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Micron Technology

Micron TechnologyMU決算レポート

Nasdaq · Information Technology · Semiconductors

Micron Technology, Inc. is an American producer of computer memory and computer data storage including dynamic random-access memory, flash memory, and solid-state drives (SSDs). It is headquartered in Boise, Idaho.

What changed in Micron Technology's 10-K — 2023 vs 2024

Top changes in Micron Technology's 2024 10-K

381 paragraphs added · 350 removed · 273 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

77 edited+45 added−35 removed59 unchanged
Advancements in autonomous driving, advanced driver-assistance systems, and in-vehicle infotainment systems continue to increase the requirements for high-performing memory and storage products, with higher reliability requirements for leading-edge products. Automotive memory and storage products enable connected, advanced infotainment systems with increasingly larger and higher definition displays and support improved voice and gesture control.
Automotive : Advancements in autonomous driving, advanced driver-assistance systems, and in-vehicle infotainment systems continue to increase the requirements for high-performing memory and storage products, with higher reliability requirements for leading-edge products. Automotive memory and storage products enable connected, advanced infotainment systems with increasingly larger and higher definition displays and support improved voice and gesture control.
Other factors include the cost and sophistication of manufacturing equipment, equipment utilization, cost of raw materials, labor productivity, package type, cleanliness of our manufacturing environment, and utilization of subcontractors to perform certain manufacturing processes.
Other factors include the cost and sophistication of manufacturing equipment, equipment utilization, cost of raw materials, labor productivity and cost, package type, cleanliness of our manufacturing environment, and utilization of subcontractors to perform certain manufacturing processes.
Mr. Allen was named Corporate Vice President and Chief Accounting Officer in October 2020. From August 2016 to September 2020, Mr. Allen held several executive roles at NetApp, Inc. including Senior Vice President, Chief Accounting Officer. Mr. Allen holds a Bachelor of Business Administration in Accounting from Siena College. April S. Arnzen Senior Vice President and Chief People Officer Ms.
Mr. Allen was named Corporate Vice President and Chief Accounting Officer in October 2020. From August 2016 to September 2020, Mr. Allen held several executive roles at NetApp, Inc. including Senior Vice President, Chief Accounting Officer. Mr. Allen holds a Bachelor of Business Administration in Accounting from Siena College. April S. Arnzen Executive Vice President and Chief People Officer Ms.
Centers of excellence bring expertise together in one location, providing an efficient support structure for end-to-end manufacturing, with quicker cycle times, in partnership with teams such as research and development (“R&D”), product engineering, human resources, procurement, and supply chain. For our locations in Singapore and Taiwan, this is also a combination of bringing fabrication and back-end manufacturing together.
Centers of excellence bring expertise together in one location, providing an efficient support structure for end-to-end manufacturing, with quicker cycle times, in partnership with teams such as research and development (“R&D”), product development, human resources, procurement, and supply chain. For our locations in Singapore and Taiwan, this is also a combination of bringing fabrication and back-end manufacturing together.
As we continue to increase our production of high value products and solutions, manufacturing costs are increasingly affected by the costs of application-specific integrated circuit (“ASIC”) controllers and other semiconductors, advanced and complex packaging configurations, and testing at progressively higher performance speeds and quality levels.
As we continue to increase our production of high value products and solutions, manufacturing costs are increasingly affected by the costs of application-specific integrated circuit controllers and other semiconductors, advanced and complex packaging configurations, and testing at progressively higher performance speeds and quality levels.
Compliance with the law and other obligations is a minimum environmental expectation at Micron. Our wafer fabrication facilities continued to conform to the requirements of the ISO 14001:2015 environmental management systems standard to ensure we are continuously improving our performance.
Compliance with the law and other obligations is a minimum environmental expectation at Micron. Our wafer fabrication facilities conform to the requirements of the ISO 14001:2015 environmental management systems standard to ensure we are continuously improving our performance.
Our DRAM, NAND, and NOR products share a number of common manufacturing processes, enabling us to leverage our product and process technology and certain resources and manufacturing infrastructure across these product lines. 11 | 2023 10-K Table of Contents Our process for manufacturing semiconductor products is complex and involves numerous precise steps, including wafer fabrication, post fabrication processing, assembly, and test.
Our DRAM, NAND, and NOR products share a number of common manufacturing processes, enabling us to leverage our product and process technology and certain resources and manufacturing infrastructure across these product lines. 11 | 2024 10-K Table of Contents Our process for manufacturing semiconductor products is complex and involves numerous precise steps, including wafer fabrication, post fabrication processing, assembly, and test.
There are no family relationships between any of our directors or executive officers. 19 | 2023 10-K Table of Contents Available Information Our executive offices are located at 8000 South Federal Way, Boise, Idaho 83716-9632 and our telephone number is (208) 368-4000. Information about us is available on our website, www.micron.com.
There are no family relationships between any of our directors or executive officers. 19 | 2024 10-K Table of Contents Available Information Our executive offices are located at 8000 South Federal Way, Boise, Idaho 83716-9632 and our telephone number is (208) 368-4000. Information about us is available on our website, www.micron.com.
Bhatia holds a BS and MS in Mechanical Engineering and an MBA, each from the Massachusetts Institute of Technology. Michael W. Bokan Senior Vice President, Worldwide Sales Mr. Bokan, 62, joined us in 1996 and has served in various leadership positions since that time. Mr. Bokan was named Senior Vice President, Worldwide Sales in October 2018. Mr.
Bhatia holds a BS and MS in Mechanical Engineering and an MBA, each from the Massachusetts Institute of Technology. Michael W. Bokan Senior Vice President, Worldwide Sales Mr. Bokan, 63, joined us in 1996 and has served in various leadership positions since that time. Mr. Bokan was named Senior Vice President, Worldwide Sales in October 2018. Mr.
In addition, if any of our suppliers was to cease operations or become insolvent, this could impact their ability to provide us with necessary supplies, and we may not be able to obtain the needed supply in a timely way or at all from other providers.
In addition, if any of our suppliers were to cease operations or become insolvent, this could impact their ability to provide us with necessary supplies, and we may not be able to obtain the needed supply in a timely way or at all from other providers.
We strive to adhere to both our Code of Business Conduct and Ethics (available on our website, www.micron.com) and the RBA code of conduct, which is a demonstration of our commitment to integrity and responsible practices. Additional information about our human capital is included in our 2023 Sustainability Report and our 2022 DEI Annual Report, each available on our website.
We strive to adhere to both our Code of Business Conduct and Ethics (available on our website, www.micron.com) and the RBA code of conduct, which is a demonstration of our commitment to integrity and responsible practices. Additional information about our human capital is included in our 2024 Sustainability Report and our 2023 DEI Annual Report, each available on our website.
Mehrotra holds a BS and an MS in Electrical Engineering and Computer Science from the University of California, Berkeley and is a graduate of the Stanford Graduate School of Business Executive Program. Mark J. Murphy Executive Vice President and Chief Financial Officer Mr. Murphy, 55, joined us in April 2022 as Executive Vice President and Chief Financial Officer.
Mehrotra holds a BS and an MS in Electrical Engineering and Computer Science from the University of California, Berkeley and is a graduate of the Stanford Graduate School of Business Executive Program. Mark J. Murphy Executive Vice President and Chief Financial Officer Mr. Murphy, 56, joined us in April 2022 as Executive Vice President and Chief Financial Officer.
Arnzen holds a BS in Human Resource Management and Marketing from the University of Idaho and is a graduate of the Stanford Graduate School of Business Executive Program. Manish Bhatia Executive Vice President, Global Operations Mr. Bhatia, 51, joined us in October 2017 as our Executive Vice President, Global Operations. From May 2016 to October 2017, Mr.
Arnzen holds a BS in Human Resource Management and Marketing from the University of Idaho and is a graduate of the Stanford Graduate School of Business Executive Program. Manish Bhatia Executive Vice President, Global Operations Mr. Bhatia, 52, joined us in October 2017 as our Executive Vice President, Global Operations. From May 2016 to October 2017, Mr.
Inflationary pressures have increased, and may continue to increase costs for materials, supplies, and services. Regardless of contract structure, large swings in demand may exceed our contracted supply and/or our suppliers’ capacity to meet those demand changes resulting in a shortage of parts, materials, or capacity needed to manufacture our products.
Inflationary pressures may continue to increase costs for materials, supplies, and services. Regardless of contract structure, large swings in demand may exceed our contracted supply and/or our suppliers’ capacity to meet those demand changes resulting in a shortage of parts, materials, or capacity needed to manufacture our products.
Bokan holds a BS in Business Administration from Colorado State University. Scott J. DeBoer Executive Vice President, Technology & Products Dr. DeBoer, 57, joined us in February 1995 and has served in various leadership positions since that time. Dr.
Bokan holds a BS in Business Administration from Colorado State University. Scott J. DeBoer Executive Vice President, Technology & Products Dr. DeBoer, 58, joined us in February 1995 and has served in various leadership positions since that time. Dr.
In addition, the May 21, 2023 decision by China’s Cyberspace Administration (the “CAC”) that critical information infrastructure operators in China may not purchase Micron products had an impact on our ability to compete effectively in China and elsewhere.
In addition, the May 2023 decision by China’s Cyberspace Administration (the “CAC”) that critical information infrastructure operators in China may not purchase Micron products had an adverse impact on our ability to compete effectively in China and elsewhere.
Information contained or referenced on our website is not incorporated by reference and does not form a part of this Annual Report on Form 10-K. Government Regulations Our worldwide business activities are subject to various federal, state, local, and foreign laws and our products are governed by a number of rules and regulations and customer expectations.
Information contained or referenced on our website is not incorporated by reference and does not form a part of this Annual Report on Form 10-K. 16 Table of Contents Government Regulations Our worldwide business activities are subject to various federal, state, local, and foreign laws and our products are governed by a number of rules and regulations and customer expectations.
We face intense competition in the semiconductor memory and storage markets and to remain competitive we must continuously develop and implement new products and technologies and decrease manufacturing costs in spite of ongoing inflationary cost pressures.
We face intense competition in the semiconductor memory and storage markets. To remain competitive we must continuously develop and implement new products and technologies and decrease manufacturing costs in spite of inflationary pressures.
Every day, the innovations that our people create fuel the data economy, enabling advances in artificial intelligence and 5G applications that unleash opportunities — from the data center to the intelligent edge and across the client and mobile user experience. We manufacture our products at wholly-owned facilities and also utilize subcontractors for certain manufacturing processes.
Every day, the innovations that our people create fuel the data economy, enabling advances in artificial intelligence (AI) and compute-intensive applications that unleash opportunities — from the data center to the intelligent edge and across the client and mobile user experience. We manufacture our products at wholly-owned facilities and also utilize subcontractors for certain manufacturing processes.
Our system-level solutions, including SSDs and managed NAND, combine NAND, a controller, firmware, and in some cases DRAM. DRAM : DRAM products are dynamic random access memory semiconductor devices with low latency that provide high-speed data retrieval with a variety of performance characteristics.
Many of our system-level solutions combine NAND, a controller, firmware, and in some cases DRAM. DRAM: DRAM products are dynamic random access memory semiconductor devices with low latency that provide high-speed data retrieval with a variety of performance characteristics.
Sales, Markets, and Products Product Technologies Our product portfolio of memory and storage solutions, advanced solutions, and storage platforms is based on our high-performance semiconductor memory and storage technologies, including DRAM, NAND, and NOR. We sell our products into various markets through our business units in numerous forms, including components, modules, SSDs, managed NAND, MCPs, and wafers.
Products, Market, and Sales Product Technologies Our product portfolio of memory and storage solutions, advanced solutions, and storage platforms is based on our high-performance semiconductor memory and storage technologies, including DRAM, NAND, and NOR. We sell our products through our business units into various markets in numerous forms, including: components, modules, SSDs, managed NAND, multi-chip packages, and wafers.
Arnzen, 52, joined us in December 1996 and has served in various leadership positions since that time. Ms. Arnzen was named Senior Vice President, Human Resources in June 2017 and named Senior Vice President and Chief People Officer in October 2020. Ms.
Arnzen, 53, joined us in December 1996 and has served in various leadership positions since that time. Ms. Arnzen was named Senior Vice President, Human Resources in June 2017, named Chief People Officer in October 2020, and named Executive Vice President in October 2023. Ms.
Mehrotra, 65, joined us in May 2017 as our President, Chief Executive Officer, and Director. Mr.
Mehrotra, 66, joined us in May 2017 as our President, Chief Executive Officer, and Director. Mr.
All officers serve until their successors are duly chosen or elected and qualified, except in the case of earlier death, resignation, or removal. The following presents information, as of August 31, 2023, about our executive officers: Scott R. Allen Corporate Vice President and Chief Accounting Officer Mr. Allen, 55, joined us in September 2020 as Corporate Vice President of Accounting.
All officers serve until their successors are duly chosen or elected and qualified, except in the case of earlier death, resignation, or removal. The following presents information, as of August 29, 2024, about our executive officers: Scott R. Allen Corporate Vice President and Chief Accounting Officer Mr. Allen, 56, joined us in September 2020 as Corporate Vice President of Accounting.
Environmental Compliance Manufacturing of our products is subject to complex and evolving federal, state, local, and foreign environmental, health, safety and product laws and regulations and expectations.
Environmental Compliance Manufacturing and sales of our products are subject to complex and evolving federal, state, local, and foreign environmental, health, safety and product laws and regulations and expectations.
