2022.03.31
마이크론은 호실적 비결로 데이터센터를 지목했다. 지난해 데이터센터가 메모리와 스토리지 부문에서
모바일을 앞서 가장 큰 수요처로 부상했다며, 앞으로 10년간 계속 성장할 것으로 내다봤다.
메모리 3위 美 마이크론, '어닝서프라이즈'...삼성-SK하이닉스는? (hankookilbo.com)
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(Microsoft Word - 220331_eBEST Tech Brief_\270\266\300\314\305\251\267\320) (hankyung.com)
● FY2Q22(CY1Q22) 실적 기대치 상회
FY2Q22(CY1Q22) 실적은 매출액 $7.8B(+1%QoQ), 영업이익 $2.8B(+1%QoQ), EPS $2.14로 시장 컨센서스 및
기존 가이던스를 상회했다.
DRAM 출하량은 전분기대비 한 자리수 후반 증가했고 ASP는 전분기대비 한 자리수 중반 하락했으며,
NAND 출하량은 전분기 수준이었으나, ASP는 전분기대비 한 자리수 중반 상승했다.
● FY3Q22(CY2Q22) 가이던스는 상당히 공격적
FY3Q22 가이던스는 매출액 $8.7B ± $200M, EPS $2.46 ± $0.10를 제시했다.
이는 상당히 공격적인 가이던스라고 평가하는데 이유는 DRAM Bit growth가 한 자리수 중반 증가,
NAND Bit growth가 10%중반 증가를 가정했을 때 DRAM ASP는 한 자리수 초반 하락 또는 상승하고,
NAND ASP는 20% 정도 상승해야 매출액 가이던스를 달성할 수 있을 것이기 때문이다.
물론 NAND 시장은 키옥시아의 사고 영향으로 공급 부족 상황에 접어들 것이나,
세트 업체들이 NAND 가격 인상을 어느 정도까지 받아들 일 것인지가 관건이 될 것이다.
서버 내 메모리 Cost 비중은 이미 30% 중후반 수준이며, 다른 원자재 가격들의 상승세가 지속되고 있고,
원가절감에 대한 필요성이 점점 증가할 것이기 때문이다. 더불어 CY1Q22서버 및 컴퓨팅 수요가 양호했다고 평가했는데 과거 분기별 매출 규모를 기준으로 CNBU(Computing and Networking) 부문의 매출액은 CY3Q21가 $3.8B으로 고점이었다는 점을 기억할 필요가 있다. CY2Q22 CNBU 매출액이 이를 상회할 것인지가 실적 평가에 또다른 관전 포인트가 될 것이기 때문이다
● 메모리 반도체 시장에 대한 긍정과 부정
마이크론은 지난 분기에 이어 CY2Q22에도 분명 긍정적인 시장 전망을 제시하고 있다.
모바일 및 PC 수요가 부진하나 서버 수요는 여전히 양호하고, 장비 리드 타임 증가 및 예측 불가능한 공급 환경의 불확실성(키옥시아 라인 오염 등)이 메모리 반도체 수급 밸런스를 유지시킬 것이라는 전제가 배경일 것이다.
당사는 반도체 업종 투자의견 Neutral을 유지하고 있으며, 그 이유는 공급을 제한하는 요인들도 증가했지만
최근 인플레이션 우려에 따른 금리 인상 속도가 빨라지고 있고, 그에 따른 유동성 축소가 최종 수요에 대한 불확실성을 확대시킬 것이며, 세트 업체들이 느끼는 원가 절감에 대한 니즈가 CY2Q22 들어서면서 더더욱 증가할 것으로 예상하기 때문이다.
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호실적에도 시간 외 주가는 4% 내외 수준으로 상승해 아쉬워
메모리 반도체 공급사 마이크론은 3월 29일 화요일 14:30(Mountain time)에 2Q22(2021년 12월~2022년 2월) 실적을 발표했다. 매출은 78억 달러로 컨센서스 75억 달러 대 비 상회했다. 기존 CFO가 인텔로 이직한 이후 Interim CFO 산하에서 호실적을 발표해 긍정적이었다. 시간 외 주가는 4% 내외 수준으로 상승했다. 3Q22 매출 가이던스도 예상을 상회 했기 때문이다. 원래 이렇게 매출 지표가 호조이면 시간 외 주 가는 5% 이상 상승할 수도 있는데 상승폭이 다소 제한되는 느 낌을 주었다. 1) 러시아의 우크라이나 침공 이후 공급망 관리 차원에서 원재료 재고 자산의 증가, 2) 코로나19 확산에 따른 중국 셧다운, 3) NAND 경쟁사 YMTC의 아이폰 SE 부품 공 급 가능성 소식 때문이다. YMTC가 클라우드 향으로 NAND를 공급했다면 마이크론 주가에는 더 부정적인 영향을 끼쳤을 것 으로 예상되나 아직까지 우려할만한 사항은 아닌 것으로 판단 된다.
데이터 센터와 차량용 반도체 수요 강세 지속
3Q22(2022년 3월~ 2022년 5월) 매출 가이던스는 85~89억 달러로 컨센서스 82억 달러를 웃돌았다.
매출 가이던스로 미루 어보아 DRAM과 NAND의 빗그로스는 각각 10%를 상회할 가능성이 커보인다.
데이터센터, 차량용, 사물인터넷 수요가 매 출 성장을 이끈다. 2Q22 데이터센터 매출은 전년 대비 60% 이상 성장했다. 특히 SSD 매출이 전년 대비 2배 이상 증가했 다.
차량용 및 사물인터넷 사업부 매출은 마이크론 전체 매출의 10% 이상을 차지했다.
그중 차량용 매출은 역사상 가장 높은 수준을 기록했다. 향후 차세대 전기차 모델 100 여종이 출시될 예정으로,
ADAS와 인포테인먼트에 사용되는 반도체 수 요가 지속 증가한다.
레벨3 수준의 자율주행 전기차 중 일부에 서는 메모리와 스토리지가 차지하는 원가가 750달러이다.
이는 기존 자동차의 15배가 넘는 수준이다.
산업용 사물인터넷 매출은 전년 대비 60% 이상 성장했다. 공장 자동화와 보안시스템 매출이 상승했기 때문이다.
다음 분기와 2022년 하반기에도 데이터센터와 차량용 매출이 견조할 것으로 전망한다.
서버시장에서 메모리 반도체와 스토리지의 원가 비중 높아 부담
실적 발표 내용 중에 긍정적 느낌과 동시에 아쉬운 느낌을 주 는 것은 서버시장에서 메모리 반도체와 스토리지가
차지하는 원가의 비중이었다. 마이크론 측의 발표에 따르면 BOM(Bill Of Materials) 비중은 이미 40%를 상회한다.
또한, 인공지능 과 머신러닝의 최적화된 서버에서는 더 높은 비중이라고 한다. 이에 따르면 데이터센터 수요는 견조하나 서버 DRAM과 스토 리지가 차지하는 원가 비중이 이미 상당히 높아졌기 때문에 수 요처들이 서버 DRAM 가격의 인상을 수용하기 어렵다는 것을 의미할 수도 있다. 따라서 좋은 실적이 주가 상승에 끼치는 영 향은 제한적일 것으로 판단된다.
