 2024 revenue grew over 60 percent. We expanded company gross margins by over 30 percentage points and achieved 7 new records in data center and in automotive.

Sanjay: And thanks for all our mics on team members for their focus and execution which made these results possible.

Sanjay: We are entering fiscal 2025 with the strongest competitive positioning in micron history.

Speaker Change #110: We have leadership, one beta dm and g8 and g9, man's process technology and leadership products across our end markets.

Sanjay Mehrotra: Robust data center demand is exceeding our leading-edge node supply and is driving overall healthy supply-demand dynamics. As we move through calendar 2025, we expect a broadening of demand drivers complementing strong demand in the data center. We are making investments to support AI-driven demand, and our manufacturing network is well-positioned to execute on these opportunities. We look forward to delivering a substantial revenue record with significantly improved profitability in fiscal 2025, beginning with our guidance for record quarterly revenue in fiscal Q1. Micron is ramping production of the industry's most advanced technology nodes in both DRAM and NAND. Our 1-beta DRAM, G8, and G9 NAND nodes are ramping in high volume and will become an increasing portion of our mix through fiscal 2025. As a reminder, our G8 NAND node refers to our 232-layer NAND technology node.

Speaker Change #110: Robust data center demand is exceeding our leading edge node supply and is driving overall healthy supply demand dynamics.

Speaker Change #110: As we move through 1225, we expect a broadening of demand drivers, complementing strong demand in the data center.

Speaker Change #110: We are making investments to support AI-driven demand and our manufacturing network, as well positions to execute on these opportunities.

Speaker Change #110: We look forward to delivering a substantial revenue record with significantly improved profitability in fiscal 2020-25. Beginning with our guidance for record quarterly revenue in fiscal Q1.

Speaker Change #110: Micron is ramping production of the industry's most advanced technology nodes in both DRAM and NAND

Speaker Change #110: Our one beta D-Zam and G-8 and G-9 NAND nodes are ramping in high volume, and will become an increasing portion of our mix through fiscal 2025.

Speaker Change #110: As a reminder, our G8NN node refers to our 232 layer NAND's technology node.

Sanjay Mehrotra: Our 1-gamma DRAM pilot production using extreme ultraviolet lithography is progressing well, and we are on track for volume production in calendar 2025. We delivered fiscal 2024 DRAM front-end cost reductions at the high end of the outlook provided at the beginning of the year, and NAND cost reductions were consistent with our forecast. We expect fiscal 2025 DRAM front-end cost reductions excluding HVM to be in the mid- to high single-digit percentage range. We expect fiscal 2025 NAND cost reductions to be in the low- to mid-teens percentage range. We continue to make progress on the construction for our new fab in Idaho and are working with state and federal agencies on the permitting process for our New York site. Construction is underway on our India assembly and test facility as well as our China Xi'an backend expansion.

Speaker Change #110: Our one-gamma DRAM pilot production using extreme Valsa wildlife lithography is progressing well and we are on track for volume production in calendar 2025.

Speaker Change #110: We delivered fiscal 2024, D.R.M. front-end cost reductions at the high-end of the outlook provided at the beginning of the year, and next cost reductions were consistent with our forecast.

Speaker Change #110: We expect fiscal 2025 DRAM front-end cost reductions, excluding HVM to be in the mid to high single digit percentage range.

Speaker Change #110: We expect fiscal 2025 demand cost reductions to be in the low to mid-teens percentage range.

Speaker Change #110: We continue to make progress on the construction for our new fab in Idaho and our working with state and federal agencies on the permitting process for our New York side.

Speaker Change #110: Conception is underway on our India Assembly and test facility, as well as our China Shion back in the expansion.

Sanjay Mehrotra: We are continuously assessing opportunities to manage our manufacturing footprint in a capital efficient manner. Consistent with this strategy, we announced the acquisition of an LCD factory in Taiwan that will be converted to enable DRAM production testing. Micron's proprietary and vertically integrated testing capabilities provide competitive differentiation and enable us to provide high quality products to our customers. Now turning to our end markets, memory is essential to extend the frontier of AI capability. Multiple vectors will drive AI memory demand over the coming years. Growing model sizes and input token requirements, multimodality, multi agent solutions, continuous training, and the proliferation of inference workloads from cloud to the edge. Micron is focused on translating the opportunities from AI demand into value captured for all our stakeholders. Demand from data center customers continues to be strong and customer inventory levels are healthy.

Speaker Change #110: We are continuously assessing opportunities to manage our manufacturing footprint in a capital efficient manner.

Speaker Change #110: Consisting with this strategy, we announce the acquisition of an LCD factory in 5 on that will be converted to enable design production testing.

Speaker Change #110: Microsoft proprietary and vertically integrated testing capabilities provides competitive differentiation and enable us to provide high quality products to our customers.

Speaker Change #110: Now turning to our end markets.

Speaker Change #110: Memory is essential to extend the frontier of AI capability.

Speaker Change #110: Multiple vectors will drive AI memory demand over the coming years, growing model sizes and input token requirements, multi-modality, multi-agent solutions, continuous training and the proliferation of influence workloads from plow to the edge.

Speaker Change #110: Micron is focused on translating the personalities from AI demand into value captured for all our stakeholders.

Speaker Change #111: Demand from data center customers continue to be strong and customer inventory levels are healthy.

Sanjay Mehrotra: Industry server unit shipments are expected to grow in the mid- to high-single-digit percentage range in calendar 2024, driven by strong growth for AI servers as well as low-single-digit percentage range growth for traditional servers. We expect traditional server demand to benefit from a refresh cycle as a single latest generation traditional server can replace multiple older generation servers to provide valuable space, power, and performance improvements to improve data center efficiency. We see increasing DRAM and NAND content both in traditional as well as AI servers. Our mix of data center revenue reached a record level in fiscal 2024, and we expect will grow significantly from here in fiscal 2025. Micron is well positioned in the data center with our portfolio of HBM, high-capacity D5, and LP5 solutions and data center SSD products.

Speaker Change #112: Industry Server Unit shipments are expected to grow in the mid to high single digit, percentage range in calendar 2024, driven by strong growth for AI servers as well as low single digit percentage range growth for traditional servers.

Speaker Change #112: We expect traditional server demands to benefit from a refreshed cycle as a single latest generation traditional server can replace multiple older generation servers to provide valuable space power and performance improvements to improve data center efficiency.

Speaker Change #112: We see increasing DRAM and then content both in traditional as well as AI servers.

Speaker Change #112: Our makes of data center revenue reached a record level in fiscal 2024 and we expect will grow significantly from here in fiscal 2025.

Micron: Micron is well positioned in the data center with our portfolio of HPM, High capacity D5 and LP5 solutions and data center SSD products.

Sanjay Mehrotra: We expect each of these three product categories to deliver multiple billions of dollars in revenue in fiscal 2025. In HBM, we are making excellent progress on our yield and output capability. In fiscal Q4, we delivered on our expected volumes and achieved our objective of several hundred millions of dollars in revenue from HBM in fiscal year 2024. Even as our DRAM gross margins improved, our fiscal Q4 HBM gross margins were accretive to both company and DRAM gross margins, indicative of our solid HBM yield ramp. We expect to achieve HBM market share commensurate with our overall DRAM market share sometime in calendar 2025. We expect the HVM TAM to grow from approximately $4 billion in calendar 2023 to over $25 billion in calendar 2025 as a percent of overall industry DRAM bits.

Micron: We expect each of these three product categories to deliver multiple billions of dollars in revenue in fiscal 2025.

Micron: In HVM, we are making excellent progress on our yield and output capability.

Micron: In fiscal Q4, we delivered on our expected volumes and achieved our objective of $700 million of dollars in revenue from HBM in fiscal year 2024.

Micron: Even as our DRAM gross margins improved, our fiscal Q4HBM gross margins were excretive to both company and DRAM gross margins, indicative of our solid HBM yield ramp.

Micron: We expect to achieve HTML Market Share, Commence Rate with our overall Deeram Market Share, sometime in calendar 2025.

Micron: We expect the HMN Tam to grow from approximately $4 billion in calendar 2023 to over $25 billion in calendar 2025.

Sanjay Mehrotra: We expect HBM to grow from 1.5% in calendar 2023 to around 6% in calendar 2025. We have a robust roadmap for HBM and are confident we will maintain our time to market technology and power efficiency leadership with HBM4 and HBM4E. During the quarter, Micron started shipments of production capable HBM3E 12-high 36 GB units to key industry partners to enable qualifications across the AI ecosystem. Remarkably, Micron's HBM3E 12-high 36 GB delivers 20% lower power consumption than our competitors' HBM3E 8-high 24 GB solutions while providing 50% higher DRAM capacity. We expect to ramp our HBM3E 12-high output in early calendar 2025 and increase the 12-high mix in our shipments throughout 2025. As we have said before, our HVM is sold out for calendar 2024 and 2025 with pricing already determined for this time frame.

Micron: As a percent of overall industry D-Rambeth, we expect HBM to grow from 1.5% in calendar 2023 to around 6% in calendar 2025.

Micron: We have a robust roadmap for HBM and our confidence we will maintain our time to market, technology and power efficiency leadership with HBM4 and HBM4E.

Speaker Change #113: During the quarter, Microsoft started shipments of production capable HPM-3E, 12 high 36GB units to key industry partners to enable qualifications across the AI ecosystem.

Speaker Change #113: The Markably, Microsoft HVM 306 gigabytes delivers

Speaker Change #113: 20% lower power consumption than our competitors, HBM-3E, H-I-24 gigabyte solutions.

Speaker Change #113: While providing 50% higher denam capacity.

