The paragraph is an introduction to Micron Technology's Fourth Quarter 2024 Financial Call, presented by Satya Kumar from Investor Relations. Participants are in listen-only mode, with a Q&A session to follow. The call is being webcast on their Investor Relations site and includes audio, slides, and a press release detailing their quarterly results. Financial results are presented on a non-GAAP basis, with reconciliations available on their website. The discussion includes forward-looking statements about market trends, technology impacts, product plans, and financial guidance, which are subject to risks and uncertainties. The company also maintains updates on their website and social media.

In the provided paragraph from an investor call, Sanjay Mehrotra of Micron discusses the company's strong financial performance in fiscal year 2024, highlighting record-high revenues in NAND and storage, and impressive growth in gross margins and EPS. Micron achieved a 60% revenue increase and set revenue records in data center and automotive sectors. Sanjay attributes these successes to the execution of Micron's team. Looking ahead to fiscal 2025, he emphasizes Micron's strong competitive position, driven by advancements in DRAM and NAND technologies, and robust data center demand. The company anticipates continued growth fueled by investments in AI-driven demand and expects to achieve record revenue and improved profitability starting with fiscal Q1 2025.

Micron is increasing production of advanced DRAM and NAND technology nodes, with significant cost reductions achieved and projected for both. They are advancing in new fabs and expansions globally and converting an LCD factory in Taiwan for DRAM testing to enhance their competitive edge. Micron highlights the crucial role of memory in advancing AI, driven by growing model sizes, multimodal solutions, continuous training, and the expansion of inference workloads.

Micron is capitalizing on strong AI-driven demand, particularly from data centers, with a significant focus on high-growth opportunities in server and data center technologies. Server shipments are expected to see moderate growth in 2024, driven by AI and traditional servers benefiting from technological upgrades. Micron’s data center revenue has hit record levels and is expected to grow further, boosted by their portfolio of advanced HBM, high-capacity D5 and LP5 solutions, and SSD products. The company has shown progress in its HBM production and financials, with notable revenue and margin improvements in fiscal 2024. Looking ahead, Micron projects substantial growth in the HBM market, anticipating its TAM to increase from $4 billion in 2023 to over $25 billion by 2025, and its share of the overall DRAM market to rise accordingly.

Micron is advancing in its HBM technology, preparing to lead with HBM4 and HBM4E. The company has started shipping HBM3E 12-high 36GB units, which are more power-efficient and offer greater capacity than competitors' solutions. Production will ramp up in 2025, with sales for 2024 and 2025 already secured. Micron's HBM revenue will diversify as it gains a broader customer base. There is strong demand for Micron's D5 and LP5 solutions, particularly in AI and data centers, where their high-capacity and energy-efficient products are appealing. Additionally, data center SSD demand is growing, driven by AI growth and a recovery in traditional computing and storage.

The company’s strategy of vertical integration, including using in-house designed controllers and firmware, has significantly boosted its data center SSD portfolio, leading to record revenue and market share gains. Fiscal 2024 data center SSD revenues have more than tripled from the previous year. In the PC market, despite increased inventories due to rising memory prices and anticipated AI PC growth, a steady sell-through and expected seasonal demand increase forecast healthier inventories by spring 2025. PC unit volumes are expected to grow slightly in 2024, with accelerated growth in 2025 driven by next-gen AI PCs and the transition from Windows 10 to Windows 12. The market is set for transformation, with AI PCs requiring higher memory and storage capacities, as demonstrated by new AI-enabled PC models with significantly increased DRAM.

Micron is poised to support the growth of AI in PCs with advanced memory and storage products, including their LPCAMM2 modules that offer significant power, performance, and space benefits. The company's 3500 client SSD is qualified by major PC OEMs for AI workloads. In the smartphone market, low-to-mid single-digit unit growth is expected in 2024 and continuing into 2025, with OEMs incorporating more AI features. Leading Android phones now feature 12GB to 16GB DRAM compared to 8GB last year. Micron supports AI smartphone growth with advanced memory and storage products, marking advancements with the second-generation 1-beta LP5X DRAM and G8 NAND UFS 4.0. In the automotive sector, long-term growth in infotainment and ADAS systems has driven record revenue for Micron in fiscal 2024.