메모리 업종에서 유의미한 주 가 상승이 전개되려면 NAND 사업에서 기대를 상회하는 사업 성과가 드러나거나
메모리 반도체 공급사의 중장기적 성장 로드맵에 드라마틱한 영향을 끼치는 이벤트가 필요할 것으로 사료된다.
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PowerPoint Presentation (seekingalpha.com)
Data Center
▪ Data center revenue in FQ2 grew >60% year over year 데이터센터 부문 매출 전년 동기대비 60% 증가.
▪ Broadened the qualifications for 1-alpha DRAM products; well positioned for DDR5 transition
▪ Introduced the 7450 – industry’s first 176-layer vertically integrated data center NVMe SSD; robust progress in qualifications of our data center NVMe SSD drives
업계 최초 176단 SSD인 데이터센터용 7450 SSD 발표
PC & Graphics
▪ PC: Saw recovery in our client revenue, driven by enterprise PCs
기업용 PC수요가 견인한 클라이언트 부문 매출 회복.
▪ Client DDR5 demand continues to outstrip supply; launched our 2400 NVMe SSD,
world’s first client SSD on 176-layer QLC NAND
클라이언트 DDR5 디램 수요가 공급을 초과하고 있다.
▪ Graphics: Strong demand for the latest generation of gaming consoles and graphics cards
Mobile & Intelligent Edge
▪ Mobile: 5G transition continues in smartphones. Achieved 1st qualification of 1-alpha LP5 DRAM. Seeing a very strong revenue ramp for our 176-layer NAND UFS products
▪ Auto: Auto revenues set a new record. New EVs are becoming like data centers on wheels; over 100 new EV models to launch worldwide in this calendar year alone
▪ Industrial: ~60% Y/Y revenue growth in FQ2, fueled by the continued ramp in applications such as factory automation and security systems
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2022.03.30
"데이터센터 수요 강세"…장밋빛 전망 내놓은 美마이크론 - 아시아경제 (asiae.co.kr)
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요약: 2분기 실적이 78억달러로 시장 전망치 상단인 77억달러를 상회.
실적은 전년 동기대비 매출이 60%증가한 데이터부문 실적이 이끔.
3분기 전망치도 시장 컨센서스 상회로 마이크론 주가는 시간외에서 4% 가까이 상승.
디램 매출은 전분기대비 2% 증가했고 전년 동기대비 29% 증가한 57억달러로 전체 매출의 73% 차지.
디램 빗그로스는 전분기대비 1자리수 후반 증가했고, 평균 판매 가격은 한자리수 중반 하락했다.
2분기 낸드 매출은 전분기대비 4%, 전년 동기대비 19% 증가한 20억달러로 전체 매출의 25% 차지.
출하량은 전분기와 비슷했고, 평균판매가격은 강한 SSD에 힘입어 1자리수 중반 상승했다.
아래 기사에서 메모리는 디램, 스토리지는 낸드를 언급하는 것이다.
2022년2분기(12월~2월말) 실적 발표
Company Participants
Farhan Ahmad - Vice President, Investor Relations
Sanjay Mehrotra - President & Chief Executive Officer
Sumit Sadana - Chief Business Officer & Interim CFO
Conference Call Participants
C.J. Muse - Evercore
Vivek Arya - Bank of America Securities
John Pitzer - Credit Suisse
Timothy Arcuri - UBS
Pierre Ferragu - New Street Research
Mehdi Housseini - SIG
Chris Danely - Citi
Joe Moore - Morgan Stanley
Toshiya Hari - Goldman Sachs
Ambrish Srivastava - BMO
Today's discussion of financial results is presented on a non-GAAP financial basis, unless otherwise specified.
오늘 실적 발표는 논갭 기준으로 말한다.
A reconciliation of GAAP to non-GAAP financial measures may be found on our website. We encourage you to visit our website at micron.com throughout the quarter for the most current information on the company, including information on the financial conferences that we will be attending. You can also follow us on Twitter, @MicronTech.
As a reminder, the matters we are discussing today include forward-looking statements. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from the statements made today.
We refer you to the documents we file with the SEC, specifically our most recent Form 10-K and 10-Q for a discussion of risks that may affect our future results. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. We are under no duty to update any of the forward-looking statements after today's date to conform these statements to actual results.
I'll now turn the call over to Sanjay.
Sanjay Mehrotra
Thank you, Farhan. Good afternoon, everyone. Micron delivered an excellent performance in fiscal Q2 with results above the high end of our guidance. We grew revenue and margins sequentially while driving favorable mix and cost reductions amid ongoing global supply chain challenges. We saw broad-based demand for our products with our SSD products achieving record revenue and our auto market revenue also reaching an all-time high.
Execution was outstanding with our industry-leading 1-alpha DRAM and 176-layer NAND technology node ramps delivering strong cost reductions. Our portfolio transformation continues to gain momentum as we lead the industry on the DDR5 transition and grow our mix of NVMe data center SSDs.
Following a solid first half, we are on track to deliver record revenue and robust profitability in fiscal 2022 and remain well positioned to create significant shareholder value in fiscal '22 and beyond.
In fiscal Q2, 1z and 1-alpha DRAM combined represented the majority of our DRAM bit shipments, while 176-layer NAND represented the majority of our NAND bit shipments.
회계년도 2분기에 1z 디램과 1-alpha 디램이 디램 출하량의 대부분을 차지하고 176단 낸드가 대부분 차지.
Our 1-alpha DRAM and 176-layer NAND products are achieving excellent yields, providing us with solid front-end cost reductions and contributing meaningful revenue. We qualified additional products on these advanced nodes with a broad set of customers, which sets us up for continued strong revenue ramp in the second half of the fiscal year.
We are tracking several quarters ahead of the industry in ramping products based on these leading-edge process technologies. We are also investing to maintain technology leadership for the next decade and making good progress in the development of future technology nodes. Micron is not only a technology leader, but also the industry leader in quality with the majority of our customers ranking us #1.
Our leadership in quality is an important differentiator for Micron, particularly in fast-growing data center and automotive markets, where our quality scores are excellent.
We have also strengthened our position as a strategic supplier to our customers as demonstrated by our commitment to supply continuity amid ongoing semiconductor supply chain challenges this past quarter.
In late December, a government-mandated COVID-19 lockdown impacted production output at our back-end facility in Xian, China. The Micron team executed with tenacity to return the Xian site back to normal output levels post lockdown. As a result of this outstanding effort, we mitigated the lost output from Xian and delivered on our customer commitments for the quarter by leveraging our global manufacturing network. Additional COVID-19-related lockdowns in the region present a risk to the global electronic supply chain, and we continue to monitor the situation closely.
The global semiconductor supply chain is experiencing pressure due to impact of Russia's invasion of Ukraine. The region is an important source for the global supply of noble gases and other critical minerals that are used in semiconductor manufacturing. We have strategically diversified our supply chain over the last several years and maintained appropriate inventories of materials and noble gases. We currently do not expect any negative impact to our near-term production volumes because of the Russia-Ukraine war, but we do expect an increase in our costs as we secure supply of certain raw materials that could be at risk.
