Micron Technology, Inc. (MU) CEO Sanjay Mehrotra presents at JPMorgan 49th Annual Global Technology, Media and Communications Conference (Transcript)
2021.05.25
디램과 낸드 모두 강한 메모리 수요로 가격 상승이 예상되나, 낸드는 과잉 투자에 대해 조심스럽게 우려함.
Micron Technology, Inc. (MU) CEO Sanjay Mehrotra presents at JPMorgan 49th Annual Global Technology, Media and Communications Conference (Transcript)
May 25, 2021 3:04 PM ETMicron Technology, Inc. (MU)12 Comments
Micron Technology, Inc. (NASDAQ:MU) May 25, 2021 11:00 AM ET
Company Participants
Sanjay Mehrotra - Chief Executive Officer and President
Dave Zinsner - Senior Vice President and Chief Financial Officer
Conference Call Participants
Harlan Sur - JP Morgan
Harlan Sur
Greetings and thank you for attending JPMorgan's 49th Annual Technology Media and Communications Conference. My name is Harlan Sur; I'm the Semiconductor and Semiconductor Capital Equipment Analyst for the firm, very pleased to have Sanjay Mehrotra, Micron's President and Chief Executive Officer here with us today. We also have Dave Zinsner, Micron's Chief Financial Officer. I'll ask Sanjay to kick us off with the team's view of the current and second half demand and supply environment, Micron's performance within the memory and storage markets this year. And then we'll go ahead and launch into the Q&A. And so gentlemen, thank you for joining us today. And Sanjay let me go ahead and turn it over to you.
Sanjay Mehrotra
Thank you, Harlan. And thank you for having us here at the conference. And greetings to all our listeners. Before I start, let me just point out that during the course of the discussions here today, we will be making certain forward-looking statements. Please refer to SEC filings, which we make from time to time regarding the risk factors associated with the business. So, Harlan, I will start off giving some commentary on the current quarter as well as our outlook ahead for the rest of the year.
In terms of the current quarter at Q3, we still have 10 days to go before the quarter completes. But I will tell you that the demand environment is extremely strong.
회계년도 2021년3분기(3월-5월) 마감일이 10일정도 남았으나, 메모리 수요가 매우 강하다고 말할 수있다.
And at this point, how we see the quarter landing at the close is we expect our revenue to be at or above the previous guidance that we had provided. The high end of the previous guidance was $7.3 billion. So we expect our revenue to be at or above the high end of the range that we had provided before. And accordingly, gross margin percentages on a non-GAAP basis as well as EPS will be strong for the quarter as well.
이런 점에서 볼때 이번 분기 매출은 지난 우리의 예상치 상단 73억달러를 뛰어 넘을 것이고, 주당순이익과
매출총이익도 강할 것이다.(the prior $6.9-7.3B forecast)
Demand has been strong across all end markets virtually. And the pricing trends have been strong for both DRAM and NAND. As we had discussed before, with respect to cost on the DRAM side, given the drought mitigation costs, as well as some Taiwan dollar foreign exchange impact, we had indicated that sequential costs on the DRAM side would be higher during FQ3 versus FQ2. Of course our 176-layer NAND and 1-alpha DRAM continue to make solid progress, or 1-alpha DRAM will have an impact as we said before in fiscal '22. But it's continuing to ramp up nicely and proceeding well in terms of customer qualifications as well. But its impact in terms of supply growth as well as in terms of cost reduction capability will really come in fiscal year '22.
메모리 수요는 모든 시장에서 강하다. 가격 동향도 디램과 낸드 모두 강하다.
이전에 토론한대로 디램 부문에서 상승이 예상되는데, 미세공전 전환으로 인한 원가 절감 효과 부족과
대만 달러의 영향등으로 디램 부문의 원가가 전분기에 이어 상승할 것으로 예상한다.
물론 174단 낸드와 1a 디램으로의 전환은 지속될 것이고 2022년회계년도(2021녀9월부터) 이전에 영향을 줄것이다.
So we expect for FQ4 our DRAM bit in terms of shipments would be relatively flat with respect to FQ3.
And our inventory is lean, I mean, in DRAM we have supply shortages, inventories running extremely lean.
And of course with that lean inventory in mind and looking at the timing of our 1-alpha DRAM production ramp that's where I'm providing you some color related to our FQ4.
회계년도 4분기(6월-8월) 디램 비트(출하량 )는 3분기와 비슷할 것.
회사의 디램은 공급 부족 상태로 재고는 적고, 감소하고 있다.
DRAM bit shipment expectation as well, but we are very pleased with Micron solid execution across DRAM, across NAND, across our product portfolio with respect to getting products ready with these new technologies.
Also, with respect to demand, demand as I said is strong from all end markets supply particularly for DRAM is tight and we see that supply tightness will continue for DRAM through calendar year '21 and into calendar year '22.
디램 공급 부족은 회계년도 2021년 전체와 회계년도 2022년(9월-23년8월)까지 지속될 것.
NAND environment as we had indicated before is stabilizing. In fact, NAND environment is improving. It will be -- in FQ3, the upside overall in terms of the revenue trend versus our prior guidance that we said is driven by ASPs both in the DRAM side as well as NAND side being better than the ASPs we had baked into the guidance that we had provided earlier. And NAND of course, as we have always said as price elasticity and those price elasticity trends are kicking in, in terms of average capacities continuing to grow strong as well as overall demand continuing to improve.
However, we remain cautious with respect to NAND in terms of industry CapEx spend while NAND is improving.
