Micron Technology (MU) Deutsche Bank's 2024 Technology Conference summary

Market and demand trends

• Data center demand remains robust, driven by AI, with strong growth in both traditional and AI servers.

• Smartphone and PC markets are stable, with customers building inventory due to rising prices, supply tightness, and increasing AI content.

• Consumer, industrial, and automotive markets are currently weaker, but long-term trends remain positive for content growth.

• Bit shipments are expected to be flat to slightly up in FQ1 versus FQ4, with sequentially strengthening gross margins.

• AI and tight supply are expected to continue into 2025, supporting substantial revenue and robust profitability.

HBM and technology leadership

• HBM market is projected to grow from $4B in 2023 to over $25B in 2025, with HBM bit consumption rising from 1.5% to 6%.

• HBM has a three-to-one wafer trade ratio, tightening supply and positively impacting pricing for non-HBM products.

• HBM capacity is sold out for 2024 and 2025, with revenue expected to reach multiple billions in 2025.

• HBM3E product offers a 30% power advantage, leveraging advanced 1-beta DRAM technology and proprietary packaging and testing capabilities.

• Customization opportunities with HBM4E are being developed, enabling integration of customer logic for enhanced performance and efficiency.

Business strategy and profitability

• Focus on aligning HBM market share with overall DRAM share by 2025, while maintaining bit share across DRAM and NAND.

• Managing business mix toward higher profit pools, especially through HBM and AI-driven products.

• HBM and AI are accretive to gross margins, with tight supply and healthy pricing expected to boost profitability in 2025.

• Yield improvements and disciplined CapEx management are expected to further enhance margins.

• CapEx in 2025 will increase, mainly for construction and HBM assembly, preparing for future capacity needs and high-value product mix.