Speaker Change #113: We expect to ramp our HM3E 12-high output in early calendar 2025 and in trees that 12-high mix in our shipments throughout 2025.

Speaker Change #113: As we have said before, our HVM is sold out for calendar 2020-24 and 2025, with pricing already determined for this time flame.

Sanjay Mehrotra: In calendar 2025 and 2026, we will have a more diversified HVM revenue profile as we have won business across a broad range of HBM customers. With our industry-leading HBM3E solution, we see strong demand for our high-capacity D5 and LP5 solutions. We are seeing increasing adoption of our high-capacity mono die-based 128 GB D5 DIMM products. We are leveraging our innovative industry-leading LP5 solutions to pioneer the adoption of low power DRAM for servers in the data center. Micron's LP5 is specifically designed with data center and AI applications in mind, offering unique features for enhanced reliability, availability, and serviceability, or RAS, in a server platform. We are focused on LPDDR design innovation to optimize the capacity, power, and system reliability requirements of AI server infrastructure.

Speaker Change #113: In calendar 225 and 226, we will have a more diversified HBM-7 you profile. As we have one business across a broad range of HBM customers, with our industry leading HBM-3E solution.

Speaker Change #113: We see strong demand for our High Capacity D5 NLP5 Solutions.

Speaker Change #113: We are seeing increasing adoption of our high capacity monodivates 128 GBD-5DM products.

Speaker Change #113: We are leveraging our innovative industry leading LP-5 solutions to pioneer the adoption of low-power DM for servers in the data center.

Microsoft: We have focused on LPDDR design innovation to optimize the capacity, our in system reliability requirements of AI server infrastructure.

Sanjay Mehrotra: Data center SSD demand continues to be driven by strong growth in AI as well as a recovery in traditional compute and storage. Our strategy to use greater levels of vertical integration including Micron design controllers and firmware has resulted in a data center SSD portfolio that addresses customer requirements for a robust set of features and functionality, competitive total cost of ownership, and industry-leading performance and quality. We have gained substantial share in data center SSDs as a result. We achieved a quarterly revenue record with over $1 billion in revenue and data center SSDs in fiscal Q4, and our fiscal 2024 data center SSD revenues more than tripled from a year ago.

Microsoft: Data Center FSD demand continues to be driven by strong growth in AI, as well as a recovery in traditional compute and storage.

Microsoft: Our strategy to use greater levels of vertical integration, including Microsoft Design, Consolors and Funware, has resulted in a data center SSD portfolio that addresses customer requirements for the robust set of features and functionality.

Microsoft: Competitive Total Costs of Ownership and Industry Leading Performance and Quality.

Microsoft: We have gained substantial share in data-central SSDs as a result.

Microsoft: We achieved the quarterly revenue record with over a billion dollars in revenue and data center DSLDs, in fiscal Q4, and our fiscal 2024 data center DSLD revenue more than triples from a year ago.

Sanjay Mehrotra: Turning to PC as discussed in our last earnings call, PC customers have built inventories due to the rising memory price trajectory, anticipated growth in AI PCs, as well as an expectation of tight supply caused by an increasing portion of production output being dedicated to meeting the growing data center demand. A sell-through of PCs continues at a steady pace with a seasonal increase in H2 2024. We expect healthier inventories at PC OEMs by spring 2025. PC unit volumes remain on track to grow in the low single-digit range for calendar 2024. We expect unit growth to continue in 2025 and accelerate into H2 2025 as the PC replacement cycle gathers momentum with the rollout of next-gen AI PCs and end of support for Windows 10 and the launch of Windows 12.

Microsoft: Turning to PC.

Microsoft: As discussed in our last learnings call, PC customers have built inventories due to the rising memory-priced trajectory and dissipated growth in AI PC, as well as an expectation of tight supply, caused by an increasing portion of production output being dedicated to meeting the growing data center demand.

Microsoft: Asselsu of PC is continued at a steady pace with a seasonal increase in second half of calendar 2024. We expect healthier inventories at PC OEMs by Spring 2025.

Microsoft: PC Unit Volumes remain on track to grow in the low single digit range for calendar 2024.

Sanjay Mehrotra: The PC market is in the early stages of a transformation, and we expect a significant shift towards AI-driven functionalities that promise to enhance user experiences and productivity. AI PCs require a higher capacity of memory and storage. As an example, leading PC OEMs have recently announced AI-enabled PCs with a minimum of 16 GB of DRAM for the value segment and between 32 to 64 GB for the mid and premium segments versus an average content across all PCs of around 12 GB last year. Micron is well positioned to support the growth of AI PCs with our portfolio of client LPDRAM, DRAM, and SSD products. Our Low Power Compression Attached Memory Module or LPCAM2 product has had multiple design wins at leading PC OEMs.

Microsoft: The PC market is in the early stages of a transformation and we expect a significant shift towards AI-driven functionalities that promise to enhance user experiences and productivity.

Microsoft: Air PC requires a higher capacity of memory and storage.

Speaker Change #114: As an example, leading PC OEMs have recently announced AI-enable PCs with a minimum of 16 gigabytes of D-NAM for the value segment.

Speaker Change #114: and between 32-64 Gigabyte for the mid and premium segments, versus an average content across all PCs of around 12 Gigabyte last year.

Micron: Micron is well positioned to support the growth of AI PCs, with our portfolio of clients, LP DRAM, DRAM and FSD products.

Micron: Our low power compression attached, memory module or LCKM2, product has multiple design grants at leading PCOEMs.

Sanjay Mehrotra: These modules offer all the benefits of low power DRAM in an upgradable form factor compared to the alternative modular D5 based solutions. LPCAM2 provides up to 60% lower power and up to 70% better performance along with 60% space savings. Our 3500 Client SSD is qualified at all the major PC OEMs and provides the power performance enhancements needed for AI workloads. Turning to mobile smartphone customer inventory dynamics, they are evolving in a manner somewhat similar to that of PC customer customers. Smartphone unit volumes in calendar 2024 are on track to grow in the low to mid single digit percentage range, and we expect unit growth to continue in 2025. Smartphone OEMs are seeking to differentiate their devices by incorporating more AI features such as personalized recommendations, improved camera functionalities, and smarter voice assistants.

Micron: These modules offer all the benefits of low power DM in an upgradable form factor.

Micron: Compared to the Alternative Modular D5-based Solutions, LPKM2 provides up to 60% lower power and up to 70% better performance, along with 60% space savings.

Micron: Our 3,500 client SSD is qualified at all the major PCOMs and provides the power performance enhancements needed for AI workloads.

Speaker Change #115: Turning to Mobile.

Speaker Change #115: Smartphone Customer in Meturi Dynamics are evolving in a manner somewhat similar to that of PC customers.

Speaker Change #116: Smartphone Unit Volumes and Calendar 2024 are on track to grow in the low to mid-singual digit percentage range and we expect unit growth to continue in 2025.

Speaker Change #116: Smartphone Williams are seeking to differentiate their devices by incorporating more AI features such as personalized recommendations, improved camera functionality, and smarter voice assistance.

Sanjay Mehrotra: Recently, leading Android smartphone OEMs have announced AI-enabled smartphones with 12 to 16 GB of DRAM versus an average of 8 GB in flagship phones last year. Micron is well positioned to support the growth of AI smartphones with our leading-edge memory and storage products. During the quarter we extended our product leadership with the first customer qualification of our second generation 1-beta-based LP5X DRAM and second generation of G8 NAND UFS 4.0 products in the automotive market. Infotainment and ADAS are driving long-term memory and storage content growth for the fourth consecutive year. Micron achieved a fiscal year record for automotive revenue in 2024. Micron has built an industry-leading portfolio of automotive-grade DRAM and NAND products that provide best-in-class solutions for these high-growth applications. Leveraging our technology and product leadership, top quality rankings, and close customer collaborations.

Speaker Change #117: Recently, leading Android smartphone OEMs have announced AI enabled smartphones, with 12-16 gigabytes of DRAM versus an average of 8 gigabytes in flagship phones last year.

Microsoft: Microsoft is well positioned to support the growth of AI smart phones with our leading-age memory and storage products.

Speaker Change #118: During the quarter, we extended our product leadership with the first customer qualification of our second generation 1 beta based LP5 SDNAM and second generation of G8NAND UFS 4.0 products.

Speaker Change #118: In the automotive market, infotainment and ADF are driving long-term memory and storage content growth.

Speaker Change #118: For the fourth consecutive year, Micron achieved a fiscal year record for automotive revenue in 2024.

Speaker Change #118: [inaudible]

Micron: Machon has built an industry leading portfolio of automotive, great, DRAM and nan products that provide best in-class solutions for these high-growth applications, leveraging our technology and product leadership, top quality rankings, and close customer collaborations.

Sanjay Mehrotra: During the quarter, we achieved qualification of our 1-beta based 16 Gb DDR5 with 9.6 Gb per second speed for the automotive market, which will support the increased performance requirements driven by AI both in the digital cockpit and ADAS. The automotive industry continues to adjust the mix of EV, hybrid, and traditional vehicles to meet evolving customer demand. As auto customer inventories adjust to this new mix, we expect a resumption in our automotive growth in the second half of fiscal 2025. Now turning to our market outlook, calendar 2024 DRAM industry demand outlook has improved driven by strength in data center servers, and growth in the other market segments have performed consistent with our prior market commentary. Hence, we have upgraded our expectation for calendar 2024 industry DRAM bit demand growth to now be in the high teens % range.

Micron: During the quarter, VHE's qualification of our 1 Beta based 16 Gigabit LP5 with 9.6 Gigabit per second speed for the automotive market, which will support the increased performance requirements driven by AI, both in the digital cockpit and ADF.

