Micron Technology, Inc. (NASDAQ:MU) Q2 2024 Earnings Call Transcript

Chris Danely: Hey, thanks, guys. I guess just another multipart question on margins like everybody else. So you mentioned that there’s still some underutilization charges related to legacy manufacturing capacity. When do those go away? And then as a follow-up to all these HBM margin questions. Can you just talk about the gross margin arc of your HBM products as more competition and capacity comes on to the market? Like when would the gross margins peak and then start to decline as Samsung starts to increase capacity, your capacity goes up, all that stuff? Thanks.

Mark Murphy: I’ll deal with the first question. On the underutilization charges, Chris, they went from, I think it was $165 million in the first quarter down to under $50 million in the second quarter. We believe they’ll stay at low levels well below 50 for the foreseeable future. So we’ll no longer comment on those. And again, as I mentioned in my comments, they’re related to the legacy capacity.

Sanjay Mehrotra: And regarding your question on gross margin projections for HBM, so we are not going to do that here. We are totally focused on increasing our production capability and bringing in 2025 a bit share for DRAM — for HBM to be in line with our DRAM share. And of course, this will bring about greater profitability opportunities, but we are really not projecting pricing of HBM here in the future. But clearly, HBM brings tremendous value in the applications. You are seeing these new platforms that are hungry for more HBM, and HBM has been in shortage, and we have talked about our ’24 and ’25 supply being spoken for. So all of that, I think, bodes well for high revenue growth and highly profitable HBM business for us.

And of course, we will stay extremely focused on maintaining discipline, maintaining our CapEx discipline and maintaining our share target discipline for HBM and really staying very disciplined on overall supply growth being in line with our DRAM share for the whole DRAM part of our business. So I think these will be key as we continue to look ahead at our execution and driving our opportunities forward.

Chris Danely: Got it. Thanks, guys.

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.