We also remain vigilant in this dynamic situation and are engaged with our key suppliers to ensure continuous availability of materials to support our operations.
Now let's review our end markets.
Demand for memory and storage is broad, extending from the data center to the intelligent edge and
to a growing diversity of user devices.
Memory and storage revenue has outpaced the rest of the semiconductor industry over the last 2 decades,
and we expect this trend to continue over the next decade, thanks to ongoing advancement of AI, 5G
and EV adoption.
메모리와 스토리지 수요는 데이터센터부터 인텔리전트 엣지와 점증하는 사용자 기기의 다양화로 광범위하다.
지난 20년간 메모리와 스토리지 매출은 나머지 반도체 매출 증가폭보다 더 많았다.
이러한 기조는 향후 10년동안도 AI, 5G나 전기차 덕분에 마찬가지일 것이다.
Our team's execution on strengthening our product portfolio has been outstanding with several new product launches and customer qualifications in fiscal Q2, achievements that we are very proud of.
Last year, data center became the largest market for memory and storage, eclipsing the mobile market.
지난해 데이터센터 부문 매출은 모바일 시장을 대체하면서 메모리와 스토리지의 최대 시장이 되었다.
Looking ahead, we expect data center demand growth to outpace the broader memory and storage market over the next decade, fueled by secular drivers in cloud and healthy enterprise IT investment. Memory and storage share of server bond costs already exceeds 40%, and this number is even higher for servers optimized for AI and ML workloads. This growth is supported by new heterogenous computing architectures, the increase in data-intensive workloads and ongoing displacement of HDDs by SSDs.
클라우드와 기업의 IT 투자에 힘입어 데이터센터 부문의 디램과 낸드 수요는 다음 10년간
나머지 디램과 낸드 시장 수요보다 더 많을 것이다.
In the fiscal second quarter, data center revenue grew more than 60% year-over-year, supported by robust demand across our DRAM and SSD portfolio.
회계년도 2분기 데이터센터 부문 매출은 디램과 낸드의 굳건한 수요에 힘입어 전년 동기대비 60%이상 증가하였다.
We have broadened the qualifications for our 1-alpha DRAM products and are well positioned to support the data center DDR5 transition driven by new CPU platforms, which are targeted to begin ramping later this calendar year and gain momentum in 2023.
Following the introduction of our 7400 SSD, in fiscal Q2, we introduced the 7450, which is the industry's first 176-layer vertically integrated data center NVMe SSD. These Gen4 NVMe data center drives are generating an enthusiastic response from our customers. We are making robust progress in our qualifications of these drives with data center customers, which has contributed to a doubling of our fiscal Q2 data center SSD revenues year-over-year. We expect strong growth of data center SSD revenues to continue for the remainder of this fiscal year.
In fiscal Q2, we saw recovery in our client revenue driven by strength in enterprise PCs, which more than offset softer consumer and Chromebook demand. We expect that calendar '22 PC unit sales will be flattish versus last year's sales, but we expect solid growth in DRAM and NAND content driven in part by increasing mix of content-rich enterprise desktops and laptops.
2분기에 클라이언트 부문 매출은 기업용 PC부문 매출이 약해진 소비자용 PC와 크롬북 매출을 상쇄하면서
회복하였다.
2022년 PC부문 매출은 전년도와 비슷하겠지만, 디램과 낸드 장착량이 더 많은 기업용 컴퓨터 판매가 증가하면서
디램과 낸드의 굳건한 성장이 예상된다.
We are leading the industry's client to DDR5 transition, and our DDR5 revenue continues to increase as multiple PC customers launch next-generation notebooks. Client DDR5 demand continues to outstrip supply, and we are seeing meaningful price premiums over DDR4 alternatives.
DDR5 매출은 다수의 PC생산자가 신규 노트북을 출하하면서 지속적으로 증가할 것이다.
DDR5 수요가 공급을 초과하면서 DDR5 대비 의미있는 가격 프리미엄이 있을 것이다.
Building on our QLC leadership, in fiscal Q2, we also launched our 2400 NVMe SSD, the world's first client SSD built on 176-layer QLC NAND.
Micron maintains a leading position in the fast-growing graphics market. We have a broad product portfolio, featuring industry-leading product performance and deep partnerships with leading GPU suppliers. In fiscal Q2, revenues grew year-over-year driven by strong demand for the latest generation of gaming consoles and graphics cards.
Our advanced GDDR6X continues to lead the industry in performance. And in fiscal Q2, we began revenue shipments of our next-generation GDDR6X solutions.
Fiscal Q2 mobile revenue grew slightly year-over-year as the 5G transition continues in smartphones.
2분기 모바일 부문 매출은 5G 스마트폰으로 지속적인 전환으로 전년대비 약간 증가하였다.
We see some weakness in the China market as the local economy slows, smartphone market share shifts and some customers take a more prudent approach to inventory management. Mobile memory and storage demand continues to be supported by content-hungry applications and the ongoing transition from 4G to 5G, which is driving 50% higher DRAM content and the doubling of NAND content. 5G smartphone sales are expected to grow to 700 million units in calendar year '22.
중국 시장의 경기 침체로 중국 매출은 감소하였다. 몇몇 고객은 재고관리에 더 신중해졌다.
모바일 메모리와 스토리지 수요는 많은 장착량을 필요로하는 앱과 4G스마트폰에서 5G로의 전환으로
지속적으로 창출되고 있다.
5G스마트폰은 4G스마트폰에 비해 디램은 50%, 낸드는 100% 더 장착한다.
In fiscal Q2, we achieved the first qualification of our 1-alpha LP5 DRAM, which delivers more than a 15% power improvement over the previous generation, enabling our customers to offer an improved 5G experience with better battery life. We are also seeing a very strong revenue ramp for our 176-layer NAND UFS products, which are now qualified in nearly 50 different OEM platforms.
마이크론의 1알파 모바일 디램은 이전 디램보다 전력을 15% 절감하기 때문에, 배터리 수명이 늘어서
고객들에게 향상된 5G환경을 제공할 수있다.
The automotive and industrial segments are expected to be the fastest-growing memory and storage markets over the next decade.
자동차와 산업부문은 향후 10년간 메모리와 스토리지가 가장 빠르게 성장하는 시장이 될것으로 예상된다.
Today, more than 10% of our revenue comes from these end markets, and we are exceptionally well positioned as a market share leader. In fiscal Q2, our auto revenue set a new record driven by robust demand for memory and storage. Auto unit production remains below demand constrained by numerous supply chain challenges, including logic and analog semiconductor component shortages.
현재 마이크론 매출의 10%정도가 자동차와 산업부문에서 나오는데, 마이크론은 이 시장에서 선두주자로
위치한다. 2분기에 자동차부문 매출은 굳건한 디램과 낸드 수요로 신기록을 달성했다.
자동차 생산은 로직과 아날로그 반도체 부품 부족으로 수요를 못맞추고 있다.
The Russian invasion of Ukraine has also impacted auto bills. Nevertheless, the demand for memory and storage remains strong driven by auto content growth.
러시아와 우크라이나 전쟁은 자동차부문 매출에 영향을 주었다.
그럼에도 불구하고 자동차에 필요한 디램과 낸드의 장착량 증가로 수요는 굳건하였다.