Risk Factors – Risks Related to Laws and Regulations – Government actions and regulations, such as export restrictions, tariffs and trade protection measures, may limit our ability to sell our products to certain customers or markets, or could otherwise restrict our ability to conduct operations” and “ – Risks Related to Our Business, Operations, and Industry – We face geopolitical and other risks associated with our international operations that could materially adversely affect our business, results of operations, or financial condition.” We and/or our suppliers and service providers could be affected by tariffs, embargoes, or other trade restrictions, as well as laws and regulations enacted in response to concerns regarding climate change, conflict minerals, responsible sourcing practices, public health crises, or other matters, which could limit the supply of our materials and/or increase the cost.
Risk Factors – Risks Related to Laws and Regulations – Government actions and regulations, such as export restrictions, tariffs, and trade protection measures, may limit our ability to sell our products to certain customers or markets, or could otherwise restrict our ability to conduct operations” and “ – Risks Related to Our Business, Operations, and Industry – We face geopolitical and other risks associated with our international operations that could materially adversely affect our business, results of operations, or financial condition.” We and/or our suppliers and service providers could be affected by tariffs, embargoes, or other trade restrictions, as well as laws and regulations enacted in response to concerns regarding climate change, conflict minerals, responsible sourcing practices, public health crises, or other matters, which could limit the supply of our materials and/or increase the cost. 17 | 2024 10-K Table of Contents Information About Our Executive Officers Our executive officers are appointed annually by our Board of Directors and our directors are elected annually by our shareholders.
In addition, as of August 31, 2023, based on self-identification, one member of our Board of Directors is Asian, one member is African-American, and six members are White. One member of our Board of Directors is a veteran of the U.S. military.
In addition, as of August 29, 2024, based on self-identification, one member of our Board of Directors is Asian, one member is African-American, and seven members are White. One member of our Board of Directors is a veteran of the U.S. military.
Murphy currently serves on the Board of Directors of Albany International Corp. Mr. Murphy is a veteran of the U.S. Marine Corps and holds an MBA from Harvard University and BS in Business from Marquette University. Sumit Sadana Executive Vice President and Chief Business Officer Mr.
Murphy currently serves on the Board of Directors of Albany International Corp. Mr. Murphy is a veteran of the U.S. Marine Corps and holds an MBA from Harvard University and BS in Business from Marquette University. Michael Ray Senior Vice President, Chief Legal Officer and Corporate Secretary Mr.
Because of the lead times necessary to manufacture our products, we typically begin to process wafers before completion of performance and reliability testing. Development of a product is deemed complete when it is qualified through internal reviews and tests for performance, functionality, and reliability. R&D expenses can vary significantly depending on the timing of product qualification.
Because of the lead times necessary to manufacture our products, we typically begin to process wafers before completion of performance and reliability testing. Development of a product is deemed complete when it is qualified through internal reviews and tests for performance, functionality, and reliability.
The continued evolution of our semiconductor product offerings is necessary to meet expected customer requirements for memory and storage products and solutions. Our process, design, firmware, controller, package, and system development efforts occur at multiple locations across the world.
To compete in the semiconductor memory and storage markets, we must continue to develop technologically advanced products and processes. The continued evolution of our semiconductor product offerings is necessary to meet expected customer requirements for memory and storage products and solutions. Our process, design, firmware, controller, package, and system development efforts occur at multiple locations across the world.
Our five DEI commitments are summarized as follows: • Increase representation of underrepresented groups • Drive equitable pay and inclusive benefits • Champion advocacy and strengthen our culture of inclusion • Engage with diverse financial institutions for cash management • Increase diverse supplier representation and spending We have a regular review of pay globally, including base pay and stock awards, to drive compensation equitably.
Our five DEI commitments are summarized as follows: • increase hiring from nontraditional pathways and underrepresented groups; • drive equitable pay and inclusive benefits; • champion advocacy and strengthen our culture of inclusion; • engage with diverse financial institutions; and • increase diverse supplier representation and spending. 15 | 2024 10-K Table of Contents We have a regular review of pay globally, including base pay and stock awards, to drive compensation equitably.
Certain materials are primarily available in a limited number of countries, including rare earth elements, minerals, and metals. Trade disputes, geopolitical tensions, economic circumstances, political conditions, or public health issues may limit our ability to obtain such materials.
Certain materials are primarily available in a limited number of countries, including rare earth elements, minerals, and metals. Trade disputes, geopolitical tensions, economic circumstances, political conditions, or public health issues may limit our ability to obtain such materials. Although these rare earth and other materials are generally available from multiple suppliers, China is the predominant producer of these materials.
Marketing and Customers We seek to build collaborative relationships with our customers to understand their unique opportunities and challenges. By engaging with our customers early in the product life-cycle to identify and design features and performance characteristics into our products, we are able to manufacture products that anticipate and address our customers’ changing needs.
By engaging with our customers early in the product life-cycle to identify and design features and performance characteristics into our products, we are able to manufacture products that anticipate and address our customers’ changing needs.
Overall cloud growth continues to be driven by the shift of both infrastructure and workloads from on-premises to the cloud. Cloud-native workloads are drivers of growth through use-cases like intelligent edge devices capable of AI and augmented reality that store and access data in the cloud or rely on the cloud for compute capability.
Cloud-native workloads are drivers of growth through use-cases like intelligent edge devices capable of AI and augmented reality that store and access data in the cloud or rely on the cloud for compute capability.
These embedded memory and storage solutions are used in a diverse set of consumer products, including service provider and IP set-top boxes, digital home assistants, digital still and video cameras, home networking, ultra-high definition televisions, augmented reality and virtual reality (“AR/VR”) headsets, and many more applications.
The need for reliable and high-performance memory solutions in these applications is critical. 9 | 2024 10-K Table of Contents Consumer embedded : Embedded memory and storage solutions are used in a diverse set of consumer products, including service provider and IP set-top boxes, digital home assistants, digital still and video cameras, home networking, ultra-high-definition televisions, augmented reality and virtual reality headsets, and many more applications.
Although our product lines generally use similar manufacturing processes, our costs can be affected by frequent conversions to new products; the allocation of manufacturing capacity to more complex, smaller-volume products; and the reallocation of manufacturing capacity across various product lines.
Although our product lines generally use similar manufacturing processes, our costs can be affected by frequent conversions to new products; the allocation of manufacturing capacity to more complex, smaller-volume products; and the reallocation of manufacturing capacity across various product lines. We have commenced expansion of our production capacity in the United States and in other regions where we operate.
Sadana currently serves on the Board of Directors of Silicon Laboratories, Inc. Mr. Sadana holds a B.Tech. in Electrical Engineering from the Indian Institute of Technology, Kharagpur, India and an MS in Electrical Engineering from Stanford University.
Sadana holds a B.Tech. in Electrical Engineering from the Indian Institute of Technology, Kharagpur, India and an MS in Electrical Engineering from Stanford University.
The disruption of our supply of materials, components, or services, or the extension of our lead times could have a material adverse effect on our business, results of operations, or financial condition.
The disruption of our supply of materials, components, or services, or the extension of our lead times could have a material adverse effect on our business, results of operations, or financial condition. Our operations are dependent on a reliable and uninterrupted supply of electrical power and water to our manufacturing facilities.
NOR : NOR products are non-volatile re-writable semiconductor memory devices that provide fast read speeds. NOR is most commonly used for reliable code storage (e.g., boot, application, operating system, and execute-in-place code in an embedded system) and for frequently changing small data storage and is ideal for automotive, industrial, and consumer applications.
NOR is most commonly used for reliable code storage (e.g., boot, application, operating system, and execute-in-place code in an embedded system) and for frequently changing small data storage and is ideal for automotive, industrial, and consumer applications.
Product design and development efforts include high-density DDR5, LPDDR5, HBM, CXL based products, and advanced graphics DRAM; 3D NAND (including TLC and QLC technologies); mobile and storage solutions (including firmware and controllers); managed NAND; SSDs; and other memory technologies and systems. To compete in the semiconductor memory and storage markets, we must continue to develop technologically advanced products and processes.
Product design and development efforts include HBM, DDR5, LPDDR5, high-capacity MRDIMMs, CXL based products, and advanced graphics DRAM; TLC and QLC NAND technologies; mobile and storage solutions (including firmware and controllers) in managed NAND and SSDs; and other memory technologies and systems.
Our GDDR6 and GDDR6X DRAM graphics products are incorporated into gaming consoles, PC graphics cards, and graphics processing unit-based data center solutions, which are the driving force behind applications such as AI, virtual and augmented reality, 4K and 8K gaming, and professional design.
Our GDDR6 and GDDR6X DRAM graphics products are incorporated into gaming consoles, PC graphics cards, and graphics processing unit-based data center solutions, which are the driving force behind applications such as AI, virtual and augmented reality, 4K and 8K gaming, and professional design. 8 Table of Contents In 2024, we announced our next generation GDDR7 graphics memory which delivers high-performance memory in a power-optimized design.
Patents and Licenses As of August 31, 2023, we owned approximately 13,100 active U.S. patents and 6,300 active foreign patents. In addition, we have thousands of U.S. and foreign patent applications pending. Our patents have various terms expiring through 2042.
Patents and Licenses As of August 29, 2024, we owned approximately 14,500 active U.S. patents and 7,000 active foreign patents. In addition, we have thousands of U.S. and foreign patent applications pending. Our patents have various terms expiring through 2043.
Human Capital We depend on a highly educated and experienced workforce to design, develop, and manufacture high-quality, cutting-edge memory and storage solutions.
R&D expenses can vary significantly depending on the timing of product qualification and the scope of the product. Human Capital We depend on a highly educated and experienced workforce to design, develop, and manufacture high-quality, cutting-edge memory and storage solutions.
From time to time, we sell and/or license our technology to other parties and continue to pursue opportunities to monetize our investments in our intellectual property through partnering and other arrangements.
From time to time, we sell and/or license our technology to other parties and continue to pursue opportunities to monetize our investments in our intellectual property through partnering and other arrangements. We have also jointly developed memory and storage product and process technology with third parties on a limited basis.
We are also focused on developing new fundamentally different memory structures, materials, and packages designed to facilitate our transition to next generation products. Additional R&D efforts are concentrated on the enablement of advanced computing, storage, and mobile memory architectures and the investigation of new opportunities that leverage our core semiconductor expertise.
Additional R&D efforts are concentrated on the enablement of advanced computing, storage, and mobile memory architectures and the investigation of new opportunities that leverage our core semiconductor expertise.
While we have not experienced any material adverse effects to our operations from environmental regulations, changes in regulations could necessitate additional capital expenditures, modification of our operations or chemical usage, or other compliance actions. 16 Table of Contents Trade Regulations Sales of our memory and storage products, and the transfer of related technical information and know-how, including support, are subject to laws and regulations governing international trade, including, but not limited to, export control, customs, and sanctions regulations administered by U.S. government agencies such as the Bureau of Industry and Security (“BIS”) of the U.S.
Trade Regulations Sales of our memory and storage products, and the transfer of related technical information and know-how, including support, are subject to laws and regulations governing international trade, including, but not limited to, export control, customs, and sanctions regulations administered by U.S. government agencies such as the Bureau of Industry and Security (“BIS”) of the U.S.
The disruption of our supply of materials, components, or services, or the extension of our lead times could have a material adverse effect on our business, results of operations, or financial condition. Our inability to source materials, supplies, capital equipment, or third-party services could affect our overall production output and our ability to fulfill customer demand.
Any power shortages, capacity constraints, prolonged outages, or significant or unexpected increases in the cost of power could have a material adverse effect on our business, results of operations, or financial condition. 13 | 2024 10-K Table of Contents Our inability to source materials, supplies, capital equipment, or third-party services could affect our overall production output and our ability to fulfill customer demand.
In addition to our proactive efforts on safety, our team member wellness program offers resources across our five pillars of wellbeing (physical, mental, social, career, and financial).
Our safety program creates a unified corporate safety culture by establishing a formal training structure and common safety practices across our global facilities. In addition to our proactive efforts on safety, our team member wellbeing program offers resources across our five pillars (physical, mental, social, career, and financial).
Sadana, 54, joined us in June 2017 as our Executive Vice President and Chief Business Officer. From April 2010 to May 2016, Mr. Sadana served in various roles at SanDisk Corporation, including Executive Vice President, Chief Strategy Officer, and General Manager, Enterprise Solutions until it was acquired by Western Digital in May 2016. Mr.
Sadana served in various roles at SanDisk Corporation, including Executive Vice President, Chief Strategy Officer, and General Manager, Enterprise Solutions until it was acquired by Western Digital in May 2016. Mr. Sadana currently serves on the Board of Directors of Silicon Laboratories, Inc. Mr.
R&D expenses vary primarily with the number of development and pre-qualification wafers processed and end-product solutions developed, personnel costs, and the cost of advanced equipment dedicated to new product and process development, such as investments in EUV lithography equipment.
Our primary R&D centers are located in Boise, Idaho; San Jose, California; India; Japan; Taiwan; China; Italy; Singapore; Germany; Malaysia; and other sites in the United States. 14 Table of Contents R&D expenses vary primarily with the number of development and pre-qualification wafers processed and end-product solutions developed, personnel costs, and the cost of advanced equipment dedicated to new product and process development, such as investments in EUV lithography equipment.
NAND is used in SSDs for the enterprise and cloud, client, and consumer markets and in removable storage markets. Managed NAND is used in smartphones and other mobile devices, and in consumer, automotive, and embedded markets. Low-density NAND is ideal for applications like automotive, surveillance, machine-to-machine, automation, printer, and home networking.
Managed NAND is used in smartphones and other mobile devices, and in consumer, automotive, and embedded markets. Low-density NAND is ideal for applications like automotive, surveillance, machine-to-machine, automation, printer, and home networking. In 2022, we began volume production of 232-layer NAND (“Micron G8 NAND”), the industry’s first eighth-generation NAND.