Micron: The automotive industry continues to address the mix of EV, hybrid and traditional vehicles to meet evolving customer demands.

Micron: As auto customer inventories adjusts to this new mix, we expect a resumption in our automotive growth in the second half of fiscal 2025.

Micron: Now, turning to our market outlook.

Micron: 124DM industry demand outlook has improved, driven by strength in data center servers and growth in the other market segments has performed consistent with our prior market commentary.

Micron: Hence, we have upgraded our expectation for calendar 2020-24 in the 3D Ram Bich Devan grow to now be in the high teams percentage range.

Sanjay Mehrotra: Our expectation for calendar 2024 industry NAND bit demand growth remains in the mid-teens percentage range in calendar 2025. We expect both DRAM and NAND industry bit demand growth to be around the mid-teens percentage range. Turning to supply. Constructive industry conditions will help drive the considerable improvements in profitability and ROI that are needed to enable the investments required to support future growth due to CapEx and supply reduction actions taken across the industry in 2023. We expect industry wafer capacity in both DRAM and NAND in 2024 to be below 2022 peak levels, and for NAND meaningfully so. This factor, combined with the increasing mix of HBM wafers, is reducing DRAM supply allocated to traditional products and contributing to the healthy industry supply demand environment that we expect for DRAM in calendar 2025.

Micron: Our expectation for calendar 2024 in the sweet Nandbed demand growth remains in the mid-steeling percentage range.

Micron: In calendar 2025, we expect both DM and Nand industry best demand growth to be around the mid-teens percentage range.

Micron: Turning to Supply.

Micron: Constructive Industry Conditions will help drive the considerable improvements in profitability and ROI that are needed to enable the investments required to support future growth.

Micron: Due to capex and supply deduction action taken across industry in 2023, we expect industry wafer capacity in both DRAM and NAND in 2024 to be below 2022 peak levels and for NANDs

Micron: This factor combines with the increasing mix of HVN vapors, is reducing denam supply allocated to traditional products and contributing to the healthy industry supply demand environment that we expect for DRAM in calendar 2025.

Micron: Given the significant reduction in industry-wafer capacity in manned, and the ongoing low-maned capex environment, we also expect a healthy industry-supply demand environment for manned in calendar 2025.

Micron: Manish Technology Transitions generally provide more growth in animalized bits, or wafer compared to the man's bit demand category expectation of high teams.

Micron: Consequently, we anticipate longer periods between industry technology transitions and moderating capital investment over time to align industry supply with demand.

Micron: This can reduce both, or in the experience growth and capital intensity in manned over time, which can contribute to the improved financial health of the manned industry.

Speaker Change #119: Microsoft invested 8.1 billion dollars in CapX in fiscal 2020-24.

Speaker Change #120: We expect fiscal 2020-25 Kaffax to be meaningfully higher, and at around mid-30s, percentage range of living you based on our current Kaffax and living you expectations.

Sanjay Mehrotra: The growth in both greenfield fab construction and HBM CapEx investments is projected to make up the overwhelming majority of the year-over-year CapEx increase. As a reminder, our investments in facility and construction in Idaho and New York will support our long-term demand outlook for DRAM and will not contribute to bit supply in fiscal 2025 and 2026. Micron will continue to exercise supply and CapEx discipline and focus on improving profitability, including walking away from less profitable business while still maintaining our overall bit market share for DRAM and NAND. I will now turn it over to Mark for our financial results and outlook.

Speaker Change #120: The growth in both green field, staff construction and HPM capex in websites.

Speaker Change #120: It's projected to make up the overwhelming majority of the year over year capex increase.

Speaker Change #120: As a reminder, our investments in fertility and construction in Idaho, and New York, will support our long-term demand outlook for DMM and will not contribute to bit supply in fiscal 2025 and 2020.

Speaker Change #121: My son will continue to exercise supply and cap extra discipline and focus on improving profitability, including walking away from less profitable business while still maintaining our overall bit market share for DM and NAND.

Speaker Change #121: I will now turn it over to Mark for our financial results and outlook.

Mark Murphy: Thank you, Sanjay, and good afternoon, everyone. In fiscal Q4, Micron delivered revenue at the high end of the guidance range and gross margin and EPS above the high end of the guidance ranges. We are exiting the fiscal year with excellent momentum, having expanded our industry-leading product portfolio, executed well on pricing, and improved our financial performance significantly from the start of the year. Total fiscal Q4 revenue was approximately $7.8 billion, up 14% sequentially and up 93% year over year. Fiscal 2024 total revenue was $25.1 billion, up 62% year over year. Fiscal Q4 DRAM revenue was $5.3 billion, up 93% year over year, and represented 69% of total revenue sequentially. DRAM revenue increased 14% with flattish bit shipments and prices increasing in the mid-teens percentage range.

Mark Murphy: Thank you, Sanjay and good afternoon, everyone.

Mark Murphy: In Fiscal Q4, Micron delivered revenue at the high end of the guidance range and gross margin and EPS above the high end of the guidance ranges.

Mark Murphy: Total Fiscal Q4 revenue was approximately $7.8 billion, up 14% sequentially and up 93% year over year.

Mark Murphy: fiscal 2024 total revenue was $25.1 billion, up 62% year over year.

Mark Murphy: Let's go to for DRAM revenue was $5.3 billion, up 93% year over year, and represented 69% of total revenue.

Speaker Change #122: So, quenchily, DRAM revenue increased 14%, with flat-ish fit shipments and prices increasing in the mid-teens percentage range.

Mark Murphy: For the fiscal year, DRAM revenue increased 60% year over year to $17.6 billion, representing 70% of total revenue. Fiscal Q4 NAND revenue was $2.4 billion, up 96% year over year, and represented 31% of Micron's total revenue. NAND revenue increased 15% sequentially with bit shipments increasing in the high single digit percentage range and prices increasing in the high single digit percentage range. Fiscal Q4 NAND revenue was a new quarterly record for Micron. For the fiscal year, NAND revenue increased 72% year over year to $7.2 billion, representing 29% of total revenue. Now turning to revenue by business unit, Compute and Networking Business Unit revenue was $3 billion, up 17% sequentially. Data center server DRAM achieved a quarterly revenue record in fiscal Q4 driven by strong demand for high capacity solutions as well as our continued ramp of HBM.

Speaker Change #122: For the fiscal year, DRAM revenue increased 60% year over year to $17.6 billion, representing 70% of total revenue.

Speaker Change #122: fiscal acute for an and revenue was $2.4 billion, up 96% year over year, and represented 31% of Micron's total revenue.

Speaker Change #122: Man revenue increased 15% sequentially, with betchettments increasing in the high single digit percentage range, and prices increasing in the high single digit percentage range.

Speaker Change #122: Pisco 2-4 Nandravenu was a new quarterly record for Micron.

Speaker Change #122: For the fiscal year, NAND revenue increased 72% year over year to $7.2 billion, representing 29% of total revenue.

Speaker Change #122: Now turning to revenue by business student.

Speaker Change #122: Compute and networking business unit revenue was $3 billion, up 17% sequentially.

Speaker Change #122: Data Center Server, DRAM, achieved the quarterly revenue record in fiscal Q4.

Speaker Change #122: driven by strong demand for high-capacity solutions, as well as our continued ramp of HBM.

Speaker Change #122: Revenue for the Mobile Business Unit was $1.9 billion.

Speaker Change #122: Up 18% sequentially driven by seasonal product ramps.

Speaker Change #122: revenue for the storage business unit was $1.7 billion.

Speaker Change #122: Up 24% sequentially and led by Data Center SSD.

Speaker Change #122: which reached the quarterly revenue record.

Speaker Change #122: We achieved record high revenue for fiscal year 2024 for our NAND storage business.

Speaker Change #122: and Vetted Business Jr. revenue is $1.2 billion, down 9% sequentially.

Speaker Change #122: In fiscal 2024, the automotive segment achieved a new fiscal year revenue record for the fourth consecutive year.

Speaker Change #122: The consolidated gross margin for fiscal Q4 was 36.5 percent, improving over 8 percentage points sequentially.

Speaker Change #122: Fire pricing and improved product mix for the key drivers of the stronger profitability.

Speaker Change #122: For the fiscal year, consolidate a gross margin was 23.7%.

Mark Murphy: Operating expenses in fiscal Q4 were $1.081 billion, up $105 million sequentially due to an increase in R&D program expenses for the fiscal year. Operating expenses were $4 billion, up 11% year over year. The increase in fiscal 2024 operating expenses was primarily driven by an increase in R&D investments and reinstatement of short-term incentive compensation. We generated operating income of $1.7 billion in fiscal Q4, resulting in an operating margin of approximately 23%, which was up 9 percentage points sequentially and up 53 percentage points from a year ago. Quarter fiscal 2024 operating income was $1.9 billion, resulting in an operating margin of approximately 8%, which was up 39 percentage points year over year. Fiscal Q4 adjusted EBITDA was $3.7 billion, resulting in an EBITDA margin of 48%, up 5 percentage points sequentially and up 30 percentage points from the year ago.

Speaker Change #122: Up over 31 percentage points to you over year.

Speaker Change #122: Operating expenses in fiscal Q4 were $1 billion, $81 million.

Speaker Change #122: Dollars, a $105 million sequentially due to an increase in R&D program expenses.

Speaker Change #122: Fiscal 2024 operating income was $1 9 billion.

Speaker Change #122: Resulting in an operating margin of approximately 8%.

Speaker Change #122: Which was up 39 percentage points year over year.

Speaker Change #122: Fiscal Q4, adjusted EBITDA was $3 $7 billion, resulting in an EBITDA margin of 48% up five percentage points sequentially and up 30 percentage points from the year ago quarter.