New EVs are becoming like data center on wheels, and we expect over 100 new EV models to launch worldwide
in this calendar year alone.
These new EVs include advanced ADAS and in-vehicle infotainment features that have significantly higher memory and storage requirements. In fact, some of these Level 3 autonomous EVs have about $750 in memory and storage content, which is 15x higher than the average car.
신규 전기차는 바퀴달린 데이터센터가 되고 있다.
올해 100개 모델의 전기차가 출시될 것으로 예상된다.
신규 전기차는 발전된 ADAS와 내장 인포테인먼트를 포함하는데, 이는 상당히 증가된 디램과 낸드를 탑재한다.
레베3의 전기차 1대에는 750달러어치의 디램과 낸드 들어간다.
In Industrial IoT, we saw approximately 60% year-over-year revenue growth, fueled by the continued ramp in applications such as factory automation and security systems.
산업용 사물인터넷 부문에서 마이크론은 공장자동화와 보안시스템등 수요 증가에 힘입어
전년 동기대비 매출이 60% 증가하였다.
Turning to the market outlook. Our expectation for calendar '22 industry demand is largely unchanged from our last earnings call. We expect calendar '22 industry bit demand growth to be in the mid- to high teens for DRAM and at approximately 30% for NAND. We anticipate underlying demand in calendar '22 to be led by data center, ongoing adoption of 5G smartphones and continued strength in automotive and industrial markets.
시장 전망. 2022년 디램 빗그로스는 10%대 중후반정도, 낸드 빗그로스는 30%정도일 것이다.
Currently, we see a healthy supply-demand balance across both DRAM and NAND given these demand trends, supply discipline across the memory industry, long semiconductor manufacturing equipment lead times and reduced NAND supply from some of our competitors that experienced a contamination issue in their fab.
현재 수급 균형은 디램과 낸드 모두 잘유지되고 있다.
공급은 디램의 경우 장비 리드타임이 길어지고 있고, 낸드는 경쟁 회사의 공장내 오염 사고로 공급이 감소되었다.
Nonmemory component shortages are improving, and we expect that further improvements should support memory and storage demand growth for the rest of this year.
메모리를 제외한 다른 부품 부족사태는 완화되고 있는데,
향후 올해 남은 기간 더많이 상황이 개선되면 디램과 낸드 수요도 증가할 것이다.
However, there are some pockets where semiconductor shortages have not improved as fast as we had expected, and these shortages are likely to continue into calendar year 2023. We are mindful of increased macroeconomic uncertainty and remain vigilant of any changes in market conditions.
반도체 공급 부족 사태가 우리가 기대하는만큼 빠르게 회복되지 않고 2023년까지 계속될 것이라는 우려가 있다.
Turning now to Micron's bit supply growth expectations for the year. Consistent with the rest of the industry,
we are experiencing a challenging environment for equipment and material suppliers.
However, due to strong execution by Micron's operations team, our calendar year '22 bit supply growth for DRAM and NAND remains unchanged from prior expectations and will be in line with industry demand.
We are on track to deliver record revenue with solid profitability in fiscal year '22, and we continue to expect strong bit shipment growth in the second half of the fiscal year.
마이크론의 올해 공급 빗그로스는 이전 예상치와 같고 산업 수요 빗그로스와 같을 것이다.
회계년도 2022년에 견조한 이익과 매출 신기록을 달성할 것이고, 하반기에도 강한 빗그로스 증가를 예상한다.
We expect our cost reductions to outpace that of the industry this year driven by the exceptionally well-executed ramp of our world-class 1-alpha DRAM and 176-layer NAND nodes.
However, across the industry, there are cost challenges stemming from supply chain and inflationary pressures, which will limit cost reductions this year for the industry. We remain confident in our long-term technology road map and our ability to drive competitive cost reductions for years to come.
I will now turn it over to Sumit.
Sumit Sadana
Thanks, Sanjay. Micron delivered excellent fiscal Q2 results marked by record revenues across multiple products and markets, strong profitability and generation of over $1 billion in free cash flow. I'm particularly excited by the execution of our industry-leading 1-alpha DRAM and 176-layer NAND technology ramp and the accelerating momentum of our product portfolio transformation.
Fiscal Q2 revenue was approximately $7.8 billion, up 1% quarter-over-quarter and up 25% year over year.
Revenue was particularly strong in client and cloud markets.
Fiscal Q2 DRAM revenue was $5.7 billion, representing 73% of total revenue.
2분기 매출은 전분기대비 1% 증가하고, 전년 동기대비 25% 증가한 78억달러.
클라우드와 클라이언트 매출이 강했다.
2분기 디램 매출은 전체 매출의 73%인 57억달러에 달했다.
DRAM revenue increased 2% quarter-over-quarter and was up 29% year-over-year. Sequentially, bit shipments increased in the high single-digit percentage range, while ASPs declined in the mid-single-digit percentage range.
디램 매출은 전분기대비 2% 증가했고 전년 동기대비 29% 증가했다.
디램 빗그로스는 전분기대비 1자리수 후반 증가했고, 평균 판매 가격은 한자리수 중반 하락했다.
Fiscal Q2 NAND revenue was $2 billion, representing 25% of Micron's total revenue.
NAND revenue increased 4% quarter-over-quarter and was up 19% year-over-year.
Sequential bit shipments were flat, and ASPs increased in the mid-single-digit percentage range due to stronger mix of SSDs, more than offsetting like-for-like price declines.
2분기 낸드 매출은 전분기대 4%, 전년 동기대비 19% 증가한 20억달러로 전체 매출의 25% 차지.
출하량은 전분기와 비슷했고, 평균판매가격은 강한 SSD에 힘입어 1자리수 중반 상승했다.
Our ongoing portfolio transformation and a solid front-end cost reduction drove sequential gains in gross margin in NAND despite sequential price declines in most products.
Now turning to our fiscal Q2 revenue trends by business unit. Revenue for the Compute and Networking Business Unit was $3.5 billion, up 2% sequentially and up 31% year-over-year. Cloud generated record DRAM revenue, and client DRAM revenues also performed well in the quarter.
Revenue for the Mobile Business Unit was $1.9 billion, down 2% sequentially and up 4% year-over-year. Our Mobile business continues to perform well, building on our leadership in managed NAND and MCPs as well as our strong relationships with all smartphone customers.
Revenue for the Storage Business Unit was $1.2 billion, up 2% sequentially and up 38% year-over-year. We achieved record SSD revenues, which were up approximately 80% year-over-year. Our storage business is gaining momentum, growing revenue as well as profitability as we become the first in the industry to ramp several 176-layer NAND SSDs from QLC and TLC client products to vertically integrated data center SSDs.
Finally, revenue from the Embedded Business Unit was $1.3 billion, up 5% sequentially and up 37% year-over-year. Our Embedded Business Unit saw strong demand across automotive and industrial markets, with auto revenue hitting a new record. The consolidated gross margin for fiscal Q2 was 47.8%, up approximately 80 basis points quarter-over-quarter. Gross margins benefited from improvements in our portfolio mix as we ramped several high-value solutions and from manufacturing cost reductions.
Operating expenses in fiscal Q2 were $974 million, near the midpoint of our guidance range.