Constraints within our supply chain for certain materials and integrated circuit components could limit our bit shipments, which could have a material adverse effect on our business, results of operations, or financial condition. 12 Table of Contents Our manufacturing processes are also dependent on our relationships with third-party manufacturers of controllers, analog integrated circuits, and other components used in some of our products and with outsourced semiconductor foundries, assembly and test providers, contract manufacturers, logistics carriers, and other service providers, including providers of electricity and other utilities.
Our manufacturing processes are also dependent on our relationships with third-party manufacturers of controllers, analog integrated circuits, and other components used in some of our products and with outsourced semiconductor foundries, assembly and test providers, contract manufacturers, logistics carriers, and other service providers, including providers of maintenance for our advanced semiconductor manufacturing equipment and providers of electricity and other utilities.
Client SSDs: SBU sales to the client SSD market in 2023 consisted primarily of our 2450, 2400, and 3400 series client SSDs. Our client SSDs, targeted for leading personal computer OEMs, have mostly replaced hard disk drives used in notebooks, desktops, workstations, and other consumer applications, and deliver high performance, power efficiency, security, and capacity.
Our client SSDs, targeted for leading personal computer OEMs, have mostly replaced hard disk drives used in notebooks, desktops, workstations, and other consumer applications, and deliver high performance, power efficiency, security, and capacity. In 2024, we expanded our technology portfolio with the 3500 NVMe SSD, our first performance client SSD built on Micron G8 NAND.
Our partnerships with K-12 and post-secondary education systems are key to training and inspiring the next generation to consider STEM careers in the semiconductor industry. We use AI to reduce or eliminate the potential for bias from resumes, allowing us to focus on individual merit over personal characteristics.
Our partnerships with K-12 and post-secondary education systems are key to training and inspiring the next generation to consider STEM careers in the semiconductor industry. On hiring, we focus on merit and use a variety of means to find the best talent.
We also provide exclusive access to near-site, company-sponsored childcare centers, financial subsidies to help families with cost, and partnerships with community centers. We are a member of the Responsible Business Alliance (“RBA”), a group of leading companies focused on promoting responsible working conditions, ethical business practices, and environmental stewardship throughout our global supply chain.
We also provide family support for caregiving needs through various solutions including onsite or near-site childcare centers, backup care support and referral resources. We are a member of the Responsible Business Alliance (“RBA”), a group of leading companies focused on promoting responsible working conditions, ethical business practices, and environmental stewardship throughout our global supply chain.
We and our competitors generally seek to increase wafer output, improve yields, and reduce die size, which could result in significant increases in worldwide supply and downward pressure on prices. During periods of supply overcapacity, the industry may experience a temporary interruption in increased wafer output due to curtailed capital expenditures.
We and our competitors generally seek to increase supply to address growing market demands, improve yields, and reduce die size, which could result in significant increases in worldwide supply and downward pressure on prices.
Some of these license agreements require us to make one-time or periodic payments while others have resulted in us receiving payments. We may need to obtain additional licenses or renew existing license agreements in the future, and we may enter into additional sales or licenses of intellectual property and partnering arrangements.
We may need to obtain additional licenses or renew existing license agreements in the future, and we may enter into additional sales or licenses of intellectual property and partnering arrangements. We are unable to predict whether these license agreements can be obtained or renewed on terms acceptable to us.
We are unable to predict whether these license agreements can be obtained or renewed on terms acceptable to us. Research and Development Our R&D efforts are focused primarily on development of memory and storage solutions, including our industry-leading DRAM and NAND technology, that enable continuous improvement in performance and cost structure for our products.
Research and Development Our R&D efforts are focused primarily on development of memory and storage solutions, including our industry-leading DRAM and NAND technology, that enable continuous improvement in performance and cost structure for our products. Our 1-gamma DRAM pilot production using EUV lithography is progressing well, and we are on track for volume production in calendar 2025.
SSDs : SSD storage products incorporate NAND, a controller, and firmware and offer significant performance and features over hard disk drives, including smaller form factors, faster read and write speeds, higher reliability, and lower power consumption. We offer SSD solutions utilizing our NAND technology to the enterprise and cloud, client, and consumer markets.
Solid State Drives (“SSDs”) : SSD storage products incorporate NAND, a controller, and firmware to offer significant performance and features over hard disk drives, including smaller form factors, faster read and write speeds, higher reliability, and lower power consumption needed to address the growing demands of data-centric workloads, ever-increasing expectations of client users, and the stringent requirements of automotive and industrial applications.
Resources Supply Chain, Materials, and Third-Party Service Providers Our supply chain and operations are dependent on the availability of materials that meet exacting standards and the use of third parties to provide us with components and services. We generally have multiple sources of supply for our materials and services.
As such, expanding production capacity in the United States and certain other regions may introduce more challenges than we would experience in geographies with more established ecosystems. 12 Table of Contents Resources Supply Chain, Materials, and Third-Party Service Providers Our supply chain and operations are dependent on the availability of materials that meet exacting standards and the use of third parties to provide us with components and services.
Embedded Business Unit (“EBU”) EBU includes memory and storage products and solutions sold into automotive, industrial, and consumer markets and includes discrete and module DRAM, discrete NAND, managed NAND, SSDs, and NOR. EBU reported revenue of $3.64 billion in 2023, $5.24 billion in 2022, and $4.21 billion in 2021.
MBU sales to the mobile market in 2024 consisted primarily of LPDDR5 and LPDDR4 DRAM and managed NAND solutions. Embedded Business Unit (“EBU”) EBU includes memory and storage products and solutions sold into the intelligent edge through the automotive, industrial, and consumer embedded markets including discrete and module DRAM, discrete NAND, managed NAND, SSDs, and NOR.
Each of our sites have health and safety committees, which are designed to promote overall operations and communications regarding safety and to help lead and implement secure and compliant work areas. Our safety program creates a unified corporate safety culture by establishing a formal training structure and common safety practices across our global facilities.
Health, Safety, and Wellbeing Proactive efforts to prevent occupational illnesses and injuries allow us to maintain a safe, healthy, and secure workplace. Each of our sites have health and safety committees, which are designed to promote overall operations and communications regarding safety and to help lead and implement secure and compliant work areas.
DRAM products lose content when power is turned off (“volatile”) and are most commonly used in client, cloud server, enterprise, networking, graphics, industrial, and automotive markets.
DRAM products lose content when power is turned off (“volatile”) and are most commonly used in the data center, client PC, graphics, industrial, and automotive markets. In 2023, we began shipping the industry’s first 1β (1-beta) production node, which offers further improvements in power efficiency and bit density.
If competitors are more successful at developing or implementing new product or process technology, their products could have cost or performance advantages. Manufacturing We manufacture our products within our own facilities located in Taiwan, Singapore, Japan, the United States, Malaysia, and China, and also utilize subcontractors to perform certain manufacturing processes.
Manufacturing We manufacture our products within our own facilities located in Taiwan, Singapore, Japan, the United States, Malaysia, China, and India and also utilize subcontractors to perform certain manufacturing processes. Our products are manufactured on 300mm wafers in facilities that generally operate 24 hours per day, seven days per week.
Our total compensation strategy includes base salary, annual bonuses, equity awards, a discounted stock purchase plan, and a comprehensive benefits package. Diversity, Equality, and Inclusion We have five diversity, equality, and inclusion (“DEI”) commitments that serve as the roadmap of our DEI work internally, within our industry, and in the community at large.
Diversity, Equality, and Inclusion We have five diversity, equality, and inclusion (“DEI”) commitments that serve as the roadmap of our DEI work internally, within our industry, and in the community at large. To hold ourselves accountable, each commitment is assigned an executive sponsor who is responsible for its strategy and execution.
Our products are manufactured on 300mm wafers in facilities that generally operate 24 hours per day, seven days per week. Semiconductor manufacturing is capital intensive, requiring large investments in sophisticated facilities and equipment.
Semiconductor manufacturing is capital intensive, requiring large investments in sophisticated facilities and equipment.
The results of the survey are shared with all team members and management uses feedback from the survey to identify and implement continuous improvements to our culture and workplace practices. Compensation and Benefits Our compensation programs are designed to support our team members’ financial and personal wellbeing by providing a valuable return for their contributions to the company.
Compensation and Benefits Our compensation programs are designed to support our team members’ financial and personal wellbeing by providing a valuable return for their contributions to the Company. Our total compensation strategy includes base salary, bonuses, equity awards, a discounted stock purchase plan, and a comprehensive benefits package.
Cloud servers supporting AI and data-centric workloads require significantly increasing quantities of DRAM, HBM, and NAND as the task of turning data into insight becomes increasingly memory-centric. As modern servers pack more processing cores into CPUs, the memory bandwidth per CPU core has been decreasing.
Cloud servers supporting AI and data-centric workloads require significantly increasing quantities of DRAM, including HBM, and NAND as the task of turning data into insight becomes increasingly memory-centric. In 2024, we began volume production of our 8-high 24GB HBM3E with increased bandwidth and superior power efficiency enabled by our advanced 1β process node.
A pay equity analysis will be conducted in 2024 with our base pay merit review. We also continually assess our global leave, medical, and financial benefits to ensure inclusiveness.
In 2024, we achieved global pay equity for all underrepresented employees in compensation across base pay and stock rewards. We plan to also continually assess our global leave, medical, and financial benefits to ensure market competitiveness and opportunities to create greater inclusion.
Our embedded memory and storage solutions enable edge devices in the consumer products market to store, connect, and transform information in the IoT. 9 | 2023 10-K Table of Contents Storage Business Unit (“SBU”) SBU includes SSDs and component-level solutions sold into enterprise and cloud, client, and consumer storage markets.
Our embedded memory and storage solutions enable intelligent edge devices in the consumer products market to store, connect, and transform information in the IoT. EBU reported revenue of $4.61 billion 2024, $3.64 billion in 2023, and $5.24 billion in 2022.
The enterprise and cloud storage markets are driven by the growth of applications that store, access, and analyze data in the cloud. Applications such as machine learning servers require fast access to data with low latency, predictable performance, and high storage capacities.
Applications such as machine learning servers require fast access to data with low latency, predictable performance, and high storage capacities. Our 6500 30TB SSDs features high performance, reliability, and endurance for AI data lake applications. In 2024, we began sampling our 9550 series SSD to meet the growing demands of AI, high-performance computing, and many other workloads.
LPDRAM products, which are engineered to meet standards for performance and power consumption, are sold into smartphone and other mobile-device markets (including client markets for Chromebooks and notebook PCs), as well as into the automotive, industrial, and consumer markets. 7 | 2023 10-K Table of Contents NAND : NAND products are non-volatile, re-writeable semiconductor storage devices that provide high-capacity, low-cost storage with a variety of performance characteristics.
Total reported DRAM revenue was $17.60 billion in 2024, $10.98 billion in 2023, and $22.39 billion in 2022. NAND : NAND products are non-volatile, re-writeable semiconductor storage devices that provide high-capacity, low-cost storage with a variety of performance characteristics. NAND is used in SSDs for the data center, client PC, consumer, and automotive markets and in removable storage markets.
In addition, our products enable increasingly advanced vision and sensor based automated systems to support driver assistance solutions and vehicle safety. Our comprehensive and expanding portfolio of DRAM, NAND, and NOR solutions to the automotive market, as well as our extensive customer support network, enable us to maintain our strong leadership position in this market.
Adoption of Level 2+ advanced driver-assistance systems capabilities continue to gain momentum, further expanding content per vehicle. Our products enable increasingly advanced vision and sensor based automated systems to support driver assistance solutions and vehicle safety.
We have also jointly developed memory and storage product and process technology with third parties on a limited basis. 13 | 2023 10-K Table of Contents We have a number of patent and intellectual property license agreements and have, from time to time, licensed or sold our intellectual property to third parties.
We have a number of patent and intellectual property license agreements and have, from time to time, licensed or sold our intellectual property to third parties. Some of these license agreements require us to make one-time or periodic payments while others have resulted in us receiving payments.
Consumer : EBU sales to the consumer market in 2023 consisted primarily of our LPDDR4 and LPDDR5 DRAM, DDR4 and DDR3 DRAM, and SLC NAND.
EBU sales to the automotive, industrial, and consumer embedded markets in 2024 consisted primarily of LPDDR5 and LPDDR4 DRAM, DDR4 and DDR3 DRAM, and managed NAND. Storage Business Unit (“SBU”) SBU includes SSDs and component-level storage solutions sold into the data center, PC, and consumer markets.
In 2023, demand was driven by 5G infrastructure deployments, data center networking growth, and increasing data transfer requirements across multiple industries. 8 Table of Contents Mobile Business Unit (“MBU”) MBU includes memory and storage products sold into the mobile market including discrete NAND, DRAM, and managed NAND products.
CNBU sales to the data center, PC, and graphics markets in 2024 consisted primarily of our HBM, DDR5 and DDR4, LPDDR5, and GDDR6 DRAM products. Mobile Business Unit (“MBU”) MBU includes memory and storage products sold into the smartphone and other mobile-device markets including discrete NAND, DRAM, and managed NAND products.
Our DDR5 alleviates this bottleneck by providing higher bandwidth compared to previous generations, enabling improved performance and scaling. We expect that our new server DDR5 memory will be a key enabler of CPU core count growth and the bandwidth that DDR5 delivers will be central to unlocking overall server system performance gains for data-intensive workloads like AI and high-performance computing.
As modern servers pack more processing cores into central processing units (“CPUs”), the memory bandwidth per CPU core has been decreasing. Our DDR5 alleviates this bottleneck by providing higher bandwidth compared to previous generations, enabling improved performance and scaling.
Removed
Products by Business Unit and Market Compute and Networking Business Unit (“CNBU”) CNBU includes memory products and solutions sold into client, cloud server, enterprise, graphics, and networking markets. CNBU reported revenue of $5.71 billion in 2023, $13.69 billion in 2022, and $12.28 billion in 2021.