Mark Murphy: Quarter fiscal 2024 EBITDA was $9.7 billion, resulting in an EBITDA margin of over 38%, which was up 20 percentage points year over year. Fiscal Q4 taxes were $387 million and higher than our guide, largely due to a shift in the jurisdictional mix of earnings. Fiscal 2024 taxes were $379 million, or approximately 20% of pre-tax income. Non-GAAP diluted earnings per share in fiscal Q4 was $1.18 compared to $0.62 per share in the prior quarter and a loss per share of $1.07 in the year ago quarter. Fiscal Q4 Non-GAAP EPS exceeded the high end of our guidance range driven by better pricing and profitability. Fiscal 2024 Non-GAAP EPS was $1.30. Turning to cash flows and capital spending, our operating cash flows were $3.4 billion in fiscal Q4, representing 44% of revenue.

Speaker Change #122: Fiscal 2024, EBITDA was $9 7 billion.

Speaker Change #122: Resulting in an EBITDA margin of over 38%, which was up 20 percentage points year over year.

Speaker Change #122: Fiscal Q4 taxes were $387 million and higher than our guide largely due to a shift in the jurisdictional mix of earnings.

Speaker Change #122: Fiscal 2020 for taxes were $379 million or approximately 20% of pre tax income.

Speaker Change #122: Yeah.

Speaker Change #122: non-GAAP diluted earnings per share in fiscal Q4 was $1 18.

Speaker Change #122: Compared to 62 per share in the prior quarter and a loss per share of $1 seven in the year ago quarter.

Speaker Change #122: Fiscal Q4, non-GAAP EPS exceeded the high end of our guidance range, driven by better pricing and profitability.

Speaker Change #122: Fiscal 2024, non-GAAP EPS was $1 30.

Speaker Change #122: Turning to cash flows and capital spending our operating cash flows were $3 4 billion in fiscal Q4, representing 44% of revenue.

Mark Murphy: For the fiscal year, we generated $8.5 billion of operating cash flows representing 34% of revenue. Capital expenditures were $3.1 billion during the quarter. CapEx totaled $8.1 billion for the fiscal year, up from $7 billion in fiscal 2023. We generated $323 million of free cash flow for the quarter and $386 million for the fiscal year. As announced in early August, we determined that share repurchases may resume in light of improved conditions. As such, with our return to free cash flow, reduced leverage, and long-term positive outlook, we saw an opportunity to repurchase shares in the quarter. In fiscal Q4, we repurchased $300 million or 3.2 million shares at an average price of $93.07 per share. Micron's fiscal Q4 ending inventory was $8.9 billion or 158 days, up three days from the prior quarter.

Speaker Change #122: For the fiscal year, we generated $8 5 billion of operating cash flows representing 34% of revenue.

Speaker Change #122: Capital expenditures were $3 $1 billion during the quarter.

Speaker Change #122: Capex totaled $8 $1 billion for the fiscal year up from $7 billion in fiscal 2023.

Speaker Change #122: We generated $323 million of free cash flow for the quarter and $386 million for the fiscal year.

Speaker Change #122: As announced in early August we determine that share repurchases may resume in light of improved conditions.

Speaker Change #122: As such.

Speaker Change #122: With our return to free cash flow reduce leverage and long term positive outlook.

Speaker Change #122: We saw an opportunity to repurchase shares in the quarter.

Speaker Change #122: In fiscal Q4, we repurchased $300 million or $3 2 million shares at an average price of $93 seven per share.

Speaker Change #122: Micron's fiscal Q4, ending inventory was $8 $9 billion or 158 days.

Speaker Change #122: Three days from the prior quarter.

Speaker Change #122: Micron continues to exercise pricing discipline, and expect a healthy supply demand environment and the industry in fiscal 2025.

Speaker Change #122: We intend to draw down our inventory to support our revenue growth in fiscal 2025.

Speaker Change #122: On the balance sheet, we held $9 2 billion of cash and investments at quarter end and maintain near 11 $7 billion of liquidity, when including our untapped credit facility.

Sanjay Mehrotra: We.

Mark Murphy: Ended the quarter with $13.4 billion in total debt, low net leverage, and a weighted average maturity on our debt of 2031. We are committed to further strengthening our balance sheet and sustaining our investment grade credit rating. Now turning to our outlook for the fiscal first quarter, fiscal Q1 gross margin is projected to improve sequentially primarily on better pricing, and portfolio mix. Recall that in fiscal Q4 HBM remained accretive to both DRAM and overall company gross margins. We project changes in our portfolio mix to continue to be an important and favorable contributor to gross margins over time. We forecast operating expenses to be flat to slightly up in the fiscal first quarter compared to fiscal fourth quarter levels. For the full fiscal year 2025, we see operating expenses growing by a mid-teens percentage versus fiscal 2024.

Speaker Change #122: We ended the quarter with $13 4 billion and total debt low net leverage and a weighted average maturity on our debt of 2031.

Speaker Change #122: We are committed to further strengthening our balance sheet and sustaining our investment grade credit rating.

Speaker Change #122: Now turning to our outlook for the fiscal first quarter.

Speaker Change #122: Fiscal Q1 gross margin is projected to improve sequentially, primarily on better pricing and portfolio mix.

Speaker Change #122: Recall that in fiscal Q4, HBM remains accretive to both DRAM and overall company gross margins.

Speaker Change #122: We project changes in our portfolio mix to continue to be an important and favorable contributor to gross margins over time.

Speaker Change #122: We forecast operating expenses to be flat to slightly up in the fiscal first quarter compared to fiscal fourth quarter levels.

Speaker Change #122: For the full fiscal year 2025, we see operating expenses growing by a mid teens percentage versus fiscal 2024.

Mark Murphy: Growth in operating expenses is planned to be second-half weighted as we ramp necessary R&D program investments, including for HBM, to capture the substantial growth opportunity ahead. For fiscal Q1 and fiscal 2025, we estimate our non-GAAP tax rate to be in the mid-teens % range. We project days of inventory outstanding to decline in fiscal 2025 and for DIO to approach our target by the end of fiscal 2025. In fiscal Q1, we forecast capital expenditures to increase sequentially to approximately $3.5 billion. As Sanjay mentioned, we expect fiscal 2025 CapEx to be around mid-30s % range of revenue. Based on our current CapEx and revenue expectations, we remain circumspect with all capital spending and disciplined with WFE investments in order to grow fab supply in line with industry demand. With all these factors in mind, our non-GAAP guidance for fiscal Q1 is as follows.

Growth in operating expenses is planned to be second half weighted as we ramp necessary R&D program investments, including for <unk> to capture the substantial growth opportunity ahead.

Speaker Change #122: For fiscal Q1 in fiscal 2025, we estimate our non-GAAP tax rate to be in the mid teens percent range.

Speaker Change #122: We project days of inventory outstanding to decline in fiscal 2025 and for <unk> to approach our target by the end of fiscal 2025.

Speaker Change #122: In fiscal Q1, we forecast capital expenditures to increase sequentially to approximately $3 5 billion.

Speaker Change #122: As Sanjay mentioned, we expect fiscal 2025 capex to be around mid <unk> percentage range of revenue based.

Sanjay: Based on our current Capex and revenue expectations.

Sanjay: We remain circumspect with all capital spending and disciplined with Wi Fi investments in order to grow spit supply in line with industry demand.

Sanjay: With all these factors in mind, our non-GAAP guidance for fiscal Q1 is as follows.

Mark Murphy: We expect revenue to be $8.7 billion ± $200 million, gross margin to be in the range of 39.5% ± 100 basis points, and operating expenses to be approximately $1,085,000,000 ± $15,000,000. As mentioned, we expect the fiscal Q1 tax rate to be in the mid-teens percent range. Based on a share count of approximately 1.14 billion shares, we expect EPS to be $1.74 per share ± $0.08. In closing, we remain focused on investing in a disciplined manner to support our growth and maintain stable bit share in DRAM and NAND. Micron is well-positioned to deliver record revenue as well as significantly improve profitability and free cash flow in fiscal 2025. I will now turn it back over to Sanjay.

Sanjay: We expect revenue to be $8, 7 billion, plus or minus $200 million.

Sanjay: Gross margin to be in the range of 39, 5% plus or minus 100 basis points.

Sanjay: And operating expenses to be approximately $1 $85 million.

Plus or minus $15 million.

Sanjay: As mentioned, we expect that fiscal Q1 tax rate to be in the mid teens percent range.

Sanjay: Based on a share count of approximately 114 billion shares we expect EPS to be $1 74 per share.

Sanjay: Plus or minus eight.

Sanjay: In closing we remain focused on investing in a disciplined manner to support our growth and maintain stable bad share in DRAM and NAND.

Sanjay: Micron is well positioned to deliver record revenue as well as significantly improved profitability and free cash flow in fiscal 2025.

I will now turn it back over to Sanjay.

Sanjay Mehrotra: Thank you, Mark. Fiscal 2024 was a year of many records as we discussed earlier, and I expect Fiscal 2025 to be even better. With the advent of AI, we are in the most exciting period that I have seen for memory and storage in my career. Micron's memory and storage innovations are enabling tremendous breakthroughs, transforming how the world uses information to enrich life for all. Micron has sustained multiple generations of technology leadership in DRAM and NAND. Our unique culture and our industry-leading product portfolio combined with our world-class manufacturing execution and quality are enabling us to deliver differentiated high-value solutions across end markets. This has made us the partner of choice for our customers as they plan their long-term roadmaps, and our momentum lays the foundation for an exciting Fiscal 2025. Thank you for joining us today. We will now open for questions.

