Micron Technology Earnings Call Insights: Gaming Demand Opportunities and NAND vs. DRAM

Micron Technology (NASDAQ:MU) recently reported its third quarter earnings and discussed the following topics in its earnings conference call.

Gaming Demand Opportunities

Glen Yeung – Citi: Just a question about the opportunities, demand opportunities from gaming. We’ve seen those game consoles go from quite a low amount of DRAM to quite a high number now. To what extent do you think this is a meaningful demand driver for DRAM in the next few quarters?

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Mark W. Adams – President: Glen, this is Mark Adams. I think it’s all pretty positive for us. When we look at the gaming sector and compare it to other segments, it’s still a pretty positive segment for us. Looking at the densities, kind of on average about 8 gigabytes, it’s all pretty favorable and of course going to the holiday season, we’re pretty excited.

Glen Yeung – Citi: Can I ask another question about cost then. Just thinking about Inotera, I recognize Inotera costs are below yours and you know over time it’s a bit of a drag on the net cost down of the two companies. But is there a point at which the cost come together and at that point we then kind of revert back to more normal cost declines in DRAM?

D. Mark Durcan – CEO, Director: Glenn, this is Mark Durcan. It’s not likely to happen in the short-term and that’s primarily because there is a pretty significant difference in the mix that runs in Inotera today versus the mix that runs in other places. So, you look at Micron DRAM today, it’s – there is a lot of networking, server, consumer gaming products that aren’t necessarily sound Inotera that typically drive pretty good ASP, but also maybe not advancing to the leading edge not as quickly. So, we’re not particularly concerned that the cost profiles don’t marry up. The other thing to keep in mind obviously is that going forward, Inotera costs, to Micron are going to track with the end markets and those are going to move over time. As we bring Elpida into the fold, we will have wholly-owned DRAM capacity that will be much more leading edge and cost efficient to service some of those more high volume markets.

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