Fiscal Q2 operating income was strong at $2.8 billion, resulting in an operating margin of 35%, flat quarter-over-quarter and up from 20% in the prior year. Fiscal Q2 adjusted EBITDA was $4.5 billion, resulting in an EBITDA margin of 58%, up from 57% in the prior quarter and up from 45% in the prior year. Non-GAAP earnings per share in fiscal Q2 were $2.14, down slightly from $2.16 in fiscal Q1 and up more than 100% from the $0.98 in the year ago quarter.
The sequential increase in fiscal Q2 tax rate impacted Q2 EPS by $0.04 per share.
Turning to cash flows and capital spending. We generated $3.6 billion in cash from operations in fiscal Q2, representing 47% of revenue. Net capital spending was $2.6 billion during the quarter. We continue to expect fiscal 2022 CapEx to be in the range of $11 billion to $12 billion with the CapEx being roughly even between the first and second half of the fiscal year.
Our free cash flow for fiscal Q2 was strong at slightly over $1 billion. We remain confident in our ability to generate significant free cash flow in the second half of the fiscal year, substantially higher than that in the first half. We completed share repurchases of $408 million or approximately 4.8 million shares in the quarter. Including our dividend payment, we returned around $520 million to shareholders in fiscal Q2. From the inception of the share repurchase program in fiscal 2019, we have deployed $4.7 billion towards repurchasing 94 million shares at an average price of $50 per share. In addition, we have deployed approximately $800 million towards settling convert premiums, which reduced our diluted share count by 19 million shares.
Combining the share repurchases, convert premiums and dividends, we have returned to shareholders $5.8 billion or 64% of our cumulative free cash flow in this time frame. We remain committed to returning more than 50% of the cross-cycle free cash flow through a combination of dividends and buybacks. As we have mentioned before, we will be opportunistic in share repurchases and more aggressive when the shares are trading at larger discounts to intrinsic value.
Our Board of Directors approved a quarterly dividend of $0.10 to be paid on April 26 to shareholders of record on April 11.
Our ending fiscal Q2 inventory was $5.4 billion, and average days of inventory for the quarter was 113 days. Our fiscal Q2 DIO increased sequentially due to an increase in raw materials and WIP to support demand for the second fiscal half. Finished goods inventory declined quarter-over-quarter in both DRAM and NAND.
We ended the quarter with $11.9 billion of total cash and investments and $14.4 billion of total liquidity. Our fiscal Q2 total debt was $7.1 billion.
Now turning to our outlook for the fiscal third quarter. Our overall business is tracking ahead of our plans a quarter ago, and demand is strong across most end markets with some regional challenges that Sanjay referenced earlier. Near term supply and pricing trends are constructive. Our improved fiscal year financial outlook is increasing our variable compensation expenses, which will impact our costs in fiscal Q3. We are also seeing cost impacts from continuing inflationary pressures and from supply chain mitigation actions resulting related to industry-wide shortages.
Additionally, due to the pull-in of cost reductions in Q2, we expect more modest front-end cost reductions in Q3 on a sequential basis. We do expect both DRAM and NAND gross margins to increase sequentially in fiscal Q3. A higher mix of NAND revenue in our consolidated total will affect our consolidated gross margin as our DRAM gross margins are substantially higher than our NAND gross margins.
With all these factors in mind, our non-GAAP guidance for fiscal Q3 is as follows. We expect revenue to be $8.7 billion, plus or minus $200 million, which will represent a new record for quarterly revenues; gross margin to be in the range of 48%, plus or minus 100 basis points; and operating expenses to be approximately $1.05 billion, plus or minus $25 million.
We expect our non-GAAP tax rate to be approximately 10% for fiscal Q3. Based on the share count of approximately 1.14 billion fully diluted shares, we expect EPS to be $2.46, plus or minus $0.10. We remain on track to deliver record revenue and solid profitability and free cash flow in fiscal 2022.
In closing, Micron continues to deliver strong cross-cycle performance. Revenue growth has significantly outpaced the broader semiconductor industry, gross margins have averaged over 40%, and operating margins have averaged around 30%. Micron's financial foundation and outlook have never been stronger as we build on the momentum created by our portfolio transformation, leadership technology road map and manufacturing excellence.
I will now turn it back to Sanjay.
Sanjay Mehrotra
Thank you, Sumit. I'm proud to note that earlier this month, Micron was named one of the world's most ethical companies by the Ethisphere Institute. This recognition reflects our global team's dedication to holding ourselves the highest ethical standards both in how we operate and how we pursue environmental and social responsibility.
We continue to manage our business with a discipline and foresight that is driving industry-leading technology ramps, improving our product portfolio and strengthening our customer relationships. A strong first half performance and our guidance for an all-time record quarter show our continued progress toward delivering record fiscal '22 revenues and robust profitability.
Given our technology leadership, Micron is in an excellent position to capitalize on the broad trends that are driving demand for DRAM and NAND solutions, solutions that transform data into better customer experiences and greater business value.
I look forward to seeing you at our Investor Day presentation on May 12 in San Francisco, where we will discuss the technology drivers behind these trends in greater depth and detail Micron's strategies to seize the opportunity ahead.
Thanks for joining us today, and we'll now open for questions.
Question-and-Answer Session
Operator
[Operator Instructions] Our first question comes from the line of C.J. Muse of Evercore.
C.J. Muse
I guess first question, as I look at your results, the mix and operational performance is excellent
. And as you look ahead to the second half, you did talk about a pull-in of costs in the February quarter,
but would be curious to hear how you're thinking about mix, both like-for-like in DRAM and NAND into the second half of the fiscal year and how we should think about kind of the gross margin trajectory from here.
Sumit Sadana
All right. So in terms of the gross margins and the mix, I'll just point out that for FQ2, for example, we had exceptionally strong performance in gross margin due to the ramp of our 1-alpha and 176-layer NAND and our portfolio mix.
And our NAND gross margins actually improved -- due to mix effects alone.
And of course, we had good cost reductions in 176-layer NAND. So that momentum is continuing.
So as I look forward to FQ3, you have seen that the gross margin guidance at the midpoint is sequentially higher.
So we are very positive on our gross margin trajectory going forward.
I want to point out a couple of things that are important here.
So both NAND and DRAM gross margins are expected to improve sequentially in FQ3.
And as you highlighted, we have spoken about some cost improvements that got pulled into FQ2 so that’s going to have little bit of a dampening effect on the cost improvements we will see sequentially.
But there are a couple of important factors that are going to affect our FQ3 gross margin by about 100 basis points.
The first one is that our variable compensation accrual is increasing sequentially from FQ2 to FQ3 because our overall profitability forecast for the year -- for the fiscal year is quite a bit higher than we were expecting originally. So that is increasing our bonus accrual. That impacts costs in the following quarter. We have already taken that impact in the OpEx for FQ2, but it will impact costs in FQ3. So that's an impact on gross margin sequentially in FQ3. And the other aspect is that our NAND business in FQ3 will grow faster than our DRAM business in FQ3.
So that has a little bit of an impact on the consolidated gross margin.
So both NAND and DRAM businesses will have sequential improvement, but NAND will grow faster.
