Micron: Fiscal 4Q24 Financial Results

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Micron delivered a strong finish to FY24, with 4FQ24 revenue at the high end of guidance range and gross margins and earnings per share also above the high end of guidance ranges.

In 4FQ24, it achieved record-high revenues in NAND and in its storage business unit.

3FQ24 highlights

• Revenue of $6.81 billion vs. $5.82 billion for 3FQ24 and $3.75 billion for 3FQ23
• FY24 revenue grew over 60%, company gross margins expanded by over 30 percentage points and revenue records in data center and in automotive.
• Leadership 1-beta DRAM and G8 and G9 NAND process technology, and leadership products across firm's end markets.
• Robust data center demand is exceeding leading-edge node supply and is driving overall healthy supply-demand dynamics.
• As we move through calendar 2025, the company expects a broadening of demand drivers, complementing strong demand in the data center.
• It looks forward to delivering a substantial revenue record with significantly improved profitability in FY25, beginning with guidance for record quarterly revenue in 1FQ25.

Performance by technology

DRAM 4FQ24

• $5.3 billion, representing 69% of total revenue
• Revenue increased 14% Q/Q
• Bit shipments flattish Q/Q
• ASPs increased in the mid-teens percentage range Q/Q

DRAM FY24

• $17.6 billion, representing 70% of total revenue
• Revenue increased 60% Y/Y

NAND 4FQ24

• $2.4 billion, representing 31% of total revenue
• Revenue increased 15% Q/Q
• Bit shipments increased in the high-single digit percentage range Q/Q
• ASPs increased in the high-single digit percentage range Q/Q

NAND FY24

• $7.2 billion, representing 29% of total revenue
• Revenue increased 72% Y/Y

Technology and operations

• 1-beta DRAM and G8 and G9 NAND nodes are ramping in high volume and will become an increasing portion of mix through FY25. As a reminder, G8 NAND node refers to 232-layer NAND technology node.
• 1-gamma DRAM pilot production using extreme ultraviolet (EUV) lithography is progressing well, and the firm on track for volume production in calendar 2025.
• Delivered FY24 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 forecast.
• Expects FY25 DRAM front-end cost reductions excluding HBM to be in the mid-to-high single digits percentage range.
• Expects FY25 NAND cost reductions to be in the low-to-mid teens percentage range.

Data Center

• ndustry server unit shipments are expected to grow in the mid-to-high single digits in calendar 2024, driven by strong growth for AI servers as well as low-single digits growth for traditional servers.
• Mix of data center revenue reached a record level in FY24, and the vendor expects will grow significantly from here in FY25.
• Well positioned in the data center with portfolio of HBM, high-capacity D5 and LP5 solutions, and data center SSD products, the firm expects each of these three product categories to deliver multiple billions of dollars in revenue in FY25.
• Even as DRAM gross margins improved, 4FQ24 HBM gross margins were accretive to both company and DRAM gross margins, indicative of solid HBM yield ramp.
• Expects the HBM 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, expects HBM to grow from 1.5% in calendar 2023 to around 6% in calendar 2025.
• HBM3E 12-high 36GB delivers 20% lower power consumption than competitors’ HBM3E 8-high 24GB solutions, while providing 50% higher DRAM capacity. Expects to ramp our HBM3E 12-high output in early calendar 2025 and increase the 12-high mix in shipments throughout 2025.
•  Increasing adoption of our high-capacity mono-die based 128GB D5 DIMM products, the vendor is leveraging its innovative, industry-leading LP5 solutions to pioneer the adoption of low-power DRAM for servers in the data center.
• Data center SSD demand continues to be driven by strong growth in AI as well as a recovery in traditional compute and storage.
• Gained substantial share in data center SSDs.
• Achieved a quarterly revenue record with over a billion dollars in revenue in data center SSDs in 4FQ24, and FY24 data center SSD revenue more than tripled from a year ago.

Supply outlook

• Expects 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 the company expects for DRAM in calendar 2025.
• Expects 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, the firm anticipates longer periods between industry technology transitions and moderating capital investment over time to align industry supply with demand.

NAND revenue only

Earnings call transcript