Micron has developed a leading portfolio of automotive-grade DRAM and NAND products, achieving a significant milestone with the qualification of its advanced 1-beta based 16Gb LP5 for the automotive market. The automotive sector is adapting to a mix of EVs, hybrids, and traditional vehicles, which is expected to boost Micron’s automotive growth in the latter half of fiscal 2025. The DRAM industry demand for 2024 is anticipated to improve, driven by data center servers and other market segments, with expected bit demand growth in the high-teens percentage range. NAND bit demand growth for 2024 is forecasted in the mid-teens range, with both DRAM and NAND growth in 2025 projected to be in the mid-teens. Supply constraints due to 2023 industry CapEx and supply reduction actions will lead to wafer capacity in 2024 being below 2022 levels, fostering a favorable supply-demand balance and aiding future investments.

The paragraph discusses the expectations for the NAND industry's supply-demand balance in 2025, driven by reduced industry wafer capacity and low capital expenditures. With slower technology transitions and reduced R&D and capital intensity, the financial health of the NAND industry is expected to improve. Micron invested $8.1 billion in CapEx in fiscal 2024, with expectations of higher CapEx in fiscal 2025, driven by new fab construction and HBM investments. Micron's ongoing projects in Idaho and New York are for long-term DRAM demand and won't affect 2025-2026 bit supply. The company will maintain supply and CapEx discipline to focus on profitability while retaining market share. The paragraph ends with financial results showing strong performance in fiscal Q4, as highlighted by Mark Murphy.

In fiscal Q4, Micron Technology's revenue reached approximately $7.8 billion, marking a 14% sequential increase and a 93% year-over-year rise. For fiscal 2024, the total revenue was $25.1 billion, up 62% from the previous year. DRAM revenue for Q4 was $5.3 billion, up 93% year-over-year, and constituted 69% of total revenue. For the fiscal year, DRAM revenue grew 60% to $17.6 billion. NAND revenue for Q4 was $2.4 billion, up 96% year-over-year and 31% of total revenue, while annual NAND revenue rose 72% to $7.2 billion. The Compute and Networking Business Unit saw a 17% sequential increase to $3 billion, and Data center server DRAM achieved record quarterly revenue. The Mobile Business Unit grew 18% sequentially to $1.9 billion, and the Storage Business Unit increased 24% sequentially to $1.7 billion, with record fiscal-year revenue in NAND storage. Despite a 9% sequential decline, the Embedded Business Unit still set a fiscal-year revenue record in the automotive segment for the fourth consecutive year. The consolidated gross margin for Q4 improved to 36.5%, driven by higher pricing and an improved product mix.

The fiscal year saw significant financial improvements, with consolidated gross margin increasing to 23.7% and operating expenses rising primarily due to R&D investments and short-term incentive compensation. Q4 operating income was $1.7 billion, yielding a 23% margin, while the annual operating income totaled $1.9 billion with an 8% margin. Adjusted EBITDA for Q4 was $3.7 billion, or a 48% margin, and $9.7 billion for the year, or a 38% margin. Tax expenses rose due to jurisdictional mix changes, with $387 million in Q4 and $379 million for the year, equating to 20% of pretax income. Non-GAAP diluted EPS in Q4 was $1.18, surpassing expectations, while annual non-GAAP EPS reached $1.30. Operating cash flows were $3.4 billion in Q4 and $8.5 billion annually, with Q4 capital expenditures at $3.1 billion.

The paragraph outlines Micron's financial performance and strategies. The company reported capital expenditures of $8.1 billion for the fiscal year and generated $386 million in free cash flow. Improved conditions led to the resumption of share repurchases, with $300 million spent on 3.2 million shares at an average of $93.07 per share in fiscal Q4. Inventory levels were up slightly, with plans to reduce inventory to boost revenue in fiscal 2025. Micron ended the quarter with $9.2 billion in cash and investments, maintaining $11.7 billion in liquidity including credit facilities, and $13.4 billion in total debt with low leverage. The outlook for fiscal Q1 includes improved gross margins due to better pricing and portfolio mix, with stable to slightly increased operating expenses. For fiscal 2025, operating expenses are expected to grow by mid-teens percentage compared to fiscal 2024.