Added
The majority of our DRAM bit production in 2024 was on leading-edge 1α (1-alpha) and 1ß nodes.
Removed
CNBU sales in 2023 consisted primarily of DRAM products produced on 1x, 1y, 1z, and 1α (1-alpha) technology nodes. In 2023, we achieved several important product qualifications on our industry-leading 1ß (1-beta) DRAM node and are well positioned to ramp manufacturing of CNBU products in 2024.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Our debt obligations could adversely impact us as follows: • require us to use a large portion of our cash flow to pay principal and interest on debt, which will reduce the amount of cash flow available to fund our business activities; • adversely impact our credit rating, which could increase borrowing costs; • limit our future ability to raise funds for capital expenditures, strategic acquisitions or business opportunities, R&D, and other general corporate requirements; • restrict our ability to incur specified indebtedness, create or incur certain liens, and enter into sale-leaseback financing transactions; • increase our vulnerability to adverse economic and industry conditions; • increase our exposure to rising interest rates from variable rate indebtedness; and • result in certain of our debt instruments becoming immediately due and payable or being deemed to be in default if applicable cross default, cross-acceleration and/or similar provisions are triggered.
Our debt obligations could adversely impact us as follows: • require us to use a large portion of our cash flow to pay principal and interest on debt, which will reduce the amount of cash flow available to fund our business activities; • adversely impact our credit rating, which could increase borrowing costs and reduce our ability to raise funds on favorable terms; • limit our future ability to raise funds for capital expenditures, strategic acquisitions or business opportunities, R&D, and other general corporate requirements; • restrict our ability to incur specified indebtedness, create or incur certain liens, and enter into sale-leaseback financing transactions; • increase our vulnerability to adverse economic and industry conditions; • increase our exposure to rising interest rates from variable rate indebtedness; and • result in certain of our debt instruments becoming immediately due and payable or being deemed to be in default if applicable cross default, cross-acceleration and/or similar provisions are triggered.
Acquisitions and the formation or operation of alliances, such as joint ventures and other partnering arrangements, involve numerous risks, including the following: • integrating the operations, technologies, and products of acquired or newly formed entities into our operations; • increasing capital expenditures to upgrade and maintain facilities; • increased debt levels; • the assumption of unknown or underestimated liabilities; • the use of cash to finance a transaction, which may reduce the availability of cash to fund working capital, capital expenditures, R&D expenditures, and other business activities; • diverting management’s attention from daily operations; • managing larger or more complex operations and facilities and employees in separate and diverse geographic areas; • hiring and retaining key employees; • requirements imposed by government authorities in connection with the regulatory review of a transaction, which may include, among other things, divestitures or restrictions on the conduct of our business or the acquired business; • underestimating the costs or overestimating the benefits, including product, revenue, cost and other synergies and growth opportunities that we expect to realize, and we may not achieve those benefits; • failure to maintain customer, vendor, and other relationships; • inadequacy or ineffectiveness of an acquired company’s internal financial controls, disclosure controls and procedures, compliance programs, and/or environmental, health and safety, anti-corruption, human resource, or other policies or practices; and • impairment of acquired intangible assets, goodwill, or other assets as a result of changing business conditions or technological advancements.
Acquisitions and the formation or operation of alliances, such as joint ventures and other partnering arrangements, involve numerous risks, including the following: • integrating the operations, technologies, and products of acquired or newly formed entities into our operations; • increasing capital expenditures to upgrade and maintain facilities; • increased debt levels; • the assumption of unknown or underestimated liabilities; • the use of cash to finance a transaction, which may reduce the availability of cash to fund working capital, capital expenditures, R&D expenditures, and other business activities; • diverting management’s attention from daily operations; • managing larger or more complex operations and facilities and employees in separate and diverse geographic areas; • hiring and retaining key employees; • requirements imposed by government authorities in connection with the regulatory review of a transaction, which may include, among other things, divestitures, imposition of significant obligations, or restrictions on the conduct of our business or the acquired business; • underestimating the costs or overestimating the benefits, including product, revenue, cost and other synergies and growth opportunities that we expect to realize, and we may not achieve those benefits; • failure to maintain customer, vendor, and other relationships; • inadequacy or ineffectiveness of an acquired company’s internal financial controls, disclosure controls and procedures, compliance programs, and/or environmental, health and safety, anti-corruption, human resource, or other policies or practices; and • impairment of acquired intangible assets, goodwill, or other assets as a result of changing business conditions or technological advancements.
For example, following the May 21, 2023 decision of its cybersecurity review of our products sold in China, the CAC determined that critical information infrastructure operators in China may not purchase Micron products, impacting our revenue with companies headquartered in mainland China and Hong Kong, including direct sales as well as indirect sales through distributors.
For example, following the May 2023 decision of its cybersecurity review of our products sold in China, the CAC determined that critical information infrastructure operators in China may not purchase Micron products, impacting our revenue with companies headquartered in mainland China and Hong Kong, including direct sales as well as indirect sales through distributors.
Acquisitions of, or alliances with, technology companies are inherently risky and may not be successful and could have a material adverse effect on our business, results of operations, or financial condition. We have incurred restructure charges and may incur restructure charges in future periods and may not realize expected savings or other benefits from restructure plans.
Acquisitions of, or alliances with, technology companies are inherently risky and may not be successful and could have a material adverse effect on our business, results of operations, or financial condition. We may incur restructure charges in future periods and may not realize expected savings or other benefits from restructure plans.
Through cyberattacks on technology infrastructure and systems, unauthorized parties may obtain access to computer systems, networks, and data, including cloud-based platforms. The technology infrastructure and systems of our suppliers, vendors, service providers, cloud solution providers, and partners have in the past experienced, and may in the future experience, such attacks, which could impact our operations.
Through cyberattacks on technology infrastructure and systems, unauthorized parties may obtain access to computer systems, networks, and data, including cloud-based platforms. Our technology infrastructure and systems and that of our suppliers, vendors, service providers, cloud solution providers, and partners have in the past experienced, and may in the future experience, such attacks, which could impact our operations.
As we continue to focus on developing system solutions with manufacturers of consumer products, including autonomous driving, augmented reality, and others, we may be exposed to greater potential for personal liability claims against us as a result of consumers’ use of those products.
As we continue to focus on developing system solutions with manufacturers of consumer products, including autonomous driving, augmented reality, AI, and others, we may be exposed to greater potential for personal liability claims against us as a result of consumers’ use of those products.
Given our commitment to relevant social and environmental issues as it relates to our business, we actively manage these issues and have established and publicly announced certain goals, commitments, and targets which we may refine or even expand further in the future.
Given our commitment to social and environmental issues as it relates to our business, we actively manage these issues and have established and publicly announced certain goals, commitments, and targets which we may refine or even expand further in the future.
Risks Related to Capitalization and Financial Markets • our ability to generate sufficient cash flows or obtain access to external financing; • our debt obligations; • changes in foreign currency exchange rates; • counterparty default risk; • volatility in the trading price of our common stock; and • fluctuations in the amount and frequency of our common stock repurchases and payment of cash dividends and resulting impacts. 21 | 2023 10-K Table of Contents Risks Related to Our Business, Operations, and Industry Volatility in average selling prices for our semiconductor memory and storage products may adversely affect our business.
Risks Related to Capitalization and Financial Markets • our ability to generate sufficient cash flows or obtain access to external financing; • our debt obligations; • changes in foreign currency exchange rates; • counterparty default risk; • volatility in the trading price of our common stock; and • fluctuations in the amount and frequency of our common stock repurchases and payment of cash dividends and resulting impacts. 21 | 2024 10-K Table of Contents Risks Related to Our Business, Operations, and Industry Volatility in average selling prices for our semiconductor memory and storage products may adversely affect our business.
Our engagement with these third parties may also expose us to risks associated with their respective compliance with laws and regulations. 36 Table of Contents New and evolving environmental health, safety, and product considerations, including those related to greenhouse gas emissions and climate change, the purchase, use and disposal of regulated and/or hazardous chemicals, and the potential resulting environmental, health or safety impacts, may result in new laws, regulations, or industry standards that may affect us, our suppliers, and our customers.
Our engagement with these third parties may also expose us to risks associated with their respective compliance with laws and regulations. 38 Table of Contents New and evolving environmental health, safety, and product considerations, including those related to greenhouse gas emissions and climate change, the purchase, use and disposal of regulated and/or hazardous chemicals, and the potential resulting environmental, health or safety impacts, may result in new laws, regulations, or industry standards that may affect us, our suppliers, and our customers.
Unsuccessful efforts to develop new memory and storage technologies and products could have a material adverse effect on our business, results of operations, or financial condition. 25 | 2023 10-K Table of Contents We may not be able to achieve expected returns from capacity expansions.
Unsuccessful efforts to develop new memory and storage technologies and products could have a material adverse effect on our business, results of operations, or financial condition. 25 | 2024 10-K Table of Contents We may not be able to achieve expected returns from capacity expansions.
In addition, if any of our suppliers was to cease operations or become insolvent, this could impact their ability to provide us with necessary supplies, and we may not be able to obtain the needed supply in a timely way or at all from other providers.
In addition, if any of our suppliers were to cease operations or become insolvent, this could impact their ability to provide us with necessary supplies, and we may not be able to obtain the needed supply in a timely way or at all from other providers.
Inflationary pressures have increased, and may continue to increase costs for materials, supplies, and services. Regardless of contract structure, large swings in demand may exceed our contracted supply and/or our suppliers’ capacity to meet those demand changes resulting in a shortage of parts, materials, or capacity needed to manufacture our products.
Inflationary pressures may continue to increase costs for materials, supplies, and services. Regardless of contract structure, large swings in demand may exceed our contracted supply and/or our suppliers’ capacity to meet those demand changes resulting in a shortage of parts, materials, or capacity needed to manufacture our products.
We have received, and may in the future continue to receive, benefits and incentives from national, state, and local governments in various regions of the world designed to encourage us to establish, maintain, or increase investment, workforce, or production in those regions.
We have received, and may in the future continue to receive, benefits and incentives from national, state, and local governments in various regions of the world designed to encourage us to establish, maintain, or increase investment, workforce, research and development, or production in those regions.
Factors that may limit our ability to reduce our per gigabit manufacturing costs at sufficient levels to prevent deterioration of or improve gross margins include, but are not limited to: • strategic product diversification decisions affecting product mix; • increasing complexity of manufacturing processes; • difficulties in transitioning to smaller line-width process technologies or additional 3D memory layers or NAND cell levels; • process complexity including number of mask layers and fabrication steps; • manufacturing yield; • technological barriers; • changes in process technologies; • new products that may require relatively larger die sizes; • start-up or other costs associated with capacity expansions; • higher costs of goods and services due to inflationary pressures or market conditions; and • higher manufacturing costs per gigabit due to fabrication facility underutilization, lower wafer output, and insufficient volume to run new technology nodes to achieve cost optimization.
Factors that may limit our ability to reduce our per gigabit manufacturing costs at sufficient levels to prevent deterioration of or improve gross margins include, but are not limited to: • strategic product diversification decisions affecting product mix; • increasing complexity of our product portfolio, which may impact operational costs; • increasing complexity of manufacturing processes; • difficulties in transitioning to smaller line-width process technologies or additional 3D memory layers or NAND cell levels; • process complexity including number of mask layers and fabrication steps; • manufacturing yield; • technological barriers; • changes in process technologies; • new products that may require relatively larger die sizes or advanced packaging technologies; • start-up or other costs associated with capacity expansions; • higher costs of goods and services due to inflationary pressures or market conditions; and • higher manufacturing costs per gigabit due to fabrication facility underutilization, lower wafer output, and insufficient volume to run new technology nodes to achieve cost optimization.
In connection with any restructure initiatives, we could incur restructure charges, loss of production output, loss of key personnel, disruptions in our operations, and difficulties in the timely delivery of products, which could have a material adverse effect on our business, results of operations, or financial condition. 33 | 2023 10-K Table of Contents Risks Related to Intellectual Property and Litigation We may be unable to protect our intellectual property or retain key employees who are knowledgeable of and develop our intellectual property.
In connection with any restructure initiatives, we could incur restructure charges, loss of production output, loss of key personnel, disruptions in our operations, and difficulties in the timely delivery of products, which could have a material adverse effect on our business, results of operations, or financial condition. 35 | 2024 10-K Table of Contents Risks Related to Intellectual Property and Litigation We may be unable to protect our intellectual property or retain key employees who are knowledgeable of and develop our intellectual property.
In 2023, nearly half of our revenue was from sales to customers who have headquarters located outside the United States, while over 80% of our revenue in 2023 was from products shipped to customer locations outside the United States.
In 2024, nearly half of our revenue was from sales to customers who have headquarters located outside the United States, while over 80% of our revenue in 2024 was from products shipped to customer locations outside the United States.
The semiconductor memory and storage markets are highly competitive. We face intense competition in the semiconductor memory and storage markets from a number of companies, including Kioxia Holdings Corporation; Samsung Electronics Co., Ltd.; SK hynix Inc.; and Western Digital Corporation. Our competitors may use aggressive pricing to obtain market share.
We face intense competition in the semiconductor memory and storage markets from a number of companies, including Kioxia Holdings Corporation; Samsung Electronics Co., Ltd.; SK hynix Inc.; and Western Digital Corporation. Our competitors may use aggressive pricing to obtain market share.
In the event of such default, we could incur significant losses, which could have a material adverse effect on our business, results of operations, or financial condition. The trading price of our common stock has been and may continue to be volatile.
In the event of such default, we could incur significant losses, which could have a material adverse effect on our business, results of operations, or financial condition. 40 Table of Contents The trading price of our common stock has been and may continue to be volatile.
We may not realize expected savings or other benefits from our current or future restructure activities and may incur additional restructure charges or other losses in future periods associated with other initiatives.