Sanjay: Thank you Mark fiscal 2024 was a year of many records as we discussed earlier and I expect fiscal 2025 to be even better.

Speaker Change #123: With the advent of AI, we are in the most exciting period that I have seen for memory and storage in my career.

Speaker Change #124: Micron's memory and storage innovations are enabling tremendous breakthroughs transforming how the world uses information to enrich lives for all.

Speaker Change #125: Micron has sustained multiple generations of technology leadership in DRAM and NAND, our unique culture, and our industry, leading product portfolio combined with our world class manufacturing execution and quality at enabling us to deliver differentiated high value solutions across end markets.

Speaker Change #126: <unk> has made us the partner of choice for our customers as they plan their long term road maps and our momentum lays the foundation for an exciting fiscal 2025.

Speaker Change #127: Thank you for joining us today.

We will now open for questions.

Sanjay Mehrotra: Certainly.

Operator: Thank you. Our first question comes from the.

Speaker Change #128: Certainly thank you.

Sanjay Mehrotra: Line.

Our first question comes from the line.

Operator: Of Timothy Arcuri from UBS. Your question, please.

Speaker Change #128: Timothy Arcuri from UBS Your question please.

Mark Murphy: Thanks a lot, Mark. I guess my first question is some of the assumptions and guidance?

Timothy Arcuri: Thanks, a lot Mark I guess my first question is some of the assumptions that guidance I think you've been saying kind of on the conference circuit that bits would be pretty flat.

Sanjay Mehrotra: I think you've been saying kind of.

Mark Murphy: On the conference circuit that bits would be pretty flat in fiscal Q1 for both DRAM and NAND. Is that what you're still assuming? So that most of the increase in the revenue is basically pricing. Is that correct? Tim? What we see now, and we had provided a slight update in August, but we now see that DRAM bits we expect to be up somewhat higher than what we had said before. We had said before they were going to be flat. Then we revised that to flat to slightly up. And in this latest guide we now view DRAM to be up somewhat higher from that. NAND bits we expect to be sequentially flattish. Keep in mind that our guide also contemplates, you know, a healthy supply demand environment and an increasingly favorable mix in the business with HBM, high capacity DIMMs, LP data center SSD.

Speaker Change #130: In fiscal Q1 for both DRAM and NAND is that what you are still assuming so that most of the increase in <unk>.

Speaker Change #130: Revenues basically pricing is that correct.

Yes, Tim.

Mark Murphy: What we see now and we.

Speaker Change #132: <unk> provided a slight update in August, but we now see that.

Mark Murphy: DRAM beds, we expect to be.

Speaker Change #132: Up.

Speaker Change #132: Somewhat higher than what we had said before we had said before there were going to be flat and we revise that.

Speaker Change #132: Flat to slightly up.

Speaker Change #132: In this latest guide we now view.

Speaker Change #132: Ram to be up somewhat higher from that.

Speaker Change #132: NAND bits, we expect to be sequentially flattish.

Speaker Change #133: Yes, keep in mind that our guy.

Speaker Change #134: Yeah also contemplates.

Speaker Change #134: A healthy supply demand environment.

In an increasingly favorable mix in the business with HP.

Speaker Change #134: <unk> high capacity dense LP datacenter SSD, so we see.

Mark Murphy: So we see stronger data center demand and we had indicated that was robust and that's been favorable. And then we're just executing well on our product roadmaps, our product execution, our overall manufacturing execution. Thanks Mark. And then just one last thing, you had said that HBM revenue last quarter in May was a little over $100 million. Can you give us the number in August?

Stronger data center demand.

Speaker Change #134: And we had indicated that was robust and thats been favorable.

Speaker Change #134: And then we're just executing well on our product roadmaps, our product execution or.

Speaker Change #134: Our overall manufacturing.

Execution.

Speaker Change #135: Thanks, Mark and then just one last thing.

Speaker Change #136: <unk> said that HBM revenue last quarter and May was a little over $100 million.

Sanjay Mehrotra: It looks like it was 300, 300.

Speaker Change #137: Can you give us the number in August it was it looks like it was 300.

Mark Murphy: To 350, something like that, is that about right for your HBM revenue in fiscal Q4?

Speaker Change #138: 350, something like that is that about right for your HCM revenue in fiscal Q4.

Sanjay Mehrotra: We are not disclosing a specific revenue.

Speaker Change #139: So we are not disclosing the specific revenue for FQ. Four we had said earlier that we will have $700 million of revenue in fiscal year 'twenty four and we achieved that objective and really very proud of all the execution from our team in terms of putting in place.

Mark Murphy: For.

Sanjay Mehrotra: We had said earlier that we'll have several hundred million dollars of revenue in fiscal year 2024. We achieved that objective and really very proud of all the execution from our team in terms of putting in place the capacity, managing the yield ramp successfully to our goals, and of course continuing to deliver a strong product to our customer base. We're not going to be providing specifics on a quarter by quarter basis, but keep in mind, yes, we delivered several hundred million dollars of revenue in fiscal year 2024 and we look forward to delivering multiple billions of dollars of revenue of HBM in fiscal year 2025.

Speaker Change #139: The capacity managing the yield ramps successfully to our goals and of course, continuing to deliver a strong product.

Speaker Change #139: To our customer base, so not providing we're not going to be providing specifics on a quarter by quarter basis, but keep in mind, yes, we delivered several $100 million of revenue in fiscal year 'twenty four and we look forward to delivering multiple billions of dollars of revenue of HBM in fiscal year 'twenty five.

Mark Murphy: Okay, thank you, Sanjay.

Speaker Change #140: Okay. Thank you Sanjay.

Operator: Thank you. Our next question comes from the line of C.J. Muse from Cantor Fitzgerald. Your question please.

Speaker Change #140: Okay.

Speaker Change #141: Thank you.

Speaker Change #142: And our next question comes from the line of C. J Muse from Cantor Fitzgerald. Your question. Please.

Sanjay Mehrotra: Yeah, good afternoon. Thank you for taking the question. I guess first question, on gross margins, you guided up a robust 300 basis points. Was hoping you could spend a little bit of time kind of walking us through, you know, what's driving that, how much is from like-for-like DRAM, ASP increases, mix, HBM yield improvements, and cost downs. And I guess as you kind of walk through that, can you give us a flavor of how to think about those drivers beyond the November quarter?

Speaker Change #143: Yes. Good afternoon. Thank you for taking the question I guess first question on gross margins you guided up a robust 300 basis points was hoping you could spend a little bit of time kind of walking us through what's driving that how much is from like for like DRAM.

Speaker Change #144: ASP increases mix, HP and yield improvements and cost downs and I guess as you kind of walk through that can you give us a flavor of how to think about those drivers beyond the November quarter.

Mark Murphy: So, C.J., you know, in the Q4 to Q1, you know, as we look at that margin expansion, it's, you know, it's similar to the themes we've talked about before. The supply and supply demand environment is healthy. So we're seeing that play through on, you know, in pricing. We're also seeing, you know, the execution of our product roadmap and the ramp of the higher value products, and that's contributing on costs. We are doing well on cost downs, you know; however, in the first quarter because of the mix with HBM, we are going to see DRAM costs go up slightly, and you know, and that's.

C J: C J.

In the in the fourth the first quarter.

Speaker Change #146: Yes, as we as we look at that margin expansion. It's.

Speaker Change #147: Yes, it's similar to the themes we've talked about before.

The supply them.

Speaker Change #148: <unk> demand environment is healthy so we're seeing that play through.

Speaker Change #147: On.

Speaker Change #147: And pricing.

Speaker Change #147: We're also seeing.

Speaker Change #147: The execution of our product roadmap and the ramp of the higher value products.

Speaker Change #147: And thats contributing.

Speaker Change #147: On costs, we are doing well on cost downs.

Speaker Change #147: Yes.

Speaker Change #147: I ran the first quarter because of the mix with <unk>, we are going to see DRAM.

Speaker Change #149: Costs go up slightly.

And yes and Thats.

Sanjay Mehrotra: You know, so as we.

Mark Murphy: Look forward into the end of the first quarter, you know, things are coming together as we had hoped. You know, tight at the leading edge, good supply demand, you know, favorable pricing environment, and certainly favorable mix, and that becoming a more important part of the business. Good cost execution.

Speaker Change #149: So as we as we look forward.

And at the end of the first quarter.

Speaker Change #149: Yes things are coming together as we had hoped.

Speaker Change #149: Yes tied at the leading edge good supply demand.

Speaker Change #149: Favorable pricing environment.

Speaker Change #149: And certainly favorable mix and that becoming a more important part of the business.

Speaker Change #149: And good cost execution.

Sanjay Mehrotra: Very helpful. And then, I guess, maybe as a follow-up, you've reiterated your CapEx outlook, but obviously the end market environment has changed a bit in the last three months. So, curious if you've changed your prioritization of CapEx at all. Obviously, you talked about a focus on shelves in HBM. Any other change in terms of your spending? Not really. We don't have any other change. I mean, again, continuing to focus our CapEx on HVM investment, which, as you know, is a high-value solution and product tends to be accretive to the margins, and, of course, long-term construction CapEx, and that is construction CapEx that is targeted for longer-term bit growth for the second half of this decade. Thank you.

Speaker Change #150: Very helpful and then I guess, maybe as a follow up.

Speaker Change #151: You've reiterated your capex outlook, but obviously the end market environment has changed a bit in the last three months. So curious if you've changed your prioritization of Capex at all obviously you talked about a focus on shelves in HBM any other change.

Speaker Change #151: In terms of your spending.

Speaker Change #153: Not really we don't have any other teams.

Speaker Change #151: Again.

