Micron Technology 2026 Q4 Earnings Call

Satya, please go ahead. Thank you, and welcome to Micron Technology's fiscal fourth quarter 2026 post-earnings analyst call.

On the call with me today are Manish Bhatia, President and Chief Operating Officer, Dr. Scott DeBoer, President and Chief Technology and Products Officer, and Mark Murphy, our Chief Financial Officer. As a reminder, the matters we are discussing today include forward-looking statements regarding market demand and supply, market trends and drivers, and our expected results and guidance on other matters. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from the statements made today. We refer to documents that we have filed with the SEC, including our most recent Form 10-K and upcoming 10-Q, for a discussion of risks that may affect our results. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements.

We are under no duty to update any of the forward-looking statements to confirm these statements to actual results. We can now open up the call for Q&A.

Sure, Ben. I can start, and then if Mark wants to add anything. And thank you for the shout-out. In terms of 2027 and 2028 and our commentary, we are seeing stronger demand drivers than we've seen before. We commented about the server units continuing to grow into 2027, and of course, I think everybody's talking about how agentic AI is really growing fast, and that's creating a CPU-driven demand stream as well. As we've gone through working on our fiscal year 2027, and we commented that we have more than 75% of our shipments committed for the year. That shows a strengthening demand and allows us to shift our conversations on allocation with our customers out to 2028. So that's one element of our confidence is that 2027 is shaping up with stronger demand than maybe we had seen before.

And then, of course, as we also have now more SCA conversations with customers, including extension that we have now negotiated, that gives us more confidence in the long term as well. The combination of those two things gives us very strong outlook for demand through 2028. Then on the supply side, there is still the same structural constraints on supply growth that we have talked about before, which is diminishing returns from technology transitions versus past technology transitions. HBM growing faster than conventional DRAM through 2028, which means that as a portion of the industry's output capability, HBM is growing in terms of that share. Of course, the trade ratio, not just today's trade ratio for HBM, but future, more complex HBM having higher trade ratios, that is also going to be constraining supply.

Then it just takes a long time for these new clean rooms that the whole industry is working on to be able to build and then qualify and then equip. Even from the time they open, it takes a few quarters for meaningful shipments to come. So, that really gave us the combination of that demand outlook and this supply outlook. We made the statement that we really do not have line of sight to when supply and demand balances.

Yeah, Ben, I would maybe just add to Manish's comments that, as you noted, in 2027, we had indicated for the balance of the year that we would see margin expansion relative to Q1, a function of continued price increases, albeit at a more moderate pace.

We have said that for some time, that eventually price increases would moderate. Then at that point, in addition to just price increases at a lower rate, we have a better mix of products, and we would work our mix based on our technology and product leadership. The market conditions, as we said, we would expect to remain tight, and that would be supportive through 2028. Of course, the partial offset to price and favorable mix would be startup costs. But these are all things we are managing, we have been managing them, and we would expect to be able to sustain strong financial performance.