As you know, we have remained cautious in terms of how we invest in CapEx on the NAND industry, I believe that CapEx spend will remain -- we need to industry as a whole needs to remain cautious in terms of making sure that there's healthy demand and supply balance going forward.
낸드 시장은 안정화되고 있고(그동안 낸드는 공급 과잉 상태였으나 2분기부터 낸드 가격 상승 시작)
점점 좋아지고 있다. 하지만 우리가 얼마나 많이 낸드에 투자할 것인가에 대해 조심스럽다.
And I'll also tell you that overall, the non memory component shortages that our customers are experiencing, that is actually resulting in even more unmatched demand. If these known memory component shortages were not there in the industry, we believe that our demand would be even higher.
So we are excited about the possibilities the growth trends are secular in nature, AI and 5G driving growth in cloud smartphones. And of course, PC demand is strong as well, automotive is strong, so across all from data center, all the way to consumer devices and everything in between, we are seeing overall healthy demand trends, and we are excited about Micron's execution and the opportunities ahead.
And I will also point out that of course, we remain concerned about the COVID spread in India. And we have a large team presence there. And we, our team members, safety and well being are top of our mind. And we remain really; our thoughts and prayers are with those in India. And we are concerned of course with the recent spread of COVID in other Asian countries as well, including Taiwan, Singapore and Malaysia. But I'll tell you that Micron was early in taking steps during the start of COVID last year, and we were among the very first to implement best-in-class safety protocols on site. And we have remained extremely disciplined in this regard throughout the period. So we will continue to adhere to the protocols, we will continue to follow, of course, any government regulations regarding managing how many people can do on site, et cetera. But I'll tell you in the near term, we are not seeing the impact of the COVID situation and increase in COVID cases in certain parts of Asia, including Malaysia.
And we certainly hope that as vaccination improves across the globe, these situations will further improve as well. And our supply chain team remains very mindful continuing to monitor the situation and respond fast to any changing dynamics and the resiliency of our supply chain, I think has proven successfully over the course of last year. And I believe it will play out to be our strength going forward as well.
Question-and-Answer Session
Operator
[Operator Instructions]
HarlanSur
And so that Sanjay, so just to reiterate, so revenues at or above the high end of the guidance range, gross margin EPS strong, do you want to try to quantify that relative to the prior gross margin guidance range that you that the team have provided?
SanjayMehrotra
So Harlan, we are not updating the gross margin guidance here because 10 days are still left in the quarter. But again, the way we see the quarter shaping up is we see revenue at or above the high end of the range that we provided earlier in March for the quarter. And accordingly, obviously, given the pricing trends that we have seen in DRAM and NAND, we expect EPS and gross margins to be strong as well.
HarlanSur
It sounds like even on the cost side, you guys were executed quite well. I mean, you said you had anticipated costs to potentially be up in DRAM due to the drought mitigation efforts, FX and some other things and it sounds like that's how it played out. On the NAND side, you guys were anticipating to execute to some pretty good cost reductions down low double digits kind of year-over-year declines. Roughly speaking, did the team kind of execute to that here going to make quarter?
SanjayMehrotra
Yes, that's right. I mean, we are executing to our plan, as I mentioned earlier, in NAND as well as DRAM with respect to our 1-alpha node as well as with 176-layer NAND, our expectations, our execution is in line with what we have shared before. Hey, Dave, feel free to add in any comments at any time we have Dave Zinsner here.
DaveZinsner
You handle it. Yes. Thanks.
HarlanSur
So in DRAM, it sounds like given the continued tightness. Lead times are a bit better, you're getting a bit better visibility, and you talked about continued tightness into the second half of this year and even into next year. Number one is what are the second half demand drivers that you see for the Micron team in your DRAM business. And this has been a concern by investors but what gives you the confidence on continued tightness and relatively strong DRAM fundamentals into 2022.
SanjayMehrotra
Yes. So let's just break it up by end market. Let's look at data center. And within data center, let's look at cloud as well as enterprise. So within cloud, FQ4 of last year was strong quarter, it was as healthy 14b quarter as well. And then we have seen then overall, since then the cloud demand has continued to be healthy. Of course, there has been some digestion over the course of last couple of quarters with respect to demand and requirements from the cloud customers. But their digestion by and large is over. And what we see is that cloud, a demand in the second half of the year will continue to be strong as well. Overall, cloud is being driven by the secular trend of AI and new server applications, new CPUs that are driving more cores, more channels, greater DRAM attach, as well as AI driven workloads are really requiring more DRAM content as well. So cloud, even with digestion that occurred in the cloud industry, over the last couple of quarters has been healthy overall, for the industry.
And certainly for Micron, particularly Micron with our high quality products, we have done well with our cloud customers. And as we look ahead, we see for industry in terms of DRAM demand, cloud will continue to be strong, and second half of the calendar year will be stronger than the first half of the calendar year for cloud. And again, we believe it's a secular demand trend in cloud and we are still overall enjoying a growing demand for DRAM, given the workloads that cloud is driving that are requiring more than more memory, as well as more and more storage as well.
On the enterprise side, which throughout COVID has generally been weak, we are starting to see that enterprise is starting to recover as well. And he expect that as the vaccinations happen around the world, and as global economies recover from the lockdowns and open up, we expect that enterprises, the business will start coming back as well. So we see strength starting to build up on the enterprise side of the data center demand as well and the considerations in terms of applications with more cores, more channels, and servers, enabling more memory, DRAM memory attached rates are the same.