Micron 4Q15 Earnings Call Notes

PC weak but industry fundamentals favorable

“While fourth quarter results were impacted by continued weakness in the PC sector we believe that memory industry fundamentals remain favorable over the long term and we are focused on improving our competitive”

Healthy end market demand in other segments

“Reflecting on market conditions, despite the recent softness in the PC market we continue to see healthy end market demand in other segments. Within the context of that variability, we will continue to manage product mix and allocate our capacity to maximize our opportunities over time.”

Expect demand to improve throughout 2016

“We expect the demand environment to stabilize and improve as we move through calendar 2016. In general we expect the industry supply and demand for both DRAM and NAND to be relatively balanced in 2016.”

Not a significant inventory problem in DRAM

“Interestingly enough in terms of DRAM market, except for one large channel player, the channel itself is pretty low inventory in the two to three weeks and one larger channel player who in fact services a lot of the OEMs has more than that from the fulfillment standpoint, that’s the role that they play with these customers. So it’s not a significant inventory problem in the channel today.”

PC isn’t an inventory problem, it’s a demand problem. Buyers have been conservative and could start to replenish over next three to four months

“I think to extend the question a little bit, the PC demand, the PC ecosystem is also not as much of an inventory problem as more of a demand problem and I think with new chipsets and new operating assistance and what have you, I think the buying side of the market has been a little conservative in terms of how they procured PC parts over the last three to six months and I think it’s at this point, this could be interesting to watch how the next three or four months plays out in terms of the consumer and corporate behavior, because at some point they are going to start to replenish.”

Applications for 3D crosspoint are high end gaming and enterprise storage

“The type of markets that we see, 3D Cross Point benefit from are either super high end gaming applications, which could be for just more real environment 8K type applications and provide the exact gaming performance that doesn’t have to flush out to a different type of storage media. It all could be done in 3D Cross Point. Another good one would be super high end and reliable system storage, enterprise storage applications.”

Can’t say there’s an improvement in PC demand but it’s not a high bar to recovery

“Well I think the PC is about where it’s been. I can’t advertise there’s been a major uptick in PC demand. The only data point that I would say that is new for us is that as we sit today the relative channel inventory in PCs is not a huge burden to a recovery.

I think that it’s too early to tell what consumers and even in the corporate environment are going to be doing through the holiday and through the rest of the year. So I can’t give you a great sense of what’s going to play out other than the inventory validation of what we see in the channel and that’s true not only for end units and PC. It is also overall true for PC memory relative to where the pricing pressure has been. So I don’t think it’s going to take a wild shift in behavior for PC environment to stabilize. It’s just, it’s probably too early for the holidays to see that.”

Despite slowdown in China memory content in phone is moving upwards

“On the mobile side, despite what we’ve read in the media about slowdown in China, which in fact is somewhat true, there seems to be an offset in two areas. One of which is that memory content in phones continues to move upwards, which is more broadly positive , as well as you know despite the high end and mid range SmartPhones in China, the entry level SmartPhone which are really configured to be pretty good density configurations are still in pretty good shape, coupled with other emerging markets.”

Did see some very short term improvement in DRAM pricing but then softened again

“We did see some very short term improvement on pricing at the end of mid to the end of August and even early this September. But it kind of has since, we’ve seen some softness again, some mild softness off of the high and so we are just tracking that as we look at it and see where it goes from a demand standpoint, if there is any improvement to holidays.’