Speaker Change #154: Do you need to focus our capex on <unk> investment.

As you know is a high value solution and.

Speaker Change #154: Product tends to be accretive to the margins and of course long term construction cap.

Speaker Change #154: Capex and that is.

Speaker Change #155: Yes, construction capex that is targeted for longer term bit growth for the second lateral part of this decade.

Speaker Change #156: Thank you.

Operator: Thank you. And our next question comes from the line of Krish Sankar from TD Cowen. Your question please.

Yes.

Speaker Change #156: Thank you.

Speaker Change #157: And our next question comes.

Speaker Change #158: Comes from the line of Krish Shankar from TD Cowen Your question. Please.

Sanjay Mehrotra: Yeah, I have two questions. One, Sanjay, your AI GPU customers are moving to a one-year cadence for their products, and it looks like the HBM roadmap is also moving to that 12-month from a prior 18-month cadence. Do you think that this puts you and your peers at a yield disadvantage? That is, in other words, as HBM3E yield and gross margin improves, you have to migrate to HBM4, and that new node might come at a lower yield. So I'm just kind of curious how to think about that cadence of HBM progression and how that impacts yield and gross margin, and then add a quick follow-up. As we mentioned, we are doing well with respect to our goals on HBM3E yields with 8-high and in 2025. Of course, we will begin our output in early 2025 with 12-high.

Krish Shankar: Yes, hi, two questions one funding.

Krish Shankar: Youll AIG GPU customers on winter, one year cadence of the product and it looks like the <unk> roadmap is also moving to the 12 months from a prior 18 month cadence.

Speaker Change #159: Do you think that this puts you and your peers are the yield disadvantage in other words.

Speaker Change #160: <unk> and gross margin improves you have to migrate to <unk> coal and that new node might come at a lower <unk>. So I'm just kind of curious how to think about that cadence.

Speaker Change #161: <unk> progression and how that impacts <unk> in gross margin and I had a quick follow up.

As we mentioned we are doing well with respect to our goals on the HBM CE.

Speaker Change #162: <unk> yields with a tie and then 25 of course, we will be.

Speaker Change #162: The increase in the beginning of the output in early 2025 at 12 month high and of course 12 high will be going through its own yield ramp and 12 high will be ramping throughout calendar year, <unk> five and <unk> four will be a 2026 product and like any other new product of <unk>.

Sanjay Mehrotra: Of course 12 high will be going through its own yield ramp and 12 high will be ramping through our calendar year 2025. HBM4 will be a 2026 product. Like any other new product, of course there are, you know, in the early stages always ramp up of yield involved. But we are very pleased with the technical expertise that we have, manufacturing expertise and doing really quite well in terms of continuing to ramp up the yield and the quality of our products. You know, at the end of the day, you know, that cadence of, you know, our customers, cadence moving faster only benefits those who have the best product and technology because they are the ones who are able to work with the customers at the pace that they need.

Speaker Change #162: <unk>.

Speaker Change #163: What are you doing.

Speaker Change #164: Early stages always a ramp up of yield involved but we are very pleased with the technical expertise that we have manufacturing expertise.

Speaker Change #164: And doing really quite well in terms of.

Speaker Change #164: Continuing to ramp up the yield and the quality of our products.

Speaker Change #164: And at the end of the day, you know that cadence of our customers' cadence moving faster.

Speaker Change #164: The benefit of those who have the best product and technology, because they are the ones who are able to work with the customers.

Sanjay Mehrotra: And we are with our HBM3E, which has demonstrated clear leadership in performance, in power, and overall product feature set for our customers. We absolutely plan to maintain that leadership going forward with our roadmap from 8-high to 12-high of HBM3E and HBM4 and HBM4E in the future years along with our expertise in manufacturing. That should play to our strength in the timeframe ahead. We work very closely with our customers. We work very, very closely with our customers. You know, to understand their cadence, to understand their requirements, and make sure that our roadmap both from technology, product, and manufacturing capabilities is aligned well with their requirements. Thanks a lot for that, Sanjay. Super helpful color and a quick follow-up for Mark on inventory. I understand you're going to draw that down in FY25, but just in the last quarter it went up.

Speaker Change #165: It appears that they need and we are with <unk>.

Speaker Change #166: <unk>, which has demonstrated clear leadership and performance in <unk>.

Speaker Change #166: Power and overall.

Speaker Change #166: <unk>.

Speaker Change #166: Feature set for our customers, we absolutely plan to maintain that leadership going forward with our roadmap from <unk> to 12, <unk> hundred 40, <unk> in the future years.

Along with our expertise in manufacturing that should play to our strength and the timeframe in my head.

Speaker Change #166: And we work very close with <unk>, we work very very closely with our customers to understand.

Speaker Change #166: Cadence to understand their requirements and make sure that our roadmap.

<unk> technology product and manufacturing capability is aligned well with their requirements.

Speaker Change #167: Got it thanks, a lot for that Sunday's Super helpful color and then a quick follow up for Mark on inventory.

Speaker Change #168: Suddenly going to draw that down in FY 'twenty five but just in the last quarter. It went up any color on where that inventory levels are going up is that within Pcs and mobile DRAM any color there would be helpful. Thanks a lot.

Sanjay Mehrotra: Any color on where that inventory level is going up? Is that within PCs? Is it mobile DDR? Any color there would be helpful. Thanks a lot.

Mark Murphy: Sure. We were clear about this in the August conferences that we were seeing while we were seeing robust data center demand, we were seeing some customers that were buying ahead, anticipation of price increases, the rollout of AI related devices, and just surety of supply given that leading edge is tight. So we did see some inventory build, and we communicated that inventories would remain elevated going into FY25. So this is what you see. So our days did go up. You know, we continue to be prudent with our supply and walking away from less profitable business. We do expect the environment, supply demand environment, to be constructive for improved profitability in 25. And given the tight leading edge nodes and our outlook, we're going to need these inventories to bridge us to when our production on tech node transitions ramps.

Speaker Change #169: Sure we were clear about this and the August conferences that we were saying, while we were seeing robust data center demand.

Speaker Change #170: We're seeing some customers had.

Speaker Change #170: We're buying ahead anticipation of price increases.

Speaker Change #170: The rollout of AI related devices.

Speaker Change #171: And just surety of supply given that.

Speaker Change #171: Leading edge is tight.

Speaker Change #171: So yes, we did see some inventory build and we communicated that inventories have remained elevated.

Speaker Change #171: Going into FY 'twenty five so as what you see so our days did go up.

Speaker Change #171: We continue to be.

Speaker Change #171: Prudent with our supply and walking away from less profitable business.

Speaker Change #172: Do expect.

Speaker Change #172: Yes, the environment supply demand environment to be constructive for improved profitability in 'twenty five.

And given the tight.

Leading edge nodes and our outlook.

Speaker Change #172: Going to need these inventories to bridge us to when our production on tech node transitions ramps.

Speaker Change #172: So that's why we've given an outlook that.

Speaker Change #172: Our inventories by the end of the fiscal year, we expect to be approaching our targeted inventory levels now are volumes happen to be a bit more second half weighted of the fiscal year. So we will see a bit shallower improvement at <unk>.

Speaker Change #172: First half of the fiscal year, and then that improvement in DIR will steepen as.

Speaker Change #172: We move through the second half, but we're and we're confident in our inventory outlook and definitely need these leading edge.

Speaker Change #172: Mentor is to supply the market.

Sanjay Mehrotra: Thanks Juan.

Speaker Change #172: Okay.

Mark Murphy: Thanks Mark.

Operator: Thank you. And our next question comes from the line of Joseph Moore from Morgan Stanley. Your question please.

Yes.

Thank you and our next question comes from the line of Joseph Moore.

Speaker Change #173: From Morgan Stanley Your question. Please.

Satya Kumar: Great, thank you.

Mark Murphy: In terms of your target for getting to HBM market share that's more in line with your overall market share. Can you kind of characterize how you get there?

Joseph Moore: Great. Thank you.

Joseph Moore: Most of your target for getting to HBM market share.

Joseph Moore: More in line with your overall market share can you kind of characterize how you get there do you anticipate that it's still a supply constrained environment for everybody or are we sort of more a little bit more balanced in the quality of the micron product just through just what's the determinant of that market share that gets you to that level.

Sanjay Mehrotra: Do you anticipate that it's still a?

Mark Murphy: Supply-constrained environment for everybody, or are we sort of more a little bit more balanced, and the quality of the.

Sanjay Mehrotra: Micron product drives us through.

Mark Murphy: Just what's the determinant of that market?

Sanjay Mehrotra: Share that gets you to that level? Well, certainly. I mean we are being responsible and disciplined in terms of managing our market share. We have, you know, industry's best HBM3E product and it's the best product with 30% lower power with 8 high. And you know, in fact when you go to 12 high we are 20% lower power despite 50% increase in capacity versus others' 8 high products. So we are well positioned with our product, with its performance, with its power. And that's what is really putting us in this strong position of product being sold out for our 2024 and 2025 time frame. And when we look at HBM, we have talked about that next year we project a TAM of $25 billion consuming about 6% to over 6% of the industry base. In fact a TAM of greater than $25 billion in 2025.

Speaker Change #174: Well, certainly I mean, we're being responsible and disciplined in terms of managing our market share we have.

Speaker Change #175: Industrial is best <unk> product and it's the best product.

It is a 30% lower power with a tie in.

Speaker Change #175: And in fact, when you go to 12 high we are 20% lower power.

Speaker Change #175: Despite a 50% increase in capacity versus.

Speaker Change #175: Others HII products. So we are well positioned with our product with its performance with this power and Thats, what is really putting us in the strong position of.