We may not realize expected savings or other benefits from future restructure activities and may incur additional restructure charges or other losses in future periods associated with other initiatives.
Management’s Discussion and Analysis of Financial Condition and Results of Operations – Overview – Industry Conditions” for information regarding our current underutilization. A significant portion of our manufacturing costs are fixed and do not vary proportionally with changes in production output.
Management’s Discussion and Analysis of Financial Condition and Results of Operations – Overview – Industry Conditions” for information regarding recent underutilization charges. A significant portion of our manufacturing costs are fixed and do not vary proportionally with changes in production output.
Across our global operations, significant transactions and balances are denominated in currencies other than the U.S. dollar (our reporting currency), primarily the Chinese yuan, euro, Indian rupee, Japanese yen, Malaysian ringgit, New Taiwan dollar, and Singapore dollar. In addition, a significant portion of our manufacturing costs are denominated in foreign currencies.
Across our global operations, significant transactions and balances are denominated in currencies other than the U.S. dollar (our reporting currency), primarily the Canadian dollar, Chinese yuan, euro, Indian rupee, Japanese yen, Malaysian ringgit, New Taiwan dollar, and Singapore dollar. In addition, a significant portion of our manufacturing costs are denominated in some of the foreign currencies mentioned above.
Risks Related to Intellectual Property and Litigation • protecting our intellectual property and retaining key employees who are knowledgeable of and develop our intellectual property; • legal proceedings and claims; and • claims that our products or manufacturing processes infringe or otherwise violate the intellectual property rights of others or failure to obtain or renew license agreements covering such intellectual property.
Risks Related to Intellectual Property and Litigation • protecting our intellectual property and retaining key employees who are knowledgeable of and develop our intellectual property; • legal, regulatory and administrative investigations, inquiries, proceedings, and claims; and • claims that our products or manufacturing processes infringe or otherwise violate the intellectual property rights of others or failure to obtain or renew license agreements covering such intellectual property.
Cyberattacks can include ransomware, computer denial-of-service attacks, worms, supply chain attacks, social engineering, open source vulnerabilities, and other malicious software programs or other attacks, including those using techniques that change frequently or may be disguised or difficult to detect, or designed to remain dormant until a triggering event, impersonation of authorized users, and efforts to discover and exploit any design flaws, “bugs,” security vulnerabilities, as well as intentional or unintentional acts by employees or other insiders with access privileges.
Cyberattacks can include ransomware, denial-of-service attacks, zero-day attacks, supply chain attacks, “phishing” and other forms of social engineering, exploitation of open source software vulnerabilities, and other malicious software programs or other attacks, including those using techniques that change frequently or may be disguised or difficult to detect, or designed to remain dormant until a triggering event, impersonation of authorized users, and efforts to discover and exploit any design flaws, “bugs,” security vulnerabilities, as well as intentional or unintentional acts by employees or other insiders with access privileges.
Our inability to protect our intellectual property or retain key employees who are knowledgeable of and develop our intellectual property could have a material adverse effect on our business, results of operations, or financial condition. Legal proceedings and claims could have a material adverse effect on our business, results of operations, or financial condition.
Our inability to protect our intellectual property or retain key employees who are knowledgeable of and develop our intellectual property could have a material adverse effect on our business, results of operations, or financial condition. Legal, regulatory and administrative investigations, inquiries, proceedings, and claims could have a material adverse effect on our business, results of operations, or financial condition.
Our inability to do any of the foregoing could have a material adverse effect on our business, results of operations, or financial condition. 37 | 2023 10-K Table of Contents Debt obligations could adversely affect our financial condition.
Our inability to do any of the foregoing could have a material adverse effect on our business, results of operations, or financial condition. 39 | 2024 10-K Table of Contents Debt obligations could adversely affect our financial condition.
These expansions involve several risks including the following: • capital expenditure requirements for capacity expansions during periods of relatively low free cash flow generation, resulting from challenging memory and storage industry conditions; • availability of necessary funding, which may include external sources; • ability to realize expected grants, investment tax credits, and other government incentives, including through the U.S.
In addition, these expansions involve several risks including the following: • inability to meet capital expenditure requirements for capacity expansions, including during periods of relatively low free cash flow generation, resulting from challenging memory and storage industry conditions; • unavailability of necessary funding, which may include external sources; • inability to realize expected grants, investment tax credits, and other government incentives, including through the U.S.
We have incurred in the past, and expect to incur in the future, debt to finance our capital investments, business acquisitions, and to realign our capital structure. As of August 31, 2023, we had debt with a carrying value of $13.33 billion and may incur additional debt, including under our $2.50 billion Revolving Credit Facility.
We have incurred in the past, and expect to incur in the future, debt to finance our capital investments, business acquisitions, and to realign our capital structure. As of August 29, 2024, we had debt with a carrying value of $13.40 billion and may incur additional debt, including under our $2.50 billion Revolving Credit Facility.
Risk Factor Summary Risks Related to Our Business, Operations, and Industry • volatility in average selling prices of our products; • a range of factors that may adversely affect our gross margins; • our international operations, including geopolitical risks; • the highly competitive nature of our industry; • our ability to develop and produce new and competitive memory and storage technologies and products; • realizing expected returns from capacity expansions; • achieving or maintaining certain performance or other obligations associated with incentives from various governments; • availability and quality of materials, supplies, and capital equipment and dependency on third-party service providers; • a downturn in regional or worldwide economies; • disruptions to our manufacturing process from operational issues, natural disasters, or other events; • dependency on a select number of key customers, including international customers; • products that fail to meet specifications, are defective, or are incompatible with end uses; • breaches of our security systems or products, or those of our customers, suppliers, or business partners; • attracting, retaining, and motivating highly skilled employees; • responsible sourcing requirements and related regulations; • environmental, social, and governance considerations; • acquisitions and/or alliances; and • restructure plans may not realize expected savings or other benefits.
Risk Factor Summary Risks Related to Our Business, Operations, and Industry • volatility in average selling prices of our products; • a range of factors that may adversely affect our gross margins; • our international operations, including geopolitical risks; • the highly competitive nature of our industry; • our ability to develop and produce new and competitive memory and storage technologies and products; • realizing expected returns from capacity expansions; • achieving or maintaining certain outcomes and the compliance requirements associated with incentives from various governments; • availability and quality of materials, supplies, electrical power, water, and capital equipment, or dependency on third-party service providers; • a downturn in regional or worldwide economies; • disruptions to our manufacturing process from operational issues, natural disasters, or other events; • dependency on a select number of key customers, including international customers; • products that fail to meet specifications, are defective, or are incompatible with end uses; • breaches of our security systems or products, systems failures, interruptions, delays in service, catastrophic events, and resulting interruptions of our systems or those of our customers, suppliers, or business partners; • uncertainties and outcomes associated with the use and evolution of AI; • attracting, retaining, and motivating highly skilled employees; • responsible sourcing requirements and related regulations; • environmental, social, and governance expectations or standards; • acquisitions and/or alliances; and • restructure plans may not realize expected savings or other benefits.
Shortages or increases in lead times have occurred in the past, are currently occurring with respect to some materials and components, and may occur from time to time in the future.
Shortages or increases in lead times have occurred in the past, are currently occurring with respect to some materials and components, and may occur from time to time in the future because of the nature of the industry.
Further actions by the Chinese government could impact additional revenue inside or outside China, or our operations in China, or our ability to ship products to our customers, any of which could have a material adverse effect on our business, results of operations, or financial condition. 35 | 2023 10-K Table of Contents We cannot predict what further actions may ultimately be taken with respect to export regulations, tariffs, or other trade regulations between the United States and other countries, what products or companies may be subject to such actions, or what actions may be taken by other countries in retaliation.
Further actions by the Chinese government, through CAC action or other means, could impact revenue inside or outside China, or our operations in China, or our ability to ship products to our customers, any of which could have a material adverse effect on our business, results of operations, or financial condition. 37 | 2024 10-K Table of Contents We cannot predict what actions may be taken with respect to export regulations, tariffs, or other trade regulations between the United States and other countries, what products or companies may be subject to such actions, or what actions may be taken by other countries in retaliation.
In each of the last three years, approximately one-half of our total revenue was from our top ten customers. A disruption in our relationship with any of these customers could adversely affect our business. We could experience fluctuations in our customer base or the mix of revenue by customer as markets and strategies evolve.
Approximately one-half of our total revenue comes from our top ten customers. A disruption in our relationship with any of these customers could adversely affect our business. We could experience fluctuations in our customer base or the mix of revenue by customer as markets and strategies evolve.
Unauthorized persons, employees, former employees, nation states, or other parties may gain access to our facilities or technology infrastructure and systems to steal trade secrets or other proprietary information, compromise confidential information, create system disruptions, or cause shutdowns. This risk is exacerbated as competitors for talent, particularly engineering talent, attempt to hire our employees.
Unauthorized persons, employees, former employees, nation states, or other parties may gain access to our facilities or technology infrastructure and systems through fraudulent means and may steal trade secrets or other proprietary information, compromise confidential information, create system disruptions, or have other impacts. This risk is exacerbated as competitors for talent, particularly engineering talent, attempt to hire our employees.
The amount and frequency of our share repurchases may fluctuate, and we cannot guarantee that we will fully consummate our share repurchase authorization, or that it will enhance long-term shareholder value. Share repurchases could also increase the volatility of the trading price of our stock and will diminish our cash reserves.
The amount and frequency of our share repurchases may fluctuate, and we cannot guarantee that we will purchase all of the shares under our share repurchase authorization, or that it will enhance long-term shareholder value. Share repurchases could also increase the volatility of the trading price of our stock and will diminish our cash reserves.
The repurchase authorization could affect the trading price of our stock and increase volatility, and any announcement of a pause in, or termination of, this program may result in a decrease in the trading price of our stock. In addition, this program will diminish our cash reserves.
The repurchase authorization could affect the trading price of our stock and increase volatility, and any announcement of a pause in, or termination of, this program may result in a decrease in the trading price of our stock.
We may be associated with and subject to litigation, claims, or arbitration disputes arising from, or as a result of: • our relationships with vendors or customers, supply agreements, or contractual obligations with our subcontractors or business partners; • the actions of our vendors, subcontractors, or business partners; • our indemnification obligations, including obligations to defend our customers against third-party claims asserting infringement of certain intellectual property rights, which may include patents, trademarks, copyrights, or trade secrets; and • the terms of our product warranties or from product liability claims.
Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Contingencies.” We may be associated with and subject to litigation, claims, inquiries, investigations or disputes arising from, or as a result of: • our relationships with vendors or customers, supply agreements, or contractual obligations with our subcontractors or business partners; • the actions of our vendors, subcontractors, or business partners; • our indemnification obligations, including obligations to defend our customers against third-party claims asserting infringement of certain intellectual property rights, which may include patents, trademarks, copyrights, or trade secrets; and • the terms of our product warranties or from product liability claims.
Any political, economic, or other actions may also adversely affect our customers and the technology industry supply chain, for which Taiwan is a central hub, and as a result, could have a material adverse impact on us.
Any political, economic, or other actions may also adversely affect our customers and the technology industry supply chain, for which Taiwan is a central hub, and as a result, could have a material adverse impact on us. The semiconductor memory and storage markets are highly competitive.
Additionally, changes to immigration policies in the countries in which we operate, as well as restrictions on travel due to public health crises or other causes, may limit our ability to hire and/or retain talent in, or transfer talent to, specific locations.
Additionally, changes to immigration policies in the countries in which we operate, as well as restrictions on travel due to public health crises or other causes, may limit our ability to hire and/or retain talent in, or transfer talent to, specific locations. Our business success is dependent on our ability to attract, retain and motivate key talent.
Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Debt.” If we are unable to generate sufficient cash flows to service our debt payment obligations or satisfy our debt covenants, we may need to refinance, restructure, or amend the terms of our debt, sell assets, reduce or delay capital investments, or seek to raise additional capital.
If we are unable to generate sufficient cash flows to service our debt payment obligations or satisfy our debt covenants, we may need to refinance, restructure, or amend the terms of our debt, sell assets, reduce or delay capital investments, or seek to raise additional capital.
From time to time, we are subject to various legal proceedings and claims that arise out of the ordinary conduct of our business or otherwise, both domestically and internationally. Such claims include, but are not limited to, allegations of anticompetitive conduct and infringement of intellectual property. See “Part II – Item 8.
From time to time, we are subject to various legal, regulatory and administrative investigations, inquiries, proceedings, and claims that arise out of the ordinary conduct of our business or otherwise, both domestically and internationally. Such claims, investigations, inquiries, and proceedings may include, but are not limited to, allegations of anticompetitive conduct and infringement of intellectual property.
Such risks and uncertainties include: • reputational harm, including damage to our relationships with customers, suppliers, investors, governments, or other stakeholders; • adverse impacts on our ability to manufacture and sell products and maintain our market share; • the success of our collaborations with third parties; • increased risk of litigation, investigations, or regulatory enforcement action; • unfavorable environmental, social, and governance ratings or investor sentiment; • diversion of resources and increased costs to control, assess, and report on environmental, social, and governance metrics; • our ability to achieve our goals, commitments, and targets within timeframes announced; • increased costs to achieve our goals, commitments, and targets; • unforeseen operational and technological difficulties; • access to and increased cost of capital; and • adverse impacts on our stock price. 32 Table of Contents Any failure, or perceived failure, to meet evolving stakeholder expectations and industry standards or achieve our environmental, social, and governance goals, commitments, and targets could have an adverse effect on our business, results of operations, financial condition, or stock price.