So mathematically, it will just have a little bit of an impact. So the 2 of these issues between the bonus accrual and the NAND mix has about just over a 100 basis point impact on gross margin going from FQ2 to FQ3. And in spite of that 100 basis point impact, we are forecasting improvement in gross margin in going from FQ2 to FQ3.
So overall, really strong margin performance, I feel.
And you asked a question about mix. You see that our data center SSD revenue is improving substantially.
Sanjay mentioned in his prepared remarks that in FQ2, our revenue doubled year-on-year in the data center.
We expect continued growth in the data center in the next couple of quarters as well.
So that's a positive for our gross margins. We also have leadership in DDR5.
That kind of mix improvement is also good for us because we do have good gross margins there.
So overall, we feel positive about the trajectory into FQ3 and very constructive about FQ4 profitability as well.
Of course, we are not going to guide for FQ4, so we'll leave it at that for now.
Operator
Our next question comes from Vivek Arya of Bank of America Securities.
Vivek Arya
Interesting to see that the strong outlook, and you're maintaining the full year kind of industry view unchanged also even though there have been some recent kind of softer data points and deceleration in PC and smartphone demand.
Is this just the case of data center strength overpowering those headwinds?
And what are you doing to make sure that you don't oversupply to the data center?
질문--> PC와 스마트폰 수요가 약해지고 있다는 최근 데이터에도 불구하고 마이크론 사장은 올해 강한 실적 전망을 유지하고 있다. 이것은 데이터센터부문의 강한 실적이 다른 부문의 약한 실적을 넘어설 수있다는 것인가?
또 데이터센터향 공급과잉이 발생하지 않는다는 확신하는 이유는 무엇인가?
Sanjay Mehrotra
So certainly, let me take this question. Regarding PC, what I would like to point out is that in PC, enterprise and desktops are strong. Chromebooks and consumer PCs have had some weakness as is well known, but enterprise and desktops are strong. And that's a favorable mix for us because enterprise and desktops take higher content of both DRAM and NAND.
So while we look at PC unit growth on a year-over-year basis to be flattish, the enterprise and desktop mix is favorable in terms of DRAM and flash content requirements there.
마이크론 사장 답변---> PC부문에 관해서 내가 지적하고 싶은 것은 기업용 PC와 데스크탑 수요는 강하다.
크롬북과 개인용 컴퓨터 수요는 알려진대로 약하다.
하지만 기업용과 데스크탑 컴퓨터는 크롬북과 개인용 컴퓨터보다 더 많은 디램과 낸드를 장착한다.
그래서 올해 PC 판매 수량은 지난해와 비슷할 것이지만, 더 많은 디램과 낸드를 탑재하는
기업용 컴퓨터와 데스크탑을 합한 판매 수량 증가는 매출에 우호적이다.
And data center, certainly a strong market for us. Second half of calendar year '22 should be strong for data center because of new CPUs that are expected to be launched, which will be driving greater content in the servers.
So data -- and you have heard about various hyperscalers talking about their investments -- their CapEx investments in data center as well.
데이터센터는 매우 강한 시장이다.
캘런더 2022년 하반기에는 더 많은 메모리를 장착할 수있는 신규 서버 CPU가 출시되기 때문에 데이터센터향
강한 매출이 있을 것이다.
당신은 하이퍼스케일 데이터센터의 투자 소식을 이미 들었을 것이다.
And again, all the workloads related to AI/ML are just driving greater content within the data center space.
다시 언급하지만, 인공지능과 머신러닝에서 발생하는 작업량은 데이터센터내 장착량 증가를 유도하고 있다.
But it's not just about data center or the aspects of PC that we just discussed. Of course, 5G smartphones continuing to drive strong DRAM and NAND content as we mentioned; and automotive market, strong growth driver as well.
So the point is that the demand is broad-based and demand, we expect to be strong going forward as well. And of course, on the aspect of supply, of course, the supply is contained in the industry because of the discipline on CapEx that has been exercised by the various players. And of course, on the NAND side, the aspect of the contamination issue that impacted a competitor's fab and impacted the supply in NAND in a big way there, too. So overall, healthy environment that we see for -- in terms of DRAM and NAND supply and demand balance through the year.
데이터센터와 PC만이 아니다. 5G 스마트폰과 자동차부문도 강하게 성장하는 시장이다.
요점은 수요가 광범위한 분야에서 발생하고, 이 수요가 강하게 증가할 것이라는 것이다.
디램과 낸드의 수급 균형이 올해 내내 지속되는 건강한 환경을 볼 수있을 것이다.
Operator
Our next question comes from John Pitzer of Credit Suisse.
John Pitzer
Congratulations on the strong results. Sanjay, you've spent the last several years trying to reposition the NAND portfolio to higher-value products. I'm kind of curious, relative to the May guide of NAND growing faster sequentially than DRAM, can you help us better understand what products and end markets are really driving that? And is this really the fruits of some of your qualification labors? And as you answer the question, I'd be curious, when you think about NAND gross margins, what's the impact as the mix continues to improve? How much of the gap between NAND and DRAM do you think you can close over time? Or how much more upside do you think there is in the NAND gross margin business over time as you optimize the portfolio?
Sanjay Mehrotra
So certainly, in NAND, I think our team has done a great job in leading the industry by several quarters with 176-layer NAND technology and now deploying it into various products. We talked about in our prepared remarks some of the SSDs that we have introduced now for data center as well being the first ones to introduce data center NVMe SSDs with 176-layer NAND technology with vertically integrated solutions, including our own controllers.
Our manufacturing ramp has been excellent as well. They are really exceptionally executed in terms of our yields, in terms of production ramp, in terms of quality. And all the work that we have been putting in over the course of last several years absolutely is coming to fruition here. We have had -- we have enjoyed already the gains in share with respect to mobile-managed NAND solutions both on the MCP side that contain DRAM and NAND solutions as well as on the discrete NAND side. And you have seen how we have grown our share from low single digits a few years ago to now in the high teens in terms of our share in the market. So strong performance already enjoyed on the mobile NAND side of the business.
And now SSD is getting absolutely into high gear here. Our client SSDs, our introduction of QLC, 176-layer SSD, our data center NVMe SSDs, all the work that we have vertically integrated solutions with our own controllers, all this work that we have been doing for quite some time is hitting the market now, and we are well positioned to gain share in the SSD space in the client as well as on the data center side. And all of this being built on the foundation of leading, highly cost-effective 176-layer NAND technology positions us well for improvements in our revenue outlook for NAND as well as for our profitability outlook for NAND.
And in terms of the differences between DRAM and NAND, of course, as Sumit was just earlier highlighting that there are significant differences in the industry margins of DRAM as well as NAND and certainly for Micron as well. But the point is that our margins in NAND are improving given the accelerating portfolio of momentum we have and our ability to really address wide range of end-market applications from smartphone to client SSDs to data center SSDs as well as strong position in the channel markets as well.
Operator
Our next question comes from Timothy Arcuri of UBS.