Speaker Change #175: Being a product being sold out $4 24, and 25 timeframe and when we look at the HBM, we have talked about that next year we project.

<unk> of $25 billion consumer is consuming about 6% over 6% of the industry best in fact, a tam of greater than 25 billion in 2025, and we are pretty confident that with our <unk>.

Sanjay Mehrotra: And we are pretty confident that with our product, with our yield ramp, and with the agreement that we have in place with our customers, we will deliver sometime in 2025 get to our share to be in line with our industry share. So of course it's limited at this point by our production ramp, but we are really on a very good trajectory there. So we feel very confident with our product and with our production ramp and with share opportunities. And frankly, our HBM3E product is getting premium in the industry as well versus other products. So it just puts us on a good trajectory ahead as well.

Speaker Change #175: Product with our yield ramp.

Speaker Change #175: And with the agreement that we have in place with our customers.

Lee: We will deliver sometime in 2025 get to our share to be in line with that industry sure. So of course, it's Lee.

Lee: Limited at this point buyout production ramp.

Lee: But we are really on a very good trajectory there. So we feel very confident with.

Lee: Product ended up production ramp and we'd share opportunities and frankly, our <unk> product is getting premium and the industry as well versus other products. So it just puts us in a good trajectory ahead as well.

Mark Murphy: Great.

Sanjay Mehrotra: Thank you.

Satya Kumar: Congratulations.

Lee: Great. Thank you congratulations.

Operator: Thank you. And our next question comes from the line of Vivek Arya from Bank of America Securities. Your question please.

Lee: Okay.

Thank you and our next question comes from the line of Vivek Arya from Bank of America Securities. Your question. Please.

Sanjay Mehrotra: Thanks for taking my questions. I had two as well. Sanjay, on that same topic of HBM, there is some concern about the potential for HBM oversupply in 2025. Let's say there are three suppliers instead of the two that are right now. Is that something you see? That there is any potential for oversupply? And let's say if you take the other scenario where there continue to be only two suppliers of NextGen HBM, do you think the third supplier could flood the market with additional DRAM? Just sort of the reverse of this trade ratio argument. So just curious to hear how you think about the supply demand dynamics for both traditional DRAM and HBM for next year. So we certainly assume that the third supplier will ultimately succeed in having HBM3E product as well and will have some share in the marketplace as well.

Vivek Arya: Thanks for taking my questions I had two as well and you're on that same topic of HBM. There is some concern about the potential for HBM oversupply in 25, let's say there are three suppliers instead of the two that are right.

Speaker Change #177: Right now is that something youll see that.

Speaker Change #177: That is any potential for oversupply and let's say if you take the other scenario, where there continued to be only two suppliers of next gen. HCM during the third supplier could flood the market with additional.

Speaker Change #178: DRAM just sort of the reverse of this trade ratio argument. So just curious to hear how you think about the supply demand dynamics for both.

Speaker Change #178: Traditional DRAM and HBM core next year.

Speaker Change #179: So we certainly assume that the third supplier will ultimately succeed in having <unk> product as well and we'll have some shares in the marketplace as well and.

Sanjay Mehrotra: You know, again as I pointed out earlier, with the solid product that we have, our product has sold out through the 2025 timeframe, and we are really well positioned with this product. I think the part that you have to keep in mind is that leading-edge supply, as we have mentioned here, is tight. Leading-edge supply is tight because the industry in the 2022-23 timeframe, with reductions in CapEx and CapEx-efficient, industry-wide transitions to the newer technology nodes, the wafer capacity has come down from the peak levels in meaningful ways. So the lower wafer capacity compared to the peak of 2022, as well as the HBM3 to 1 trade ratio, these are the ones that are overall keeping the industry in a tight supply, and tight supply not just for HBM, but also for the non-HBM part of the market.

Again as I pointed out earlier.

Speaker Change #179: <unk> product that we have we our.

Speaker Change #180: Our product is sold out through 2025.

Speaker Change #180: The timeframe and we are really well positioned with this product I think the part that you have to keep in mind is that leading edge supply as we have mentioned here is tight leading edge suppliers tight because industry in 'twenty two 'twenty three time frame.

Speaker Change #180: Reductions in Capex, and Capex efficient industry industrial via transitions to the newer technology nodes there.

Speaker Change #181: Wafer capacity.

Come down from the peak levels.

Speaker Change #181: In meaningful ways, so that lower wafer capacity compared to the peak of 2022 as well as the HBM.

Speaker Change #181: 301 trade ratio. These are the ones that are overall, keeping the industry in a tight supply and tight supply not just what HBM.

Speaker Change #181: Also for non <unk> part of the market. So we of course feel very good about our own plans with HCM and of course, we always.

Sanjay Mehrotra: So we of course feel very good about our own plans with HBM, and of course we always stay completely focused on managing the mix of our business between non-HBM and HBM and remaining extremely disciplined about CapEx, about our share objectives. We have shared those share objectives about HBM here. Overall, we have said we maintain our DRAM as well as NAND supply share to be stable, and this is how we look at the overall market. But when you look at the market trends, it's not just about demand trend on HBM, which is of course growing substantially, becoming more than $25 billion market in 2025. It's also about PC spending. We see that demand for memory in smartphones and PCs as AI-enabled smartphones become bigger and bigger part of the market in the quarters and the years to come.

Speaker Change #181: State completely focus on managing the mix of our business between non HBM and <unk> remaining extremely disciplined about capex about our share objectives. We have shared those stated objectives about HBM here.

Speaker Change #181: Overall, we have said we maintain our DRAM.

Speaker Change #181: As well as NAND.

Speaker Change #181: Supply is sure to be stable and this is how we look at the overall market, but when you look at the market trends.

Speaker Change #181: Not just about demand trend on <unk>, which is of course growing substantially becoming more than $25 billion market. In 2025, It's also about.

Speaker Change #181: Past spring, we see that demand for memory in smartphones and Pcs as AI enabled smartphones become bigger and bigger part of.

Speaker Change #181: The market in the quarters and the years to come and.

Sanjay Mehrotra: Of course, customer inventories by spring timeframe in smartphones and PCs for memory get to earlier levels. We see that to be a driver of demand as well to complement the strong data center demand. We are looking at strong momentum not just with HBM. We have talked about multiple billions of dollars of revenue that we target to generate in our fiscal year 2025 from high capacity DRAM modules as well as LP memory in data center. So these are all the elements that point to strong demand trends and demand trends driven by AI in data center as well as in smartphones and PCs where more and more content is required in an environment where the leading edge supply is today tight.

Speaker Change #181: Of course, our customer inventories by spring timeframe in smartphone and Pcs flood memory get earlier levels.

Speaker Change #181: See that to be a driver of demand as well to complement the strong data center demand and we are looking at strong momentum not just with <unk>, we have talked about.

Speaker Change #181: Multiple billions of dollars of revenue that we target to generate in our fiscal year 2025 from high capacity.

Speaker Change #181: DRAM modules.

As well as LP memory in data center.

These are all the elements that point to strong demand trends and the demand trends driven by AI and data center as well as in smartphone and PC as we add more and more content.

Speaker Change #181: As acquired in an environment, where the leading edge supply is today tight. So I think the opportunity is tremendous and we see healthy demand supply balance and a constructive environment for our financial performance in fiscal 2025, and that's why if you say with confidence that will deliver a substantial revenue.

Speaker Change #181: The record in fiscal year 2025.

Speaker Change #181: Significant improvement in our profitability as well.

Satya Kumar: Very helpful, and maybe quick follow-up.

Speaker Change #181: Got it very helpful and maybe quick follow up for Mark.

Sanjay Mehrotra: For Mark Murphy on the Q3 call, I think you were a little more explicit about both industry pricing and your gross margins expanding through fiscal 2025. Is that still a useful construct from what you see today? Or do you think there is a scenario where gross margins or your pricing start to flatten out or even go in the other direction through fiscal 2025? What is the operating assumption for fiscal 2025 as you see it right now?

Speaker Change #182: On the Q3 call I think you were a little more explicit about both.

Speaker Change #183: Industry pricing and your gross margins expanding through fiscal 'twenty five is that still a useful construct from the AUC from what you see today or do you think there is a scenario where gross margins are your pricing start to flatten out or even going the other direction through fiscal 'twenty five what does the operating assumption.

Operator: Thank you.

Speaker Change #184: For fiscal 'twenty five as you see it right now thank you.

Mark Murphy: Maybe just following up here to draw on Sanjay's comments. I mean, we see a very positive setup in fiscal 2025, and so expect substantial record revenue, significantly improved profitability. The supply demand setup is quite good. The market's leading edge is very tight, as we've talked about. The industry wafer capacity has come down, and so HBM, of course, is creating supply constraints in the marketplace as AI bets increase. So you know, we still see that the supply demand environment is healthy through the year. We also are constructive for the year. We also see the trend we've talked about, that our volume is increasingly moving to support higher value add products with our differentiated portfolio. So HBM, high capacity DIMMs, more LP, and then our NAND SSD for data center portfolio products.

Speaker Change #185: Maybe just following up here.

Speaker Change #185: Drawn Sanjay his comments I mean, we see a very positive setup in fiscal 'twenty five.

Speaker Change #186: <unk> had said substantial revenue record significantly improve profitability the supply demand setup is quite good.

Speaker Change #187: Our market, leading edge is very tight.

Speaker Change #188: As we've talked about the industry wafer capacity has come down.

Speaker Change #188: And so yes.

Speaker Change #189: <unk> of course is.

Speaker Change #189: Yes.

Speaker Change #189: Crane supply constraints in the marketplaces.

Speaker Change #189: Sure bets increase.