Such risks and uncertainties include: • reputational harm, including damage to our relationships with customers, suppliers, investors, governments, or other stakeholders; • adverse impacts on our ability to manufacture and sell products and maintain our market share; • the success of our collaborations with third parties; • increased risk of litigation, investigations, or regulatory enforcement action; • unfavorable environmental, social, and governance ratings or investor sentiment; • diversion of resources and increased costs to control, assess, and report on environmental, social, and governance metrics; • our ability to achieve our goals, commitments, and targets within timeframes announced; • increased costs to achieve our goals, commitments, and targets; • unforeseen operational and technological difficulties; • access to and increased cost of capital; and • adverse impacts on our stock price.
Certain materials are primarily available in a limited number of countries, including rare earth elements, minerals, and metals. Trade disputes, geopolitical tensions, economic circumstances, political conditions, or public health issues may limit our ability to obtain such materials.
Certain materials are primarily available in a limited number of countries, including rare earth elements, minerals, and metals. Trade disputes, geopolitical tensions, economic circumstances, political conditions, or public health issues may limit our ability to obtain such materials. Although these rare earth and other materials are generally available from multiple suppliers, China is the predominant producer of these materials.
CHIPS and Science Act of 2022 (“CHIPS Act”) and other national, international, state, and local grants; • potential changes in laws or provisions of grants, investment tax credits, and other government incentives; • potential restrictions on expanding in certain geographies; • availability of equipment and construction materials; • ability to complete construction as scheduled and within budget; • availability of the necessary workforce; • ability to timely ramp production in a cost-effective manner; • increases to our cost structure until new production is ramped to adequate scale; and • sufficient customer demand to utilize our increased capacity.
CHIPS and Science Act of 2022 (“CHIPS Act”) and other national, international, state, and local grants; • potential changes in laws or provisions of grants, investment tax credits, and other government incentives; • delays and potential restrictions related to environmental regulations or permits; • potential restrictions on expanding in certain geographies; • inability to complete construction as scheduled and within budget; • inability to attract, retain and motivate key talent; • inability to timely ramp production in a cost-effective manner; • increases to our cost structure until new production is ramped to adequate scale; and • insufficient customer demand to utilize our increased capacity.
To the extent our products are hacked, or the encryption schemes are compromised or breached, this could harm our business by requiring us to employ additional resources to fix the errors or defects, exposing us to litigation, claims, and harm to our reputation.
If systems or applications that utilize our products are hacked, the encryption schemes are compromised or breached, or our suppliers are breached or attacked, this could harm our business by requiring us to employ additional resources to fix the errors or defects, and could expose us to litigation, claims, and harm to our reputation.
Any damage to our customer relationships as a result of a shortage of our products could have a material adverse effect on our business, results of operations, or financial condition.
Significant or prolonged shortages of our products could halt customer manufacturing and damage our relationships with these customers. Any damage to our customer relationships as a result of a shortage of our products could have a material adverse effect on our business, results of operations, or financial condition.
Our gross margins are dependent, in part, upon continuing decreases in per gigabit manufacturing costs achieved through improvements in our manufacturing processes and product designs.
In addition to the impact of our average selling prices, our gross margins are dependent, in part, upon continuing decreases in per gigabit manufacturing costs achieved through improvements in our manufacturing processes and product designs.
The laws of some foreign countries may not protect our intellectual property to the same degree as do U.S. laws, and our confidentiality, non-disclosure, and non-compete agreements may be unenforceable or difficult and costly to enforce. Additionally, our ability to maintain and develop intellectual property is dependent upon our ability to attract, develop, and retain highly skilled employees.
The laws of some foreign countries may not protect our intellectual property to the same degree as do U.S. laws, and our confidentiality, non-disclosure, and non-compete agreements may be unenforceable or difficult and costly to enforce.
These incentives may take various forms, including grants, loan subsidies, and tax arrangements, and typically require us to achieve or maintain certain levels of investment, capital spending, employment, technology deployment, or research and development activities to qualify for such incentives or could restrict us from undertaking certain activities.
Our future business plans are impacted by obtaining these government incentives, which may take various forms, including grants, subsidies, loans, and tax arrangements, and typically require us to achieve or maintain certain levels of investment, capital spending, employment, technology deployment or development milestones, construction or production milestones, or research and development activities to qualify for such incentives or could restrict us from undertaking certain activities.
Even if we are successful in selling system-level solutions to our customers in sufficient volume, we may be unable to generate sufficient profit if our per-unit manufacturing costs are not offset by higher per-unit selling prices.
Manufacturing system-level solutions, such as SSDs, managed NAND, and HBM, typically results in higher per-unit manufacturing costs as compared to other products. Even if we are successful in selling system-level solutions to our customers in sufficient volume, we may be unable to generate sufficient profit if our per-unit manufacturing costs are not offset by higher per-unit selling prices.
Exchange rates for the U.S. dollar that adversely change against our foreign currency exposures could have a material adverse effect on our business, results of operations, or financial condition. 38 Table of Contents We are subject to counterparty default risks.
Exchange rates for the U.S. dollar that adversely change against our foreign currency exposures could have a material adverse effect on our business, results of operations, or financial condition. We are subject to counterparty default risks. We have numerous arrangements with financial institutions that subject us to counterparty default risks, including cash deposits, investments, and derivative instruments.
We also manage and store various proprietary information and sensitive or confidential data relating to our operations. In addition, we process, store, and transmit large amounts of data relating to our customers and employees, including sensitive personal information.
We maintain a system of controls over the physical security of our facilities. We also manage and store various proprietary information and sensitive or confidential data relating to our operations. In addition, we process, store, and transmit data relating to our customers and employees, including sensitive personal information.
Management’s Discussion and Analysis of Financial Condition and Results of Operations – Overview.” In addition, we may in the future enter into other restructure initiatives in order to, among other items, streamline our operations, respond to changes in business conditions, our markets, or product offerings, or to centralize certain key functions.
From time to time, we have because of the nature of our business, and may in the future, enter into restructure initiatives in order to, among other items, streamline our operations, respond to changes in business conditions, our markets, or product offerings, or to centralize certain key functions.
A majority of our DRAM production output in 2023 was from our fabrication facilities in Taiwan and any loss of output could have a material adverse effect on us.
Political, economic, or other actions may adversely affect our operations in Taiwan. A majority of our DRAM production output in 2024 was from our fabrication facilities in Taiwan, and any loss of output could have a material adverse effect on us.
Our failure to cost-effectively manufacture system-level solutions and/or controller, hardware design, and firmware in a timely manner may result in reduced demand for our system-level products and could have a material adverse effect on our business, results of operations, or financial condition.
Our failure to cost-effectively manufacture system-level solutions and/or controller, hardware design, and firmware in a timely manner may result in reduced demand for our system-level products and could have a material adverse effect on our business, results of operations, or financial condition. 30 Table of Contents Products that fail to meet specifications, are defective, or are otherwise incompatible with end uses could impose significant costs on us.
We are increasingly differentiating our products and solutions to meet the specific demands of our customers, which increases our reliance on our customers’ ability to accurately forecast the needs and preferences of their customers. As a result, our product demand forecasts may be impacted significantly by the strategic actions of our customers.
We are increasingly differentiating our products and solutions to meet the specific demands of our customers, which increases our reliance on our customers’ ability to accurately forecast the needs and preferences of their customers.
We, our officers, or our directors could also be subject to claims of alleged violations of securities laws. There can be no assurance that we are adequately insured to protect against all claims and potential liabilities, and we may elect to self-insure with respect to certain matters.
Further, there can be no assurance that we are adequately insured to protect against all claims and potential liabilities, and we may elect to self-insure with respect to certain matters.
The amount, frequency, and execution of our share repurchases pursuant to our share repurchase authorization may fluctuate based on our operating results, cash flows, and priorities for the use of cash for other purposes. Our expenditures for share repurchases were $425 million in 2023, $2.43 billion in 2022, $1.20 billion in 2021.
The amount, frequency, and execution of our share repurchases pursuant to our share repurchase authorization may fluctuate based on our operating results, cash flows, and priorities for the use of cash for other purposes.
There can be no assurance that we will declare cash dividends in the future in any particular amounts, or at all. 39 | 2023 10-K Table of Contents Future dividends, if any, and their timing and amount, may be affected by, among other factors: our financial condition, results of operations, capital requirements, business conditions, debt service obligations, contractual restrictions, industry practice, legal requirements, regulatory constraints, and other factors that our Board of Directors may deem relevant.
Future dividends, if any, and their timing and amount, may be affected by, among other factors: our financial condition, results of operations, capital requirements, business conditions, debt service obligations, contractual restrictions, industry practice, legal requirements, regulatory constraints, and other factors that our Board of Directors may deem relevant.
Delays in completion and ramping of new production facilities, or failure to optimize our investment choices, could significantly impact our ability to realize expected returns on our capital expenditures. Any of the above factors could have a material adverse effect on our business, results of operations, or financial condition.
Delays in completion and ramping of new production facilities, or failure to optimize our investment choices, could significantly impact our ability to realize expected returns on our capital expenditures.
Our inability to replace suppliers we have removed in a timely or cost-effective manner or comply with customers’ responsible sourcing requirements or with any related regulations could have a material adverse effect on our business, results of operations, or financial condition.
Our inability to replace suppliers we have removed in a timely or cost-effective manner or comply with customers’ responsible sourcing requirements or with any related regulations could have a material adverse effect on our business, results of operations, or financial condition. 33 | 2024 10-K Table of Contents Failure to meet environmental, social, and governance expectations or standards or achieve our related goals could adversely affect our business, results of operations, financial condition, or stock price.
Our long-term ability to sell system-level memory and storage products is reliant upon our customers’ ability to create, market, and sell their products containing our system-level solutions at sufficient volumes and prices in a timely manner.
Our long-term ability to sell system-level memory and storage products is reliant upon our customers’ ability to create, market, and sell their products containing our system-level solutions at sufficient volumes and prices in a timely manner. If we fail to successfully develop and market system-level products, our business, results of operations, or financial condition may be materially adversely affected.
As a result, lower utilization, lower wafer output, and corresponding increases in our per gigabit manufacturing costs have resulted in higher inventory carrying costs, and have had, and may continue to have, an adverse effect on our gross margins, business, results of operations, or financial condition. 22 Table of Contents We have a broad portfolio of products to address our customers’ needs, which span multiple market segments and are subject to rapid technological changes.
As a result, lower utilization, lower wafer output, and corresponding increases in our per gigabit manufacturing costs could result in higher inventory carrying costs, and have had, and may continue to have, an adverse effect on our gross margins, business, results of operations, or financial condition.
We have numerous arrangements with financial institutions that subject us to counterparty default risks, including cash deposits, investments, and derivative instruments. Additionally, we are subject to counterparty default risk from our customers for amounts receivable from them. As a result, we are subject to the risk that the counterparty will default on its performance obligations.
Additionally, we are subject to counterparty default risk from our customers for amounts receivable from them. As a result, we are subject to the risk that the counterparty will default on its performance obligations.
Our inability to attract, retain, and motivate executives and other employees or effectively manage succession of key roles may inhibit our ability to maintain or expand our business operations. 31 | 2023 10-K Table of Contents Compliance with responsible sourcing requirements and any related regulations could increase our operating costs, or limit the supply and increase the cost of certain materials, supplies, and services, and if we fail to comply, customers may reduce purchases from us or disqualify us as a supplier.
Compliance with responsible sourcing requirements and any related regulations could increase our operating costs or limit the supply and increase the cost of certain materials, supplies, and services, and if we fail to comply, customers may reduce purchases from us or disqualify us as a supplier.
Our products are also targets for cyberattacks, including those products utilized in cloud-based environments. While some of our products contain encryption or security algorithms to protect third-party content or user-generated data stored on our products, these products could still be hacked or the encryption schemes could be compromised, breached, or circumvented by motivated and sophisticated attackers.
While some of our products contain encryption, security algorithms, or features designed to help protect third-party content, user-generated data stored on our products, or the functionality of our products as intended, systems and applications that utilize these products could still be hacked or the encryption schemes could be compromised, breached, or circumvented by motivated and sophisticated attackers.
In addition, due to the customized nature of certain products we manufacture, we may be unable to sell certain finished goods inventories to alternative customers or manufacture in-process inventory to different specifications, which may result in excess and obsolescence charges in future periods.
In addition, due to the customized nature of certain products we manufacture, we may be unable to sell certain finished goods inventories to alternative customers or manufacture in-process inventory to different specifications, which may result in excess and obsolescence charges in future periods. 22 Table of Contents In addition, if we are unable to supply products that meet customer design and performance specifications, we may be required to sell such products at lower average selling prices, which may reduce our gross margins.
Further, our products contain sophisticated hardware and firmware and applications that may contain security vulnerabilities or defects in design or manufacture, including “bugs” and other problems that could interfere with the intended operation of our products.
Further, our products contain sophisticated hardware, firmware and software (some of which is provided by third parties) that may contain weaknesses or defects in design or manufacture, including “bugs” and other problems that could interfere with the intended operation of our products or be potentially exploited by such attackers.
We face geopolitical and other risks associated with our international operations that could materially adversely affect our business, results of operations, or financial condition. In addition to our U.S. operations, a substantial portion of our operations are conducted in Taiwan, Singapore, Japan, Malaysia, China, and India, and many of our customers, suppliers, and vendors also operate internationally.
In addition to our U.S. operations, a substantial portion of our operations are conducted in Taiwan, Singapore, Japan, Malaysia, China, and India, and many of our customers, suppliers, and vendors also operate internationally.
Any of the foregoing items could have a material adverse effect on our business, results of operations, or financial condition. 30 Table of Contents Breaches of our security systems or products, or those of our customers, suppliers, or business partners, could expose us to losses. We maintain a system of controls over the physical security of our facilities.
