Micron Earnings Review

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a. Micron 101

Micron sells semiconductors for memory and storage. Its “Not And” (NAND) chips offer non-volatile data storage, which maintains stored information when a system’s power is turned off. Separately, its Dynamic Random Access Memory (DRAM) chips offer volatile memory storage for personal computers, data centers, and mobile devices. “Volatile” means that storage isn’t maintained when a system’s power is turned off. DRAM helps processors access real-time data to minimize processing latency. These chips are considered to be commoditized at this point, with Micron’s cost advantages providing its edge.

• DRAM is great for short-term memory storage and rapid access.
• NAND is great for longer-term memory storage and use cases that don’t need the lowest data processing latency.

These chips provide the foundation for its solid-state drives (SSDs), which are used in computer data storage and things like USB flash drives. Micron sells standalone NAND chips as well as SSDs with NAND chips in them. SSDs replace hard disk drives (HDDs), as they’re more power efficient, durable and resilient. It provides basic memory cards for things like gaming devices and cameras as well.

Perhaps most interestingly, Micron offers a type of DRAM called high-bandwidth memory (HBM) to meet the massive data needs of GenAI. It sharply improves data processing capabilities and facilitates improved data sharing between CPUs & GPUs. Nvidia is a big customer, using Micron’s HBM in its Blackwell and future Vera Rubin systems. It also offers high-capacity SSDs to help with LLM storage.

Finally, it's worth noting that Micron's business model has been very cyclical from inception. Their end markets experience sharp demand peaks and valleys, and their revenue and margins aggressively fluctuate as those processes play out. Micron is at the center of the high-bandwidth memory boom, tied to the current AI revolution. They're experiencing the largest and most powerful cycle yet, and are a direct beneficiary.