Speaker Change #189: So.

Speaker Change #189: We still see that.

Speaker Change #189: The supply and demand environment is healthy through the year.

Speaker Change #189: We also are constructive for the year. We also see the trend we've talked about that our volume is increasingly moving to <unk>.

Support higher value add products with our differentiated portfolio, so HBM high capacity dams more LP.

Speaker Change #189: And then our NAND SSD.

Speaker Change #190: Yes for data center portfolio products.

Mark Murphy: So I think the margin expansion through the year supported by those elements and continued good cost performance gives us confidence on a very good year.

Speaker Change #190: So I think that the.

Speaker Change #190: The margin expansion through the year supported by those elements and continued good cost performance.

Speaker Change #190: It gives us confidence on.

Speaker Change #190: On a very good year.

Operator: Thank you. Thank you. Our next question comes from the line of Toshiya from Goldman Sachs. Your question please.

Speaker Change #191: Thank you.

Okay.

<unk> Hari: Thank you and our next question comes from the line of <unk> Hari from Goldman Sachs. Your question. Please.

Toshiya Hari: Thank you. I had a two-part question on the HBM business. Sanjay, you talked about you all being sold out through calendar 25. I'm curious if there's an opportunity for Micron to present upside or deliver upside to what the plan is currently for 25, or our equipment lead times such that you're essentially capped vis-à-vis what your expectations are today for HBM specifically. And then my second part is on gross margin for HBM. We all understand that the business is accretive to both the corporate average and also relative to DRAM. As you look forward into calendar 25 with volumes locked in and pricing locked in, I would assume you've got decent visibility on gross margins. Should we expect HBM gross margins to stay kind of where they are or could they move further up as long as you execute on the yield side.

<unk> Hari: Thank you I had a two part question on the <unk> business.

Speaker Change #193: So Andre you talked about you all being sold out through calendar 'twenty five.

Speaker Change #194: I'm curious if there is an opportunity for micron to present upside or deliver upside to what the plan is currently for 25 or our equipment lead time, such that Youre essentially capped vis vis what your expectations are today for <unk>, specifically and then my second part is on gross margin for HBM.

Speaker Change #195: We all understand that the business is accretive to both the corporate average and also relative to DRAM.

Speaker Change #196: You look forward into calendar 'twenty, five with volumes Lockton and pricing locked in I would assume you've got decent visibility on gross margin should we expect <unk> gross margins to stay kind of where they are or could they move further up.

Speaker Change #197: As long as you execute on the yield side. Thanks.

Operator: Thanks.

Sanjay Mehrotra: So regarding part of your question on the upside for HBM in 2025. So again let me emphasize that we are extremely focused on delivering our goals of getting our share in HBM to be in line with DRAM share sometime in 2025. Extremely focused on continuing to ramp up our production capacity and yield ramp, which are going well according to our plan. Very pleased with that. So remaining focused on that and of course if there are opportunities to be opportunistic with any upsides, of course we will be capturing those and you know those upsides always remain in. We expect to get to mature yields on our HBM in fiscal year 2025. Yields are always an upside opportunity. Productivity of the equipment always can be an opportunity as well.

Speaker Change #198: So regarding the Yieldco as a part of your question on the upside for HBM in 2025.

Speaker Change #198: So again, let me emphasize that we are extremely focused on delivering our goals of getting to our share.

Speaker Change #198: In HBM could be in line with DRAM share sometime in 2025 extremely focused on continuing to ramp up our production capacity and yield ramp which are going well. According to our plan and very pleased with that and so our remaining focused on that and of course, if there are opportunities to be opportunistic.

Speaker Change #198: With any upsides of course, we will be.

Speaker Change #198: Capturing those and those upsides are always demand and yields we expect to get to mature yields are not HBM in fiscal year 'twenty five.

Speaker Change #198: Always an upside opportunity productivity of the equipment always can be an opportunity as well so we manage our business responsibly.

Sanjay Mehrotra: So we manage our business responsibly and with total focus on delivering to our goals and maintaining our focus on keeping our HBM commitments to our customers coming through successfully. Now regarding your questions on gross margin being accretive, yes, we would expect our HBM business to be accretive for our fiscal year 2025. Beyond that, really not providing any further details. And yes, you are right that our volume and pricing for HBM is locked up for 2024 as well as for 2025 timeframe, calendar year 2024 and calendar year 2025.

And with total focus on delivering to our goals and.

Speaker Change #198: Maintaining our focus on keeping our HBM.

Speaker Change #199: <unk> commitment to our customers coming through successfully now regarding your questions on gross margin being accretive yes, we would expect our <unk> business to be accretive.

Speaker Change #199: I applaud our fiscal year 2025, we beyond that really not providing any further details and yes, you are right that our volume and pricing for HBM.

Speaker Change #199: Is locked up for 2024 as well as for 2025 timeframe calendar year 2020, Florida in calendar year 2025.

Toshiya Hari: Great.

Satya Kumar: As a quick follow-up.

Toshiya Hari: On DRAM industry bit growth, I think you raised your 2024 outlook to high teens and you gave a preliminary 2025 outlook of mid teens. I'm curious what's driving the decel from 2024 to 2025? Is the 2025 number a supply constrained number from a demand perspective? Sanjay, you sounded pretty constructive on PCs and smartphones and obviously the content opportunity and you remain pretty positive on data center. So I'm just curious what's driving the expected decel in 2025?

Great and then as a quick follow up on DRAM industry bit growth.

You raised your 24 outlook to high teens.

Speaker Change #200: Dave a preliminary twenty-five outlook of mid teens I'm curious, what's driving the DSL from 24 to 25 25 number of supply constrained number.

Speaker Change #200: From a demand perspective, Sanjay you sounded pretty constructive on Pcs and smartphones and obviously the content opportunity.

Speaker Change #201: We remain pretty positive on data center. So I'm just curious what's driving the expected T cell and 25. Thank you will.

Operator: Thank you.

Sanjay Mehrotra: Yeah, we'll just point. I mean, by the way, we have in the past talked about DRAM CAGR being mid-teens at 2024. We have increased the outlook to high-teens based on the strength in the data center and 2025. And as we look at it, just keep in mind two factors. One is we are now comparing it to the higher base of 2024, which has gone to high-teens, so that of course impacts the percentage of the 25. And second piece is that as we had noted, that smartphone and PCs, which at the end market level are continuing to do fine.

Speaker Change #202: <unk> point I mean by the way we have.

Speaker Change #203: In the past talked about DRAM CAGR being mid teens at 2024, we have increased the outlook to high teens based on the strength in the data center.

Speaker Change #203: And 2025 as we look at it and just keep in mind. Two factors. One is we are now <unk>.

Speaker Change #203: Comparing it to the higher base of 2024, which has gone to high teens.

Speaker Change #203: So that of course impacts the percentage of the 35 and second piece is that as we have noted that smartphone and.

Speaker Change #203: P C.

Speaker Change #203: Which at the end market level are continuing to do fine.

Sanjay Mehrotra: But, given the three factors that we have mentioned in our earnings call script, that the customers built some inventory, the sell-in is somewhat less than their sell-out in terms of memory, and we have said that by spring of 2025 we expect NAND PC's customer inventory levels to get to healthier levels versus now, and these will continue to improve. So that too plays a factor. And of course I would just like to remind you that we have pointed out that overall smartphone and PC unit growth will be occurring in 2025, and of course increasing penetration of AI phones, and second half that acceleration that growth will be obviously stronger than the first half. So all of these factors are included in our current outlook of 2025 DRAM growth being in mid-teens.

But given for the three factors that we mentioned in our earnings call script that the customers built some inventory.

Speaker Change #203: <unk> is somewhat less than their sellout in terms of <unk> and.

Speaker Change #203: And we have said that by spring of 2025, we expect in Pcs.

Speaker Change #203: Inventory levels to get to healthier levels versus now and these will continue to improve so that too plays a factor and of course.

Speaker Change #203: I will just like to remind you that we have pointed out to that.

Speaker Change #203: Overall smartphone and PC unit growth will be occurring in 2025 and of course, increasing penetration of AI phones, and the second half that acceleration that growth will be obviously stronger than the first half as all of these factors.

Speaker Change #203: Our.

Speaker Change #203: Included in our current outlook of 2025, DRAM growth being in mid teens, and let me just point out that.

Sanjay Mehrotra: And let me just point out that previously we had said that HBM, we would expect it to be greater than $20 billion opportunity in 2025. We have now said HBM is more than $25 billion opportunity in 2025. So as you know, HBM has a trade ratio of 3 to 1. It takes three times as many wafers to produce the same bits as standard products, the technology nodes. So obviously, you know, the growth of HBM also impacts the total bit growth year over year in aggregate.

Speaker Change #203: Previously, we had said that HBM, we would expect it to be greater than $20 billion opportunity. In 2025. We have now said HBM is more than $25 billion opportunity in 2025. So as you know HBM hazard ratio of <unk>.

Speaker Change #204: One it is three times as many wafers to produce the same bit as standard products the technology nodes. So obviously.

Speaker Change #204: The growth of HBM.

Speaker Change #204: Also impacts the total bit growth.

Speaker Change #204: Year over year in aggregate.

Satya Kumar: Thank you.

Operator: Thank you. And this does conclude the question and answer session as well as today's program. Thank you ladies and gentlemen, for your participation. You may now disconnect. Good day.

Speaker Change #204: Thank you.

Speaker Change #205: Thank you and this does conclude the question and answer session as well as today's program. Thank you ladies and gentlemen for your participation you may now disconnect. Good day.

Mark Murphy: It's.

Q4 2024 Micron Technology Inc Earnings Call

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