In the paragraph, the company outlines its financial expectations and strategic plans for fiscal Q1 and fiscal 2025. Growth in operating expenses is projected to be higher in the second half, driven by increased R&D investments, particularly in HBM. The non-GAAP tax rate for fiscal Q1 and fiscal 2025 is estimated to be in the mid-teens percentage range. Inventory days are expected to decline, reaching target levels by the end of fiscal 2025. Capital expenditures in fiscal Q1 are forecasted to rise to around $3.5 billion, with fiscal 2025 CapEx anticipated to be mid-30s percentage of revenue. Revenue for fiscal Q1 is projected at $8.7 billion, with an expected gross margin around 39.5%, operating expenses at approximately $1.085 billion, and EPS around $1.74 per share. The company maintains a disciplined investment approach to align bit supply with industry demand and expects record revenue and improved profitability and cash flow in fiscal 2025. Sanjay Mehrotra underscores the exciting opportunities presented by AI for memory and storage.

Micron's advancements in memory and storage technology are driving significant breakthroughs, enhancing global information use. They maintain a leadership position in DRAM and NAND technologies through their unique culture, extensive product portfolio, excellent manufacturing execution, and quality. This has made them the preferred partner for customers' long-term planning, setting a solid foundation for an exciting fiscal 2025. After this introduction, Timothy Arcuri from UBS asks about the assumptions in Micron's fiscal Q1 guidance, specifically about DRAM and NAND bit growth. Mark Murphy responds, noting an upward revision for DRAM bit growth and stable NAND bits. He highlights strong data center demand and Micron's successful product and manufacturing execution.

In the paragraph, Sanjay Mehrotra responds to a question about HBM revenue for fiscal Q4, stating that they are not providing specific quarterly figures. However, he emphasizes that the company achieved several hundred million dollars in HBM revenue for fiscal year 2024 and is proud of their team's execution. He also mentions their goal to deliver multiple billions of dollars in HBM revenue for fiscal year 2025. Timothy Arcuri thanks Sanjay, and the operator introduces the next question from C.J. Muse of Cantor Fitzgerald, who asks about the factors driving a robust 300 basis point increase in gross margins and seeks insight into the sustainability of these drivers beyond the November quarter. Mark Murphy responds, indicating that the healthy supply-demand environment is contributing positively to pricing and margin expansion.

The paragraph discusses the progress in executing a product roadmap, focusing on high-value products which are contributing positively. While costs are being controlled, DRAM costs will slightly increase in the first quarter due to HBM product mix. The outlook for the first quarter is positive with favorable supply-demand, pricing, and cost execution. C.J. Muse inquires if the company has changed its CapEx prioritization in light of market changes, particularly in investments for HBM. Sanjay Mehrotra responds that the CapEx focus remains on HBM investment and long-term construction for future growth. Krish Sankar then asks about AI GPU customers moving to a yearly product update cycle and the impact on HBM roadmap and yields, raising concerns about potential yield disadvantages when transitioning to new nodes like HBM4.

In the paragraph, Sanjay Mehrotra discusses the progression and impact of their High Bandwidth Memory (HBM) technology, specifically HBM3E and future developments like HBM4. He highlights the successful yield improvements and production ramp-up plans. Mehrotra emphasizes that staying aligned with customer needs and maintaining leadership in performance and technology are key to their strategy. He also mentions that their expertise in manufacturing is a strength. Krish Sankar follows up with gratitude and a reminder about inventory plans for FY'25.

In the paragraph, Mark Murphy discusses the reasons behind the recent increase in inventory levels, noting that some customers bought ahead in anticipation of price increases, AI device rollouts, and the need for supply surety. Despite elevated inventories, the company expects the supply-demand environment to improve profitability in 2025. They plan to use these inventories to bridge production transitions to new tech nodes. Murphy indicates that inventory days will improve more significantly in the second half of the fiscal year, and they aim to approach target inventory levels by year-end. After Murphy's explanation, Krish Sankar thanks him, and the operator introduces a new question from Joseph Moore of Morgan Stanley.