Any of the foregoing items could have a material adverse effect on our business, results of operations, or financial condition. 31 | 2024 10-K Table of Contents Breaches of our security systems or products, systems failures, interruptions, delays in service, catastrophic events, and resulting interruptions in the availability of our systems or those of our customers, suppliers, or business partners, could expose us to losses.
Additionally, some actors are using artificial intelligence technology to launch more automated, targeted and coordinated attacks. Globally, cyberattacks are increasing in number and the attackers are increasingly organized and well-financed, or supported by state actors, and are developing increasingly sophisticated systems to not only attack, but also to evade detection.
The emergence and maturation of AI capabilities may also lead to new and/or more sophisticated methods of attack. Globally, cyberattacks are increasing in number and the attackers are increasingly organized and well-financed, or supported by state actors, and are developing increasingly sophisticated systems to not only attack, but also to evade detection.
The manufacture of our products requires the use of facilities, equipment, chemicals, and materials that are subject to a broad array of laws and regulations in numerous jurisdictions in which we operate. Additionally, we are subject to a variety of other laws and regulations relative to the construction, maintenance, and operations of our facilities.
The manufacture of our products requires the use of facilities, equipment, chemicals, and materials that are subject to a broad array of laws and regulations in numerous jurisdictions in which we operate. This includes increasing regulations on a class of chemicals known as per- and polyfluoroalkyl substances (PFAS).
As a result of the necessary interdependence within our network of manufacturing facilities, an operational disruption at one of our or a subcontractor’s facilities may have a disproportionate impact on our ability to produce many of our products. 28 Table of Contents From time to time, there have been disruptions in our manufacturing operations as a result of power outages, improperly functioning equipment, disruptions in supply of raw materials or components, or equipment failures.
As a result of the necessary interdependence within our network of manufacturing facilities, an operational disruption at one of our or a subcontractor’s facilities may have a disproportionate impact on our ability to produce many of our products.
The declaration and payment of any dividend is subject to the approval of our Board of Directors and our dividend may be discontinued or reduced at any time.
Our Board of Directors has adopted a dividend policy pursuant to which we currently pay a cash dividend on our common shares on a quarterly basis. The declaration and payment of any dividend is subject to the approval of our Board of Directors and our dividend may be discontinued or reduced at any time.
Our manufacturing costs on a per gigabit basis vary across our portfolio as they are largely influenced by the technology node in which the solution was developed.
We have a broad portfolio of products to address our customers’ needs, which span multiple market segments and are subject to rapid technological changes. Our manufacturing costs on a per gigabit basis vary across our portfolio as they are largely influenced by the technology node in which the solution was developed.
Additionally, events and circumstances may occur which would cause us to not be able to satisfy applicable draw-down conditions and utilize our Revolving Credit Facility. In light of industry conditions, in 2023, we amended the financial covenants in our Revolving Credit Facility and term loan agreements. See “Part II – Item 7.
Additionally, events and circumstances may occur which would cause us to not be able to satisfy applicable draw-down conditions and utilize our Revolving Credit Facility.
If we or our customers, suppliers, or vendors are impacted by any of these risks, it could have a material adverse effect on our business, results of operations, or financial condition. 23 | 2023 10-K Table of Contents Following the May 21, 2023 decision of its cybersecurity review of our products sold in China, the CAC determined that critical information infrastructure operators in China may not purchase Micron products, impacting our revenue with companies headquartered in mainland China and Hong Kong, including direct sales as well as indirect sales through distributors.
Following the May 2023 decision of its cybersecurity review of our products sold in China, the CAC determined that critical information infrastructure operators in China may not purchase Micron products, impacting our revenue with companies headquartered in mainland China and Hong Kong, including direct sales as well as indirect sales through distributors.
At times, we experience higher levels of attrition, increasing compensation costs, and more intense competition for talent across our industry. To the extent we experience significant attrition and are unable to timely replace employees, we could experience a loss of critical skills and reduced employee morale, potentially resulting in business disruptions or increased expenses to address any disruptions.
To the extent we experience significant attrition and are unable to timely replace employees, we could experience a loss of critical skills and reduced employee morale, potentially resulting in business disruptions, inefficiencies during transitional periods and increased expenses.
Exposures to various legal proceedings and claims could lead to significant costs and expenses as we defend claims, are required to pay damage awards, or enter into settlement agreements, any of which could have a material adverse effect on our business, results of operations, or financial condition. 34 Table of Contents Claims that our products or manufacturing processes infringe or otherwise violate the intellectual property rights of others, or failure to obtain or renew license agreements covering such intellectual property, could materially adversely affect our business, results of operations, or financial condition.
Exposures to various legal proceedings and claims, with or without merit, could require significant attention from our management and could lead to significant costs and expenses as we defend claims, are required to pay damage awards, or enter into settlement agreements, any of which could have a material adverse effect on our business, results of operations, or financial condition.
We estimate capital expenditures in 2024 for property, plant, and equipment, net of partner contributions, to be slightly above $7 billion. In the past, we have utilized external sources of financing when needed.
We estimate capital expenditures in 2025 for property, plant, and equipment, net of proceeds from government incentives, to be around mid-30% range of revenue for the year. In the past, we have utilized external sources of financing when needed.
The disruption of our supply of materials, components, or services, or the extension of our lead times could have a material adverse effect on our business, results of operations, or financial condition. 27 | 2023 10-K Table of Contents Our operations are dependent on our ability to procure advanced semiconductor manufacturing equipment that enables the transition to lower cost manufacturing processes.
Any power shortages, capacity constraints, prolonged outages, or significant or unexpected increases in the cost of power could have a material adverse effect on our business, results of operations, or financial condition. Our operations are dependent on our ability to procure advanced semiconductor manufacturing equipment that enables the transition to lower cost manufacturing processes.
The incentives we receive could be subject to reduction, termination, or clawback, and any decrease or clawback of government incentives could have a material adverse effect on our business, results of operations, or financial condition. 26 Table of Contents Our business, results of operations, or financial condition could be adversely affected by the availability and quality of materials, supplies, and capital equipment, or dependency on third-party service providers.
Our business, results of operations, or financial condition could be adversely affected by the availability and quality of materials, supplies, electrical power, water, and capital equipment, or dependency on third-party service providers.

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Item 2. Properties

Properties — owned and leased real estate

9 edited+4 added−1 removed2 unchanged
We also intend to build a new assembly and test facility in Gujarat, India to address demand in the latter half of this decade. We do not identify or allocate assets by operating segment, other than goodwill. For a breakout of the carrying value of our long-lived assets by geographic area see “Part II – Item 8.
Construction is also progressing for the assembly and test facility in Gujarat, India to address demand in the latter half of this decade. We do not identify or allocate assets by operating segment, other than goodwill. For a breakout of the carrying value of our long-lived assets by geographic area see “Part II – Item 8.
Following the enactment of the CHIPS Act in 2022, we announced plans to invest in two leading-edge memory manufacturing fabs in the United States, contingent on CHIPS Act support through grants and investment tax credits. As part of this plan, in September 2022, we broke ground on a leading-edge memory manufacturing fab in Boise, Idaho.
CHIPS and Science Act of 2022 (“CHIPS Act”), we announced plans to invest in two leading-edge memory manufacturing fab facilities in the United States, based on CHIPS Act support through grants and investment tax credits. As part of this plan, in September 2022, we broke ground on a leading-edge memory manufacturing fab in Boise, Idaho.
The following is a summary of our principal facilities as of August 31, 2023: Location Principal Operations Taiwan R&D, wafer fabrication, component assembly and test, module assembly and test Singapore R&D, wafer fabrication, component assembly and test, module assembly and test Japan R&D, wafer fabrication United States R&D, wafer fabrication, reticle manufacturing Malaysia Component assembly and test, module assembly and test China Component assembly and test, module assembly and test We believe that our existing facilities are suitable and adequate for our present purposes.
The following is a summary of our principal facilities as of August 29, 2024: Location Principal Operations Taiwan R&D, wafer fabrication, component assembly and test, module assembly and test Singapore R&D, wafer fabrication, component assembly and test, module assembly and test Japan R&D, wafer fabrication United States R&D, wafer fabrication, reticle manufacturing Malaysia Component assembly and test, module assembly and test China Component assembly and test, module assembly and test India Component assembly and test, module assembly and test 43 | 2024 10-K Table of Contents We believe that our existing facilities are suitable and adequate for our present purposes.
We generally utilize all of our manufacturing capacity; however, a portion of our facilities were underutilized for 2023 due to industry conditions. See “Part II – Item 7.
We generally utilize all of our manufacturing capacity; however, a portion of our facilities were underutilized for 2024 and 2023 due to industry conditions. See “Part II – Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Overview – Industry Conditions” for information regarding our current underutilization.
We intend to make investments at our backend facility in Xi’an, China, including a new building to provide space to add more product capability, to allow us over time to serve more of the demand from our customers in China from the Xi’an facility.
We have started construction to expand our existing assembly and test facility in Xi’an, China, to provide space to add more product capability, to allow us over time to serve more of the demand from our customers in China.
Construction of the fab began in October 2023 with DRAM production targeted to start in calendar 2025 and first output in early calendar 2026. In addition, in October 2022, we announced plans to build a second leading-edge DRAM manufacturing fab in Clay, New York.
Construction of the fab began in October 2023, with meaningful DRAM output projected in 2027. In addition, in October 2022, we announced plans to build a second leading-edge DRAM manufacturing facility, consisting of up to four fabs to be built over the next 20-plus years, in Clay, New York.
We are also advancing our global back-end assembly and test network in order to support our product portfolio and extend our ability to deliver on global customer demand in the future.
Additionally, we began enablement of cleanroom space within our existing manufacturing fab in Hiroshima, Japan, that will support production of DRAM using EUV lithography. We also continue to advance our global back-end assembly and test network in order to support our product portfolio and extend our ability to deliver on global customer demand in the future.
We expect construction to begin in calendar 2024, with production anticipated to ramp in the latter half of the decade. We expect these new fabs to fulfill our requirements for additional wafer capacity starting in the second half of the decade and beyond, in line with industry demand trends.
We expect these new fabs to be key to meeting our requirements for additional wafer capacity starting in the second half of the decade and beyond, in line with industry demand trends and to maintain an objective of stable bit share. We have signed a non-binding preliminary memorandum of terms with the U.S.
Management’s Discussion and Analysis of Financial Condition and Results of Operations – Overview – Industry Conditions” for information regarding our current underutilization. 40 Table of Contents To support expected memory demand in the second half of the decade, we will need to add new DRAM wafer capacity.
To support projected memory demand in the second half of the decade, we will need to add new DRAM wafer capacity. Following the enactment of the U.S.
Removed
On August 21, 2023 we announced that two of our subsidiaries had each submitted full applications on August 18, 2023 for federal funding in the form of grants under the CHIPS Act for both of these projects.
Added
We expect construction site preparation to begin in calendar 2025, with production anticipated to ramp in the latter half of the decade.
Added
Department of Commerce for up to $6.1 billion in direct funding under the CHIPS Act for our planned fab in Boise, Idaho and the first two planned fabs in Clay, New York. We are also eligible for federal loans up to $7.5 billion.
Added
In addition, we receive a 25% investment tax credit on qualified investments in U.S. semiconductor manufacturing under the CHIPS Act.
Added
We have also signed a non-binding term sheet with the state of New York that provides up to $5.5 billion in funding for the planned four-fab facility over the next 20-plus years through a combination of tax credits for qualified capital investments and incentives for eligible new job wages.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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SEC regulations require disclosure of certain proceedings related to environmental matters unless we reasonably believe that the related monetary sanctions, if any, will be less than a specified threshold. We use a threshold of $1 million for this purpose. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. PART II
SEC regulations require disclosure of certain proceedings related to environmental matters unless we reasonably believe that the related monetary sanctions, if any, will be less than a specified threshold. We use a threshold of $1 million for this purpose.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Note: Management cautions that the stock price performance information shown in the graph above may not be indicative of current stock price levels or future stock price performance. The performance graph above assumes $100 was invested on August 31, 2018 in common stock of Micron Technology, Inc., the S&P 500 Composite Index, and the Philadelphia Semiconductor Index (SOX).
Note: Management cautions that the stock price performance information shown in the graph above may not be indicative of current stock price levels or future stock price performance. The performance graph above assumes $100 was invested on August 31, 2019 in common stock of Micron Technology, Inc., the S&P 500 Composite Index, and the Philadelphia Semiconductor Index (SOX).
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock is listed on The Nasdaq Global Select Market under the trading symbol “MU.” Holders of Record As of September 29, 2023, there were approximately 1,719 shareholders of record of our common stock.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock is listed on The Nasdaq Global Select Market under the trading symbol “MU.” Holders of Record As of September 27, 2024, there were approximately 1,636 shareholders of record of our common stock.
The repurchase authorization has no expiration date, does not obligate us to acquire any common stock, and is subject to market conditions and our ongoing determination of the best use of available cash.
The repurchase authorization has no expiration date, does not obligate us to acquire any common stock, and is subject to market conditions and our ongoing determination of the best use of available cash. As of August 29, 2024, $2.81 billion of the authorization remained available for the repurchase of our common stock.
We operate on a 52 or 53-week fiscal year which ends on the Thursday closest to August 31. Accordingly, the last day of our fiscal year varies. For consistent presentation and comparison to the industry indices shown herein, we have calculated our stock performance graph assuming an August 31 year end.
Accordingly, the last day of our fiscal year varies. For consistent presentation and comparison to the industry indices shown herein, we have calculated our stock performance graph assuming an August 31 year end.
We currently expect quarterly dividends to continue in future periods and aim to grow our dividend payments over time. However, the declaration and payment of any future cash dividends are at the discretion and subject to the approval of our Board of Directors.
However, the declaration and payment of any future cash dividends are at the discretion and subject to the approval of our Board of Directors.
