Micron Technology Earnings Call Insights: Industry Bit Growth, Personal Systems Mix
Industry Bit Growth
James Schneider – Goldman Sachs: I guess first of all on the NAND side I think you referred to some industry bit growth estimates for 2013 in the low 50% range. I was wondering, based on what you see today do you think we are going to end up for the industry on the high or low end side of that and where do you expect Micron to come in, in terms of that industry bit growth, higher or lower?
Catalysts are critical to discovering winning stocks. Check out our newest CHEAT SHEET stock picks now.
D. Mark Durcan – CEO, Director: I think the answer to your question is probably both on the low end, both the industry and Micron.
James Schneider – Goldman Sachs: Then could you maybe talk about in the Wireless Solutions Group, what are the steps you are going to take to start turning around the profitability in that segment? I think you obviously referred to improving gross margins in the NOR side of space but can you talk to maybe some other actions you might look to take either operationally or in terms of the product portfolio there?
D. Mark Durcan – CEO, Director: I think, it’s important to note that the business – our Wireless business has evolved from both the acquisition of Numonyx and kind of where this segment was and then, we had a pretty high heavily concentrated business in the feature phone market. We’ve been moving our product development efforts as well as product roadmaps towards the smartphone piece of the business and our advancement in terms of low-power DRAM will allow us to get more aligned with the broader demand cycles in the mobile phone markets. So, I think from a product perspective, we’re well aligned going forward. We also have been taking a look at our spending across NAND DRAM and NOR to make sure we’re focused on these future products and making some tough choices on some of the existing or historical legacy products that have not generated profit. So, between the expenditures side and some product alignment and of course, our new leadership, we feel pretty good about the business going forward.
James Schneider – Goldman Sachs: Last question from me would be, I think you gave a number in terms of the SSD sales for fiscal ’12. You care to make any kind of guess about what that number could be like on a year-over-year basis for 2013?
D. Mark Durcan – CEO, Director: You know us Dave, we try not to predict anything like that or forecast it, but nice try.
Personal Systems Mix
CJ Muse – Barclays Capital: I guess, first one on the DRAM side, can you talk about what you’re seeing there in terms of utilization rates particularly from the Tier 2 guys? Are you starting to see them ratchet back or they still lingering?
D. Mark Durcan – CEO, Director: Really, we just read the same stuff in the press that you guys do and it’s hard for us to comment beyond that sort of speculation.
CJ Muse – Barclays Capital: I guess thinking a little bit longer term, can you share with us what the mix was in PC, server, mobility, et cetera, in August and where you think that could move to 12 months from now, and how we should think about the implications to gross margins for that business?
Ronald C. Foster – CFO and VP of Finance: On a revenue basis, we were exposed to the personal systems by about 15%, and this is of total revenues. Had a pretty strong server business, low double digits, networking and storage mid-teens, mobile low double digits and then aim was around 10%.
CJ Muse – Barclays Capital: Care to talk about where you see that going 12 months from now?
D. Mark Durcan – CEO, Director: Can I just say, just going to repeat my answer from the last question. It’s really hard especially when talking revenues, you have to also predict not only your growth rate in bits, but also what the ASPs are going to be doing and that’s just a pretty difficult quarter.
CJ Muse – Barclays Capital: Then last question for me, on the NAND side, can you walk through the roadmap there in 20 nanometer when we should start to see you talked about I guess mid to high cost down each quarter, will that commence in calendar Q1, Q2, how should we think about that?
D. Mark Durcan – CEO, Director: Go ahead Mark.
Mark W. Adams – President: I think the answer is, we’re very focused on hitting more of the production crossover towards the end of the first half of 2013, so then you’ll see some cost flow through to our NAND costs, so today we’re shipping the product, but with respect to continue to increase volumes, that will allow us to realize cost savings.
Ronald C. Foster – CFO and VP of Finance: I can just refer you as well to your guidance sheet, you can see there for Q1 ’13 we’re suggesting down a percent in NAND and then a more aggressive cost down in the next few quarters after that.
A Closer Look: Micron Technology Earnings Cheat Sheet>>