Timothy Arcuri
I just had a quick question on cost as well. So if I look at the slide, Sanjay, where you're talking about the current outlook, the verbiage change to basically reflect the fact that you're costing down better this year than the industry. And of course, there are headwinds on cost for the industry this year. But I'm wondering whether your ability to outpace the industry's cost down will also extend into next year. Because if I look at the verbiage on the slide, last quarter, you said that you think that you'll be competitive with the industry over the longer term. So I'm just wondering whether you think that this is a 1-year thing where you're costing down better than the industry? Or is this -- can this be sustained into next year?
Sanjay Mehrotra
We feel really good about our technology road map. And just like we have led the industry with our 1-alpha DRAM as well as with our 176-layer NAND, we certainly plan to lead the industry with our future generation nodes as well, and we are making good progress on those. And those nodes will be introduced sometime in calendar year '23 time frame as well. So really, it's our technology leadership position and our ability to successfully ramp it into production across a broad range of products, is key to our strength in continuing our cost position in the industry. So we feel very good about our cost position versus our competitors going forward as well.
Operator
Our next question comes from Pierre Ferragu of New Street Research.
Pierre Ferragu
I have, first, like very quick simple one on the mobile market. So it's slowing sequentially now. What kind of visibility do you have there? Do you think we are reaching like a -- kind of like plateau in content increase in the kind of growth that 5G generated in that market? Or is that something different and more temporary?
And then I have like a broader question for you guys. Your peers in logic are very active on, I would say, the geopolitical front, investing in the U.S., investing in Europe to create a more balanced manufacturing footprint in the world. And we don't hear much about that in the memory market. And so I was wondering if there could be a topic there, if there are conversations and is that something that could benefit Micron at some point.
Sanjay Mehrotra
So it's a great position to be in today that we have Sumit here as interim CFO as well as our Chief Business Officer. So I will actually let him address the first question of yours, and then I will take the second question.
Sumit, go ahead with the first one.
Sumit Sadana
Sure, Sanjay. So Pierre, thanks for that question. So in terms of the model average capacities node, we don't see this anywhere close to a plateau of any kind. We are very positive on average content growth in mobile. The 5G transformation in the industry continues in the handset portfolio. So if you think about an industry of about 1.4 billion smartphones approximately being sold on an annual basis, about 500 million or so in calendar 2021 were sold as 5G. We expect a 40% growth to 700 million being sold as 5G handsets this year. And a 5G handset has typically 50% more DRAM content, more than double the NAND content of a 4G handset. So that trend has a lot to run still.
And I think on the -- even beyond that, we do expect applications to come up that take advantage of 5G in ways that are going to continue to drive the average capacities for both DRAM and NAND hire. So there's plenty of room to run there.
Yes, the smartphone business, we do expect a low single-digit sort of unit volume growth in this calendar year overall for the smartphone volumes, consolidated volumes overall. And average capacity is then on top of that. So the overall growth is going to still be robust. And keep in mind, we are going to enter a seasonally stronger period when new handsets get introduced in the fall for the mobile business. So that's going to be another catalyst as well.
So with that, I will pass it over to Sanjay.
Sanjay Mehrotra
Thank you, Sumit. And Pierre, regarding your second question, so of course, as you know, Micron has made investments over the course of last few years in our clean rooms in the U.S., in Taiwan, in Singapore as well as Japan. In terms of cleanroom expansions in these locations, again, leveraging our globally well-diversified manufacturing footprint, these cleanroom expansions position us to implement the technology transitions in our production.
And we have not added new wafer capacity, but we have invested really prudently over the course of last few years in cleanroom expansion, positioning us well to deliver on technology transitions, which are -- which is what is positioning us to drive our cost reductions as well as bit growth in line with the demand growth.
As we look ahead, we have announced in October of last year that we would be looking at investing more than $150 billion over 10 years in leading-edge memory manufacturing and R&D on a global basis. So of course, we have also, as part of that, highlighted that in '25-'26 time frame, we would be needing to add new wafer capacity for DRAM in order to continue to meet the increase in demand for the later half of this decade through the 2030 time frame.
In that regard, of course, we are evaluating the new expansion on a global basis. And certainly, in the U.S., the discussions that have been proceeding related to chips and the FABS Act, which are about upfront support for investments, new manufacturing capacity as well as ongoing investment tax credits, these are important aspects to help the U.S. bridge the gap with Asia operations.
And these are the things that we will, of course, continue to monitor. And we will be making our decisions regarding future expansions once again that is more about the second half of this decade because until then, we are well positioned with our cleanroom situation in our diversified footprint in various countries, including the U.S. today. And in this regard, we are very much engaged with the U.S. government related to passage of CHIPS and investment tax credits.
Operator
Our next question comes from Mehdi Housseini of SIG
Mehdi Hosseini
One follow-up for Sanjay. How should I think about DDR5 contribution, especially to the operating profit this year, which -- it seems to me mostly driven by the PC end market versus next year where the server application picks up.
Sanjay Mehrotra
So I think we mentioned in our prepared remarks that DDR5, of course, it is a bigger die because of the specs of DDR5. By the way, that has an effect in terms of moderating the supply bit growth in the industry as well as DDR5 continues to ramp in client and, in the future, in the data center space as well.
So DDR5, we noted in our remarks, that has a pricing premium in the industry as well. And Micron actually is leading in terms of DDR5 supply capability in the industry today as well. So it is a positive contribution to our overall DRAM margins with DDR5. And certainly, we are getting pricing premium for DDR5 in the industry. And as new processors get deployed widely in the data center space that can make use of DDR5, which are expected to begin later this year, you will see DDR5 continuing to ramp rapidly during calendar year '23 as well. We are well positioned with our DDR5 road map for client as well as for data center market.
Mehdi Hosseini
But there will be a pricing premium for server application versus desktop, correct?
Sanjay Mehrotra
DDR5, as we noted, has pricing premium, yes.
Operator
Our next question comes from Chris Danely of Citi.
Chris Danely
So just specifically to DRAM, can you just talk about how the 3 main end markets did relative to your expectations? And then on the guidance, how they did -- or how they're -- you expect them to do relative to the expectations as far as PC, server, data center and mobile?
Sumit Sadana
All right. So Chris, yes, I can take that. So in terms of our end markets, FQ2 was a really good quarter. When we think about PCs, PCs performed well. Mobile performed well. Data center continues to be strong. And in fact, a lot of the gross margin upside that we experienced in FQ2 came from pricing improvements that were driven out of actually both DRAM and NAND, but definitely in DRAM as well versus our expectations. So those markets have been strong in FQ2.
And as we look ahead in FQ3, most of our sequential growth in FQ3 is being driven out of the compute market, which is mostly DRAM; and then the storage market, which is mostly NAND. So our Storage Business Unit and our Compute and Networking Business Unit, these 2 business units are going to be the primary drivers of growth. All 4 business units are likely to grow well, but these 2 are going to be exceptional growth drivers sequentially in FQ3.
So we do expect continued strength in PC. As Sanjay mentioned, the average capacities are increasing because of the mix improvements in PCs due to the shift towards corporate PCs and laptops away from lower-end consumer. So that's helping there. Data center continues to be robust. We expect the rest of calendar '22 to be robust for data center because a lot of demand growth there at our customers who are allocating significant CapEx increase. And the mobile 5G shift continues to be positive for average capacities. And even though mobile is not going to be a big driver of growth sequentially in FQ3, we do expect it to pick up sequentially in FQ4 because of seasonality and these continued trends.
