Micron FY 2Q16 Earnings Call Notes

Mark Durcan

Automotive remains strong

“In our Embedded business unit, automotive design-in activity remains strong, particularly with 20-nanometer DDR3 and low power DDR4 products. We’re seeing growth with automotive customers in greater Asia and continuing to build upon success with European and U.S manufacturers.”

AUto is an attractive business

“Yes, the automotive business has been pretty strong for us. And its also we view it as an attractive business, because the sockets are pretty sticky, the life times of the products are longer and so from a total return its very positive market for us.”

Clearly the Chinese want to be in memory markets, and now focused on organic growth but that will be tough

“Well, its — I don’t think I’ve got anything really new to say about that. I think we’ve said before that we anticipated that clearly China was interested in being the memory market and that they would look for ways to find partners or to grow organically. We’ve now heard about significant investments in organic growth. But we would remind everyone a yes, that we believe that there are significant technology hurdles and intellectual property requirements in terms of being a major player in the memory space and we think its going to be a challenging road for the — for organic and will take sometime.”

3D X-Point update

“This year we’re short of an enablement mode, and we’re working with a number of different end market segments. Some customers then have significant interest in mobile, some customers in enterprise, or big data applications, I mean mobile for low power — from the low power benefits. Early on as we ramp this technology we expect cannibalization to be low to zero. Over time, as the technology matures and drive to significantly higher volumes. I’d expect some of that volume to come out of what otherwise would have been DRAM and maybe even eventually what otherwise have been other types of Non-Volatile memory. But generally speaking, this is a differentiated technology that will grow the size of the overall memory market at least over the next two, three, four years.”

Focus not on market share, it’s on deploying equivalent advanced tech to competitors

“Our focus isn’t on market share. Our focus is on making sure that we’ve deployed equivalent advanced technology, at least equivalent advanced technology to our competitor, so that we’re not incentivising others to play for market share. And we think that’s just really a prudent thing to do as managers of our business that we should make sure that we’re putting in place efficient manufacturing production capacity and that’s what we’re very, very focused on.”

PC weak but other segments should outstrip supply growth

“Relative to PCs, yes, it continues to be weak. We think maybe down mid single-digits for the year, DRAM content maybe up about 10% for the year. We’re not expecting any big things out of PC demand when we give you our view as the demand growth for the year across all the various segments. But once you get outside of PCs, growing obviously slower than overall market supply for DRAM, and mobile growing maybe right around the market supply for DRAM. You got all these other segments that we think will out script supply growth servers, automotive, etcetera, etcetera. So, generally speaking we do believe that in aggregate things are going to take care of themselves. ”