March 20, 2024

Overview

• In fiscal Q2, Micron delivered revenue, gross margin, and
  EPS well above the high end of guidance. Micron has
  returned to profitability and delivered a positive operating
  margin a quarter ahead of expectation.
• Micron drove robust price increases as the supplydemand balance tightened. This improvement in market
  conditions was due to a confluence of factors, including
  strong AI server demand, a healthier demand
  environment in most end markets, and supply reductions
  across the industry.
• AI server demand is driving rapid growth in HBM, DDR5
  (D5) and data center SSDs, which is tightening leadingedge supply availability for DRAM and NAND. This is
  resulting in a positive ripple effect on pricing across all
  memory and storage end markets.
• We expect DRAM and NAND pricing levels to increase
  further throughout calendar year 2024 and expect record
  revenue and much improved profitability now in fiscal
  year 2025.

Technology

• Over 3/4s of our DRAM bits are now on leading-edge
  1-alpha and 1-beta nodes, and over 90% of our
  NAND bits are on 176-layer and 232-layer nodes.
• Expect FY24 front end cost reductions, excl. the
  impact of HBM, in line with our long-term
  expectations of mid-to-high single digits in DRAM and
  low teens in NAND.
• Achieved equivalent yield and quality on 1-alpha as
  well as 1-beta nodes between EUV and non-EUV
  flows. Begun 1-gamma DRAM pilot production using
  EUV and on track for volume production in CY25.
• Development of our next-gen NAND node is on track,
  with volume production planned for calendar 2025.
  5
  End markets overview
• Inventories for memory and storage have improved
  significantly in the data center, and we continue to expect
  normalization in the first half of calendar 2024.
• In PC and smartphone, there were some strategic
  purchases in CQ4 in anticipation of a return to unit growth.
• Inventories remain near normal levels for auto, industrial,
  and other markets.
• We are in the very early innings of a multi-year growth
  phase driven by AI as this disruptive technology will
  transform every aspect of business and society.

End market highlights

• In data center, total industry server unit shipments are expected
  to grow mid- to high-single digits in calendar 2024, driven by
  strong growth for AI servers and a return to modest growth for
  traditional servers.
• HBM: We commenced volume production and recognized our
  first revenue from HBM3E in fiscal Q2 and now have begun highvolume shipments of our HBM3E product. Customers continue to
  give strong feedback that our HBM3E solution has a 30% lower
  power consumption compared to competitors’ solutions. Our
  HBM3E product will be a part of Nvidia’s H200 Tensor Core
  GPUs, and we are making progress on additional platform
  qualifications with multiple customers. We are on track to
  generate several hundred million dollars of revenue from HBM in
  fiscal 2024 and expect HBM revenues to be accretive to our
  DRAM and overall gross margins starting in the fiscal third
  quarter. Our HBM is sold out for calendar 2024 and the
  overwhelming majority of our 2025 supply has already been
  allocated. We continue to expect HBM bit share equivalent to
  our overall DRAM bit share sometime in calendar 2025.
• HBM (continued): Earlier this month, we sampled our 12-high
  HBM3E product, which provides 50% increased capacity of
  DRAM per cube to 36 GB. We expect 12-high HBM3E will start
  ramping in high volume production and increase in mix
  throughout 2025.
• 128GB Modules: During the quarter, we completed validation of
  the industry’s first mono-die based 128GB server DRAM module.
  We see strong customer pull and expect a robust volume ramp
  for our 128GB product, with several hundred million dollars of
  revenue in the second half of fiscal 2024.
• 256GB MCRDIMM: We also started sampling our 256GB
  MCRDIMM module, which further enhances performance and
  increases DRAM content per server.
• Data center SSDs: We achieved record revenue share in the
  data center SSD market in calendar 2023. During the quarter, we
  grew our revenue by over 50% QoQ for our 232-layer based
  6500 30TBs SSDs, which offer best-in-class performance,
  reliability, and endurance for AI data lake applications.

• PC: Unit volumes are expected to grow modestly in the low
  single-digit range for calendar 2024. We expect next-gen AI PC
  units to grow and become a meaningful portion of total PC units
  in calendar 2025.
• At CES, Micron launched the industry’s first low power
  compression attached memory module or LPCAMM2 for PC
  applications. LPCAMM2 brings a modular form factor, with a
  maximum capacity point of 64GB for PC module and 128GB for
  server module, along with a number of benefits such as higher
  bandwidth, lower power and smaller form factor.
• During the quarter, we launched our 232-layer based Crucial
  T705 Gen 5 consumer SSD, which won several editor choice
  awards and was recognized by a leading publisher as the
  “fastest M.2 SSD ever”. We increased our client SSD QLC bit
  shipments to record levels, with QLC representing nearly 2/3rds
  of our client SSD shipments, firmly establishing Micron as the
  leader in client QLC SSDs.
• Mobile: Smartphone unit volumes in calendar 2024 remain on
  track to grow low-to-mid single digits. We expect AI phones to
  carry 50 to 100% greater DRAM content compared to non-AI
  flagship phones today. In DRAM, we are now sampling our
  second generation, 1-beta LPDRAM LP5x product which
  delivers the industry’s highest performance at improved power
  for flagship smartphones. And in NAND, we announced our
  second generation of 232-layer NAND UFS4.0 devices.
• Automotive: We experienced strong growth with partners who
  are driving the most advanced capabilities within the
  automobile’s increasingly intelligent and connected digital
  cockpits. Adoption of Level 2+ ADAS capabilities continues to
  gain momentum, further expanding content per vehicle.
• Industrial: Fundamentals for memory are also healthy, with
  improving distributor inventory, book to bill and demand visibility
  improvements, as well as pricing benefits from the tight supply
  for products, especially those built on leading-edge nodes.