Operator
Our next question comes from Joe Moore of Morgan Stanley.
Joe Moore
You touched on the impact of the contamination issue in NAND at your competitor. Can you talk about how much of a change that was, how tight you think the NAND market may be because of that? And do you expect that -- the impact of that to be durable beyond the current period?
Sanjay Mehrotra
It certainly brought down the year-over-year supply growth for the industry. It had brought it down based on some of the estimates that are out there by a couple of percentage points in terms of, again, the year-over-year industry supply growth. And certainly, that's -- in terms of the demand-supply dynamic in the industry, that's favorable because the demand for all the reasons that we have just discussed, whether it's in data center or in the client applications or on the mobile phones or even in the automotive markets, the demand for NAND along with demand for DRAM continues to increase. And we fully expect a healthy demand-supply balance for the NAND industry as we look ahead.
Operator
Our next question comes from Toshiya Hari of Goldman Sachs.
Toshiya Hari
I had a question on NAND ASPs and how to think about the evolution going forward. I think in the February quarter, your ASPs were up mid-single digits sequentially despite the industry environment still being relatively soft from a pricing perspective. Sanjay, just given your comments around your success in data center SSDs and winning some of those important designs, is it fair to assume that your sequential ASP expansion going forward should outperform the industry throughout the year? Is that a fair assumption to be making?
And then separately, Sumit, you talked about the headwinds associated with inflationary pressures and the supply chain mitigation actions. I think you said 100 basis points. At what point could that reverse? I know that's a hard question to answer, but should we expect those headwinds to persist for a couple of quarters? Or could those headwinds turn into tailwinds eventually?
Sanjay Mehrotra
Sumit, why don't you go ahead?
Sumit Sadana
Yes. In terms of our cost pressures, certainly, if you look at the overall environment out there, things are continuing to be challenging. And this is an industry-wide statement. So whether you look at the price of oil and natural gas that are important commodities that impact even the price of electricity, to a lot of the other raw materials and commodities that we purchase, noble gases, a lot of these things, even the pricing of OSAT external subcon services. And of course, you're seeing inflation and even foundry logic prices.
So there are lots of vectors. And then, of course, we are also seeing wage inflation happening. So there are lots of vectors through which inflation is getting transmitted into the business. And of course, we are, I believe, doing a really extraordinary job of containing our costs. But of course, these inflationary pressures are there. So we are planning for these pressures to persist for several quarters. We are not thinking that these will let up anytime soon. And so our work is focused on continuing to find efficiencies, continuing to ramp our new technology as fast as we have been doing in an excellent way.
So the rest of it comes from, of course, considering these costs as we think about how we price our products, and of course, driving stronger mix of products so we can get not only good ASPs, but also have positive gross margin benefit of products that have higher ASP, better high-value mix in our portfolio. And that mix improvement is happening on the NAND side. It's also happening on the DRAM side with examples like DDR5.
So with that, I'll turn it over to Sanjay.
Sanjay Mehrotra
So I think Sumit touched on the next aspect, which was the first part of your question. And as I think Sumit had highlighted in his prepared remarks that for NAND, even though there was a like-for-like price decline, our -- overall due to the mix, our pricing went up in FQ2. And again, this is just highlighting that how mix is playing an important role. The new products that we are launching with SSDs as well as our mobile-managed NAND solutions and shifting away from components into greater and greater mix of high-value solutions positions us well for continuing to improve the profitability of the business here.
Operator
Our next question comes from Ambrish Srivastava of BMO.
Ambrish Srivastava
Sumit, I'm a bit confused. I just wanted to make sure I understood the headwind that -- in the prior question. I thought the cost headwind, the 100 bps you called out, that was from the variable comp and had nothing to do with all the mitigation costs that are going on, which should continue for the next several quarters. Is that the case, the 100 bps is mainly --
Sumit Sadana
Yes. Yes, that is -- your understanding is correct. Yes, your understanding is correct. The 100 basis points impact to sequential gross margin in FQ3 versus FQ2 stemmed from the variable comp increase that I mentioned that's going to impact FQ3 as well as the NAND revenue mix that is going to increase in FQ3 and caused an impact to the consolidated gross margin just mathematically. So the sum of the 2 is over 100 basis points and --
Sanjay Mehrotra
On the gross margin.
Sumit Sadana
On the gross margin side, that's right.
Ambrish Srivastava
Got it. Got it. So then the question is then -- I'm just trying to unpack this because you talked about inflationary costs. We all understand that. We're feeling it in our own homes. But as you look at the business, you also said that some of the component availability is improving, and that has been a headwind as well to the back-end costs. So I'm just trying to unpack these comments. So on the one hand, you have -- and then you're also having to secure raw materials. I'm assuming neon is part of that. So can you just help us understand kind of what's the right way to think about these costs that could sustain for the next several quarters? So that was my first question.
The second one is, thanks for providing that commentary on the inventory. That was very helpful. We had to wait for the Q. The finished goods being down quarter-over-quarter for both DRAM and NAND. That was very helpful. The question is, is that seasonal? Or is there something going on that finished goods system?
Sumit Sadana
Sure. So in terms of the first question about costs, yes, we do expect that the availability of components is going to improve the overall shortages that we have been experiencing quite significantly over the last several quarters. The situation is improving. And as Sanjay said in the prepared remarks, it's not improving to an extent that all of those issues will be gone this year. We expect continuous improvement through the course of calendar '22.
And we expect that because of those improvements in availability, the full demand will be experienced in terms of memory and storage because our customers can now order match sets of products. They can get their hands on all of the components that are short. We can get our hands on more components to build our products. And so that is improving through the calendar year, but there is going to be some components that will shift into -- in calendar '23 in terms of when we expect further improvement. There will be still some shortages.
And even though the availability of some of these components is improving, there is a level of cost pressure across the supply chain. And these cost pressures are coming across a range of commodities that we buy, a range of input costs in the way we operate our fabs in back-end facilities. So it's an industry-wide pressure across a range of issues, and they will continue despite the improvements of availability of some components.
And now switching to your question about inventory. We have been managing our inventory tightly. So our finished goods inventory is down quarter-on-quarter by design. We have higher levels of WIP, mainly staging for a pretty robust growth in FQ3 sequentially. And you can see that in our guidance. We are growing very robustly in FQ3 compared to FQ2. So we do expect inventory to come down in FQ3 and to end up in pretty much the normal range that we have for the year at the end of FQ4.
So we do still have that expectation that we would -- as we had mentioned last quarter as well, we would build inventory ending FQ2 and then reduce inventory in FQ3, FQ4. So that is continuing to be the plan, and that's the set of numbers that you see.
Just one last point I last point is part of the inventory increase is to just ensure supply continuity, right? I mean this has been a challenge in terms of getting our hands on all the components we need. So part of it is just ensuring that we have adequate supply on hand to meet our customer demand as we ramp revenue.
Ambrish Srivastava
And so WIP has been going up consistently in the last 2, 3 quarters as a result of that rate?
Sumit Sadana
Yes. Exactly.
Operator
Ladies and gentlemen, this does conclude today's conference call. Thank you for participating. You may disconnect.
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