In the paragraph, Sanjay Mehrotra discusses the strong position of Micron's HBM3E product, highlighting its superior performance and power efficiency compared to competitors. Despite production constraints, Micron's product is sold out for 2024 and 2025. The total addressable market (TAM) for HBM is projected to be over $25 billion in 2025, and Micron expects to align its market share with the industry standard by then. Mehrotra expresses confidence in their production ramp and the premium status of their HBM3E product in the industry. Joseph Moore congratulates them, and the operator introduces the next question from Vivek Arya of Bank of America Securities.

Sanjay Mehrotra addresses concerns about a potential oversupply of HBM (High Bandwidth Memory) in 2025, considering the possibility of a third supplier entering the market. He acknowledges that the third supplier may successfully introduce an HBM3E product, but emphasizes that current supply is tight due to reduced wafer capacity and industry-wide transitions to newer technology nodes. Mehrotra notes that his company's HBM products are sold out through 2025 and they are well-positioned. He reassures that they are managing their mix of HBM and non-HBM products carefully and remain disciplined in their capital expenditures and market share objectives. Overall, they aim to maintain stability in their DRAM and NAND supply shares.

The paragraph discusses the growing market demand for HBM (High Bandwidth Memory), which is projected to exceed $25 billion by 2025. It notes increasing memory demand in AI-enabled smartphones and PCs, and highlights that customer inventories of smartphone and PC memory could drive demand. The company expects substantial revenue from high-capacity DRAM modules and LP memory in data centers by fiscal year 2025, driven by strong data center demand and tight supply of leading-edge memory. They anticipate a healthy demand-supply balance and a positive financial environment, expressing confidence in achieving record revenue and significant profitability improvement in fiscal 2025. Finally, Vivek Arya asks Mark Murphy about industry pricing and gross margins for fiscal 2025, referencing optimistic forecast comments from a previous call.

The paragraph discusses the positive outlook for fiscal '25, highlighting substantial revenue growth and improved profitability due to a favorable supply-demand setup. Industry wafer capacity has decreased, creating supply constraints in the HBM market as demand increases. The company is confident about a healthy supply-demand environment and constructive trends for the year. They are focusing on higher-value products like HBM, high-capacity DIMMs, and NAND SSDs for data centers, which should drive margin expansion supported by good cost performance. Vivek Arya from Goldman Sachs then asks about the potential for exceeding current HBM plans for '25 and the outlook on gross margins for HBM given visibility on volumes and pricing. Sanjay Mehrotra addresses this concern, starting with the potential upside for HBM in 2025.

The paragraph emphasizes the company's focus on achieving its goals, particularly aligning its HBM (High Bandwidth Memory) share with its DRAM share by 2025, and successfully ramping up production capacity and yield. They aim to capture any opportunistic upsides and manage their business responsibly. The company expects HBM to be accretive to gross margins by fiscal year 2025 and confirms that volume and pricing for HBM are secured for 2024 and 2025. In response to a query about DRAM industry bit growth, Sanjay Mehrotra acknowledges the increase in the 2024 outlook to high-teens due to strong data center demand but projects a mid-teens growth rate for 2025, suggesting a potential deceleration due to supply constraints.

In this paragraph, the speaker discusses factors influencing their 2025 outlook for DRAM growth and the HBM market. They note that comparing to a high base in 2024 and the inventory levels of smartphones and PCs will impact 2025 growth percentages. By spring 2025, they expect healthier inventory levels for PCs. They also predict overall growth in smartphone and PC units, driven by increasing AI phone penetration, with stronger growth in the second half of 2025. They update their HBM market opportunity estimate from over $20 billion to more than $25 billion for 2025, highlighting that HBM production requires three times as many wafers as standard products, impacting overall bit growth year-over-year.

This summary was generated with AI and may contain some inaccuracies.