Q & A Highlights

Q : Could you speak to what gives you the confidence that we're going to see a seasonal or cyclical pickup across both DRAM and NAND? A : Sanjay Mehrotra, President and CEO, explained that the outlook for CQ2 is impacted by inventory adjustments in consumer markets and typical seasonality. However, they expect customer inventories to improve by spring, driving shipment growth in the fiscal second half. Data center SSD demand, which can be lumpy, is also expected to return to growth in the fiscal second half.

Q : Can you provide more granularity on the impact from NAND underloadings and the tailwind from increasing HBM mix in revenues? A : Mark Murphy, CFO, noted that the Q2 guide is down due to weaker NAND market conditions and moderated data center SSD volumes. Underload charges will begin affecting margins in Q3. However, beyond Q3, they expect business volume growth and favorable mix effects, including HBM, to drive margin expansion.

Q : What has changed to increase the HBM TAM estimate, and why is the target share expected more in the second half of 2025? A : Sanjay Mehrotra stated that the HBM TAM estimate increased due to higher demand and volume requirements for 2025. The target share is expected in the second half of 2025 due to ongoing capacity and yield improvements. Micron is focused on ramping up HBM capacity and achieving its share target in line with DRAM industry share.

Q : How do you think about market share in HBM over the long term, and is premium pricing still achievable? A : Sanjay Mehrotra emphasized that Micron is focused on achieving HBM share in line with DRAM industry share. The company is leveraging its product's performance and power efficiency to maintain premium pricing. Micron plans to continue this momentum with future products like HBM4 and 4E.

Q : What are your thoughts on China competition in DDR5 and LP5 over the next 18-24 months? A : Sanjay Mehrotra noted that China competition is more focused on lower performance products in the consumer market. As the market shifts towards higher performance products, especially in data centers, Micron is well-positioned with its advanced technology and product roadmap to address these higher-end market needs.

For the complete transcript of the earnings call, please refer to the full earnings call transcript .

This article first appeared on GuruFocus .