• Outlook and Capex plan
• Demand: Calendar 2023 DRAM bit demand growth was in the low double-digit percentage
  range, and NAND bit demand growth was in the low-20s percentage range – both a few
  percentage points higher than previous expectations.
• We forecast calendar 2024 bit demand growth for the industry to be near the long-term
  CAGR for DRAM and around mid-teens for NAND. Given the higher baseline of 2023
  demand, these expectations of 2024 bit growth have driven an increase in the absolute
  level of 2024 bit demand in our model for DRAM and NAND versus our prior expectations.
• Over the medium term, we expect bit demand growth CAGRs of mid-teens in DRAM and
  low-20s percentage range in NAND.
• Supply: We expect calendar 2024 industry supply to be below demand for both DRAM
  and NAND. Micron’s bit supply growth in fiscal 2024 remains below our demand growth for
  both DRAM and NAND, and we expect to decrease our days of inventory in FY24.
• We are now fully utilized on our high-volume manufacturing nodes and are maximizing
  output against the structurally lowered capacity. We project to end fiscal 2024 with low
  double digit percentage less wafer capacity in both DRAM and NAND than our peak levels
  in fiscal 2022.
• Industry-wide, HBM3E consumes approximately three times the wafer supply as D5 to
  produce a given number of bits in the same technology node. With increased performance
  and packaging complexity, across the industry, we expect the trade ratio for HBM4 to be
  even higher than the trade ratio for HBM3E.
• Capex plan:
• Micron’s fiscal 2024 capex plan
  remains unchanged at a range
  between $7.5 and $8.0 billion.
• We continue to project our WFE
  spending will be down year on
  year in fiscal 2024.
• Announced projects in China,
  India, and Japan are proceeding
  as planned. On potential US
  expansion plans, we have
  assumed CHIPS grants in our
  capex plans for fiscal 2024.
• Our planned Idaho and New
  York projects require Micron to
  receive the combination of
  sufficient CHIPS grants,
  investment tax credits, and local
  incentives to address the cost
  difference compared to overseas
  expansion

FQ2
-24 revenue
$5.8B
Revenue up 23% Q/Q
and up 58% Y/Y
11
March 20, 2024
Performance by technology
DRAM FQ2-24

• $4.2 billion, representing 71% of total revenue
• Revenue increased 21% Q/Q
• Bit shipments increased by a low-single digit
  percentage Q/Q
• ASPs increased by high teens Q/Q
  NAND FQ2-24
• $1.6 billion, representing 27% of total revenue
• Revenue increased 27% Q/Q
• Bit shipments decreased by a low-single digit
  percentage Q/Q
• ASPs increased by over 30% Q/Q
  12
  March 20, 2024
  Revenue by business unit
  Amounts in millions FQ2-24 FQ1-24 Q/Q %
  Change FQ2-23 Y/Y %
  Change
  Compute and Networking (CNBU) $2,185 $1,737 26% $1,375 59%
  Mobile (MBU) $1,598 $1,293 24% $945 69%
  Embedded (EBU) $1,111 $1,037 7% $865 28%
  Storage (SBU) $905 $653 39% $507 79%
  13
  March 20, 2024
  FQ2-24
  Non-GAAP operating results
  Revenue: $5.8 billion
  Gross margin: 20%
  Operating expenses: $959 million
  Operating income: $204 million
  Net income: $476 million
  Diluted earnings per share: $0.42
  Cash from operations (GAAP): $1.2 billion
  13
  See non-GAAP reconciliations in Appendix
  14
  March 20, 2024
  Cash flow and capital allocation
  From FY-21 to FQ2-24:
  $5.3 billion returned to shareholders from share
  repurchases and dividends, including $4.1 billion
  used to repurchase 60 million shares
  Cash flow
  from operations FQ2-24: $1.2B (21% of revenue)
  Net CapEx1
  FQ2-24: CapEx of $1.2B
  FY-24: CapEx guidance between $7.5B and $8.0B
  Adjusted FCF* FQ2-24: Negative $29M
  Buybacks FQ2-24: Temporarily suspended
  Dividends Dividend payment of $0.115 per share will be
  paid on April 16th
  Liquidity2 $12.2B in liquidity at end of FQ2-24

FQ3-24 guidance
Non-GAAP
Revenue $6.60 billion ± $200 million
Gross margin 26.5% ± 1.5%
Operating expenses $990 million ± $15 million
Diluted earnings per share* $0.45 ± $0.07