Micron at JP Morgan Tech Conference

Kipp Bedard – Vice President, Investor Relations

PC no longer dominant demand driver

“as I mentioned, PC for the entire, 30 years I’ve been in this business was the dominant demand driver. Today it’s not. It’s the second largest market and probably — and growing the slowest.”

Going to 20% of the market, and even lower

“PC is now about 30% of the DRAM business. It will only grow about 5% this year where the entire market in DRAM consumption will grow over 30%. So by nature, it’s going to be low 20s, if not, lower than that by this time we are sitting here next year. The third largest market that consumes DRAM as the server business”

Mobile and big data driving server demand

“the amount of data that the mobile handsets create and then want to move up through the cloud or they want to request to move back down from the cloud to the handset. So servers are growing relative to that need.”

Newtorking is another growing segment

“The fourth largest single individual segment, I think, this is nothing new, those of you who have heard me speak before is kind of networking…It’s around 10% of the consumption and growing up well over 25% a year. So, in summary, what we’ve got is more than 70% of the business growing at well over 25% upwards of 50% plus and you’ve got about 30% of the business today growing at about 5%.”

Worse PC demand

“I think, we have gone through a little bit worse than expected PC demand period that has reset I believe everybody’s expectations as the industry for the year to where the unit growth in PCs”

PC OEMs have become very conservative with inventory

“The PC OEMs themselves have become very conservative starting back in January, February. They’ve been lowering inventory. If we gave you a reference, kind of relative to what we said on the conference call the time we felt like the PC industry in general. That channel probably had four to six weeks of inventory, today that’s probably three to four.”

At some point the inventory reduction will stop

“There will be a point in time here for the reasons that you mentioned plus a couple of others where that reduction of inventory will stop. And that will feel like it’s been an immediate demand reversal because we will be shipping in at the same rate that they are shipping out, not lowering the inventory numbers.”

It’s sooner rather than later

“it’s sooner rather than later. I don’t get paid as much as you did to predict the exact date. So I’m going to let you kind of keep doing that but it is sooner than later. ”

Everyone is moving capacity to mobile

“we are all moving capacity towards a mobile handset space. Again, it just makes rational sense if you have a segment that’s now the largest segment growing at 50% plus and that’s 20% more than the entire market will grow on the supply side. All of us are moving capacity in that direction. I suspect based on what I’m hearing from customers today. There is still expectations of very tight market in mobile going into the back half of the year.”

We have better visibility in mobile

“shifting from PC at April’s pricing is a slight headwind moving to mobile. We are okay with that, because again strategically, we know mobile has a two, three, four year roadmap that’s easy to see where the demand profile is going to shape up around a certain band. And we know that the PC is going to be the most volatile.”