Micron Technology (MU) Q4 FY2026 Earnings Call: Q&A Summary

Q: Ben Reitzes from Melius asked why the company expects 2028 to be tighter than 2027 and what this implies for margins.

A: Manish Bhatia stated that demand drivers like server units and agentic AI are stronger than previously anticipated, with over 75% of shipments committed for 2027. Supply remains constrained by diminishing returns from technology transitions, the rapid growth of HBM, and the long lead times required to build and equip new clean rooms.

Q: Ben Reitzes from Melius asked if recent high-level meetings regarding AI infrastructure influenced the company's upbeat guidance.

A: Manish Bhatia noted that the meetings highlighted the importance of memory in AI hardware. He explained that future security solutions will require advanced, high-performance, and low-latency memory to manage responsiveness.

Q: Melissa Weathers from Deutsche Bank asked for an update on the HBM total addressable market and the split between volume and pricing.

A: Manish Bhatia declined to provide an updated TAM figure but noted that HBM shipments are growing faster than conventional DRAM. He confirmed that pricing for 2027 was increased significantly to narrow the profitability gap with conventional DRAM.

Q: Melissa Weathers from Deutsche Bank asked about market share targets and progress on HBM 4E with NVIDIA.

A: Manish Bhatia stated that the company expects its HBM share to align with its broader DRAM market share. Scott DeBoer added that the company has been co-designing HBM 4E, or NV HBM, with NVIDIA for over a year.

Q: Atif Malik from Citi asked for a split of DRAM and NAND for the 35% of sales target by 2030.

A: Manish Bhatia clarified that DRAM volume is approximately 35% and NAND bit volume is slightly higher, noting that these agreements cover both product types.

Q: Atif Malik from Citi asked about China sales exposure and the technology gap with local competitors.

A: Manish Bhatia stated that China exposure is expected to be in the single-digit range for fiscal 2027. Scott DeBoer added that Micron remains at least two nodes ahead of China competition, with 1-gamma DRAM technology currently representing the majority of bits.

Q: Karl Ackerman from BNP Paribas asked if higher memory prices are reducing demand in mobile and client segments and if growth in SCAs is coming from this cohort.

A: Manish Bhatia explained that while unit volumes declined, revenue grew due to higher pricing and favorable mix in premium segments. He confirmed that SCAs are in place across all business units, including mobile and client.

Q: Karl Ackerman from BNP Paribas asked about the competitiveness of the in-house optimized base die for HBM 4E.

A: Scott DeBoer clarified that HBM 4E is co-designed with NVIDIA on a foundry process rather than using an in-house base die. Manish Bhatia added that the company expects this to be a high-value product.

Q: Jim Schneider from Goldman Sachs asked if the 10 new SCAs signed this quarter involve changes to pricing constructs.

A: Manish Bhatia explained that while the framework is similar, negotiations now reflect current market conditions and future tightness. He noted that the majority of agreements include floor and ceiling bands.

Q: Jim Schneider from Goldman Sachs asked if the pricing ceilings and floors have reset to higher levels.

A: Manish Bhatia confirmed that newer agreements are negotiated with an eye toward current market conditions and future tightness, though multiple frameworks are used.

Q: Chris Caso from Wolfe Research asked about the increase in construction CapEx relative to tool purchases.

A: Manish Bhatia explained that the majority of the construction CapEx increase is for clean rooms that will come online in late 2028 and beyond. Mark Murphy added that this spending does not immediately translate into bit production.

Q: Chris Caso from Wolfe Research asked about the impact of CPU strength on bit demand and supply-demand balance.

A: Manish Bhatia noted that agentic workloads on CPUs are driving high attach rates for memory, making DRAM the principal constraint in the data center.

Q: Joseph Moore from Morgan Stanley asked why supply growth is decelerating next year despite CapEx spending.

A: Manish Bhatia explained that the shift toward HBM and the associated trade ratios have a dampening effect on bit growth, and clean room space remains the principal constraint.

Q: Joseph Moore from Morgan Stanley asked if customers would increase memory specifications if more supply became available.

A: Manish Bhatia agreed that there is latent demand, noting that customers are currently maximizing compute silicon shipments with the available memory supply.

Q: Mehdi Hosseini from Susquehanna asked about NAND bit shipment expectations for 2027 through 2028.

A: Manish Bhatia declined to provide specific outlooks but noted that the company is utilizing Singapore clean room space for advanced R&D and HBM ramp. Mark Murphy added that for the first quarter, the company expects single-digit sequential bit growth and double-digit cost growth for both DRAM and NAND, with R&D spending exceeding $1 billion in 2027.

Q: Mehdi Hosseini from Susquehanna asked if the fungibility of DRAM at the wafer level helps manage costs.

A: Scott DeBoer argued that there is more differentiation in DRAM processes today than ever before. Manish Bhatia added that while running different products on the same lines helps with mix adjustments, it does not necessarily reduce costs.