Specialist
Former senior executive at Micron
Agenda
- Micron’s (NASDAQ: MU) revenue growth outlook and gross margin considerations
- NAND and DRAM supply-demand dynamics and competitive landscape, highlighting Intel (NASDAQ: INTC), Samsung (KRX: 005930), SK Hynix (KRX: 000660) and Western Digital (NASDAQ: WDC)
- Capacity expansion and utilisation trends
- Pricing trends and competitive dynamics
Questions
1.
What would you say are the key headwinds and tailwinds across DRAM, NAND and NOR?
2.
You’re predicting a downturn in H2 2022, but after making USD 27bn in revenue in 2021, Micron’s 2022 projections suggest it could hit USD 33bn in sales or revenue. Do you still think this is realistic, given the state of the market and the factors you described?
3.
Do you expect Micron’s CNBU [Compute and Networking Business Unit] revenue to increase or remain the same over the next five or so years? I think the CNBU was around 44% of the company’s revenue in 2021, and it’s naturally trying to pivot in that direction going forwards.
4.
What’s driving the volatility of Micron’s gross margins since 2019? I think they were 46% in 2019, 31% in 2020 and 38% in 2021.
5.
Micron’s COGS has been steadily increasing from 54% since 2019 up to 62%, and I imagine the inflationary environment will accelerate it in 2022. What’s driving this upwards COGS trend? Is it to do with Moore’s law slowing down?
6.
How do you place Toshiba, Samsung, SK Hynix and WDC [Western Digital Corp] competitively vs Micron in data centre PC and mobile for NAND? Who’s best-placed to serve these high-growth markets?
7.
How might the Kioxia-WDC Japanese factory closure impact market share? What are your thoughts on further consolidation in NAND more broadly and what could be the most likely combinations? Would it make sense for Micron to try and acquire WDC’s NAND assets, for example?
8.
Do you think a potential spin-out of WD’s flash business could be good or bad for Micron?
9.
How competitive are China’s investments into DRAM and NAND? Are they that destructive to the broader market and Micron specifically?
10.
We have the supply-demand dynamics and Moore’s law slowing down, but also the data centre piece in mobile and end markets that are still growing quite quickly. How do you assess the YoY growth for Micron’s solutions in these end markets over 2022 and the foreseeable future, and also the pricing trends?
11.
How could margins remain healthy if pricing is decreasing by 10% and inflation is increasing COGS?
12.
How well-placed is Micron’s manufacturing and product portfolio to serve the growing data centre end market compared to competitors’?
13.
Are most Micron customers single or dual source?
14.
How do you see the TAM on the NAND and DRAM side?
15.
How do you think the USD 900m in cash from Micron’s Lehi factory sale and 3D X ramp-down might be deployed? Do you expect it to be used to help grow the business in the data centre market?
16.
Are there any other points you would make about Micron or the broader memory industry?
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