Shares of common stock withheld as payment of withholding taxes and exercise prices in connection with the vesting or exercise of equity awards are also treated as common stock repurchases.
Shares of common stock withheld as payment of withholding taxes upon the vesting of restricted stock are also treated as common stock repurchases.
Those withheld shares of common stock are not required to be disclosed under Item 703 of Regulation S-K and accordingly are excluded from this Item 5. 42 Table of Contents Performance Graph The following graph illustrates a five-year comparison of cumulative total returns for our common stock, the S&P 500 Composite Index, and the Philadelphia Semiconductor Index (SOX) from August 31, 2018, through August 31, 2023.
Performance Graph The following graph illustrates a five-year comparison of cumulative total returns for our common stock, the S&P 500 Composite Index, and the Philadelphia Semiconductor Index (SOX) from August 31, 2019, through August 31, 2024. We operate on a 52 or 53-week fiscal year which ends on the Thursday closest to August 31.
A substantially greater number of holders of our common stock are "street name" or beneficial holders, whose shares are held of record by banks, brokers, and other financial institutions. 41 | 2023 10-K Table of Contents Dividends On September 27, 2023, our Board of Directors declared a quarterly dividend of $0.115 per share, payable in cash on October 25, 2023, to shareholders of record as of the close of business on October 10, 2023.
A substantially greater number of holders of our common stock are "street name" or beneficial holders, whose shares are held of record by banks, brokers, and other financial institutions.
The performance was plotted using the following data: 2018 2019 2020 2021 2022 2023 Micron Technology, Inc. $ 100 $ 86 $ 87 $ 140 $ 108 $ 135 S&P 500 Composite Index 100 103 125 165 146 169 Philadelphia Semiconductor Index (SOX) 100 110 168 257 204 283
The performance was plotted using the following data: 2019 2020 2021 2022 2023 2024 Micron Technology, Inc. $ 100 $ 101 $ 163 $ 126 $ 157 $ 217 S&P 500 Composite Index 100 122 160 142 165 209 Philadelphia Semiconductor Index (SOX) 100 153 234 186 258 367 ITEM 6. [RESERVED] 46 Table of Contents
Removed
Equity Compensation Plan Information The information required by this item is incorporated by reference from the information to be included in our 2023 Proxy Statement under the section entitled “Equity Compensation Plan Information,” which will be filed with the SEC within 120 days after August 31, 2023.
Added
Dividends On September 25, 2024, our Board of Directors declared a quarterly dividend of $0.115 per share, payable in cash on October 23, 2024, to shareholders of record as of the close of business on October 7, 2024. We currently expect quarterly dividends to continue in future periods and aim to grow our dividend payments over time.
Removed
During the quarter ended August 31, 2023, we did not repurchase any common stock under the authorization and as of August 31, 2023, $3.11 billion of the authorization remained available for the repurchase of our common stock.
Added
Shares withheld as payment of withholding taxes upon the vesting of restricted stock units are not considered repurchases for purposes of this Item and are not required to be reported. 45 | 2024 10-K Table of Contents In the fourth quarter of 2024, shares purchased under the authorization and shares withheld as payment upon the vesting of restricted stock consisted of the following: Period Total number of shares purchased (1) Average price paid per share Total number of shares purchased as part of publicly announced plans or programs Approximate dollar value of shares that may yet be purchased under publicly announced plans or programs (in millions) May 31, 2024 – June 27, 2024 — $ — — June 28, 2024 – July 25, 2024 25,931 133.55 — July 26, 2024 – August 29, 2024 3,223,518 93.07 3,223,518 3,249,449 $ 93.39 3,223,518 $2,806 (1) Includes 25,931 shares withheld as payment of withholding taxes upon the vesting of restricted stock awards.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Financing Activities: For 2023, net cash provided by financing activities consisted primarily of $3.20 billion of proceeds from our 2025, 2026, and 2027 Term Loan A borrowings, $1.27 billion from the issuance of the 2029 B Notes, $896 million from the issuance of the 2033 B Notes, $749 million from the issuance of the 2033 A Notes, and $599 million from the issuance of the 2028 Notes.
For 2023, net cash provided by financing activities consisted primarily of $3.20 billion of proceeds from our 2025, 2026, and 2027 Term Loan A borrowings; $1.27 billion from the issuance of the 2029 B Notes; $896 million from the issuance of the 2033 B Notes; $749 million from the issuance of the 2033 A Notes; and $599 million from the issuance of the 2028 Notes.
GAAP, which requires the assessment of our performance and other relevant factors. Realization of deferred tax assets is dependent on our ability to generate future taxable income. Our income tax provision or benefit is dependent, in part, on our ability to forecast future taxable income in Japan, Malaysia, the United States, Taiwan, and other jurisdictions.
GAAP, which requires the assessment of our performance and other relevant factors. Realization of deferred tax assets is dependent on our ability to generate future taxable income. Our income tax provision or benefit is dependent, in part, on our ability to forecast future taxable income in Japan, the United States, Malaysia, Taiwan, and other jurisdictions.
For reporting units for which this assessment concludes that it is more likely than not that the fair value is more than its carrying value, goodwill is considered not impaired, and we are not required to perform the goodwill impairment test.
For reporting units for which this assessment concludes that it is more likely than not that the fair value is more than its carrying value, goodwill is considered not impaired, and we are not required to perform the quantitative goodwill impairment test.
As charges to write down inventories are recorded in advance of when inventories are sold, costs of goods sold in subsequent periods are lower than they otherwise would be.
As charges to write down inventories are recorded in advance of when inventories are sold, costs of goods sold in subsequent periods were lower than they otherwise would be.
Our fiscal year is the 52 or 53-week period ending on the Thursday closest to August 31. Fiscal 2023, 2022, and 2021 each contained 52 weeks. All tabular dollar amounts are in millions, except per share amounts. Overview For an overview of our business, see “Part I – Item 1.
Our fiscal year is the 52 or 53-week period ending on the Thursday closest to August 31. Fiscal 2024, 2023, and 2022 each contained 52 weeks. All tabular dollar amounts are in millions, except per share amounts. Overview For an overview of our business, see “Part I – Item 1.
The decrease in cash provided by operating activities for 2023 as compared to 2022 was primarily due to a net loss in the current year adjusted for non-cash items and the effect of an increase in inventories and a decline in accounts payable and accrued expenses, partially offset by a decrease in receivables.
The decrease in cash provided by operating activities for 2023 as compared to 2022 was primarily due to a net loss in 2023 adjusted for non-cash items and the effect of an increase in inventories and a decline in accounts payable and accrued expenses, partially offset by a decrease in receivables.
Total revenue for 2023 decreased 49% as compared to 2022 primarily due to decreases in sales of both DRAM and NAND products. • Sales of DRAM products decreased 51% primarily due to a high-40s percent range decline in average selling prices and decreases in bit shipments in the high-single-digit percent range. • Sales of NAND products decreased 46% primarily due to a low-50s percent range decline in average selling prices partially offset by increases in bit shipments in the high-single-digit percent range.
Total revenue for 2023 decreased 49% as compared to 2022 primarily due to decreases in sales of both DRAM and NAND products. • Sales of DRAM products decreased 51% primarily due to a high-40% range decline in average selling prices and decreases in bit shipments in the high-single-digit percent range. • Sales of NAND products decreased 46% primarily due to a low-50% range decline in average selling prices partially offset by increases in bit shipments in the high-single-digit percent range.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This discussion should be read in conjunction with the consolidated financial statements and accompanying notes for the year ended August 31, 2023. All period references are to our fiscal periods unless otherwise indicated.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This discussion should be read in conjunction with the consolidated financial statements and accompanying notes for the year ended August 29, 2024. All period references are to our fiscal periods unless otherwise indicated.
We expect that our cash and investments, cash flows from operations, and available financing will be sufficient to meet our requirements at least through the next 12 months and thereafter for the foreseeable future.
We expect that our cash and investments, cash flows from operations, expected funding from government incentives, and available financing will be sufficient to meet our requirements at least through the next 12 months and thereafter for the foreseeable future.
The repurchase authorization has no expiration date, does not obligate us to acquire any common stock, and is subject to market conditions and our ongoing determination of the best use of available cash. Through August 31, 2023, we had repurchased an aggregate of $6.89 billion of the authorized amount. See “Item 8.
The repurchase authorization has no expiration date, does not obligate us to acquire any common stock, and is subject to market conditions and our ongoing determination of the best use of available cash. Through August 29, 2024, we had repurchased an aggregate of $7.19 billion of the authorized amount. See “Item 8.
We use the expected value method, based on historical price adjustments and current pricing trends, to estimate the amount of revenue recognized from sales to distributors. Differences between the estimated and actual amounts are recognized as adjustments to revenue. Recently Adopted Accounting Standards No material items. Recently Issued Accounting Standards No material items.
We use the expected value method, based on historical price adjustments and current pricing trends, to estimate the amount of revenue recognized from sales to distributors. Differences between the estimated and actual amounts are recognized as adjustments to revenue. Recently Issued Accounting Standards See “Item 8.
Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Leases,” “ – Debt,” and “ – Commitments.” To support expected memory demand in the second half of the decade, we will need to add new DRAM wafer capacity.
Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Leases,” “ – Debt,” and “ – Commitments.” To support projected memory demand in the second half of the decade, we will need to add new DRAM wafer capacity. Following the enactment of the U.S.
Cash Flows For the year ended 2023 2022 2021 Net cash provided by operating activities $ 1,559 $ 15,181 $ 12,468 Net cash provided by (used for) investing activities (6,191) (11,585) (10,589) Net cash provided by (used for) financing activities 4,983 (2,980) (1,781) Effect of changes in currency exchange rates on cash, cash equivalents, and restricted cash (34) (106) 41 Net increase (decrease) in cash, cash equivalents, and restricted cash $ 317 $ 510 $ 139 Operating Activities: Cash provided by operating activities reflects net income (loss) adjusted for certain non-cash items, including depreciation expense, amortization of intangible assets, inventory write-downs, asset impairments, and stock-based compensation, and the effects of changes in operating assets and liabilities.
Cash Flows For the year ended 2024 2023 2022 Net cash provided by operating activities $ 8,507 $ 1,559 $ 15,181 Net cash provided by (used for) investing activities (8,309) (6,191) (11,585) Net cash provided by (used for) financing activities (1,842) 4,983 (2,980) Effect of changes in currency exchange rates on cash, cash equivalents, and restricted cash 40 (34) (106) Net increase (decrease) in cash, cash equivalents, and restricted cash $ (1,604) $ 317 $ 510 Operating Activities: Cash provided by operating activities reflects net income (loss) adjusted for certain non-cash items, including depreciation expense, amortization of intangible assets, inventory write-downs, asset impairments, and stock-based compensation, and the effects of changes in operating assets and liabilities .
Following the enactment of the CHIPS Act in 2022, we announced plans to invest in two leading-edge memory manufacturing fabs in the United States, contingent on CHIPS Act support through grants and investment tax credits. As part of this plan, in September 2022, we broke ground on a leading-edge memory manufacturing fab in Boise, Idaho.
CHIPS and Science Act of 2022 (“CHIPS Act”), we announced plans to invest in two leading-edge memory manufacturing fab facilities in the United States, based on CHIPS Act support through grants and investment tax credits. As part of this plan, in September 2022, we broke ground on a leading-edge memory manufacturing fab in Boise, Idaho.
Cash used for financing activities included $761 million for repayments of debt, $504 million for payments of dividends to shareholders, $425 million for the acquisition of 8.6 million shares of our common stock under our share repurchase authorization, and $138 million of payments on equipment purchase contracts. 51 | 2023 10-K Table of Contents For 2022, net cash used for financing activities included $2.43 billion for the acquisition of 35.4 million shares of our common stock under our share repurchase authorization, $2.03 billion of repayments of debt primarily to redeem the 2023 Notes and 2024 Notes, $461 million of cash payments of dividends to shareholders, and $141 million of payments on equipment purchase contracts.
For 2022, net cash used for financing activities included $2.43 billion for the acquisition of 35.4 million shares of our common stock under our share repurchase authorization; $2.03 billion of repayments of debt primarily to redeem the 2023 Notes and 2024 Notes; $461 million of cash payments of dividends to shareholders; and $141 million of payments on equipment purchase contracts.
Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Equity.” 50 Table of Contents On September 27, 2023, our Board of Directors declared a quarterly dividend of $0.115 per share, payable in cash on October 25, 2023, to shareholders of record as of the close of business on October 10, 2023.
Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Equity.” On September 25, 2024, our Board of Directors declared a quarterly dividend of $0.115 per share, payable in cash on October 23, 2024, to shareholders of record as of the close of business on October 7, 2024.
Cash generated from operations is highly dependent on selling prices for our products, which can vary significantly from period to period. Cash and marketable investments totaled $10.44 billion as of August 31, 2023, and $10.98 billion as of September 1, 2022.
Cash generated from operations is highly dependent on selling prices for our products, which can vary significantly from period to period. Cash and marketable investments totaled $9.15 billion as of August 29, 2024, and $10.44 billion as of August 31, 2023.
Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements”: • Lehi, Utah Fab and 3D XPoint • Goodwill • Equity Plans • Restructure and Asset Impairments • Other Operating (Income) Expense, Net • Other Non-Operating Income (Expense), Net • Income Taxes 49 | 2023 10-K Table of Contents Liquidity and Capital Resources Our primary sources of liquidity are cash generated from operations and financing obtained from capital markets and financial institutions.
Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements”: • Equity Compensation Plans • Restructure and Asset Impairments • Other Operating (Income) Expense, Net • Income Taxes 51 | 2024 10-K Table of Contents Liquidity and Capital Resources Our primary sources of liquidity are cash generated from operations and financing obtained from capital markets and financial institutions.
We recognized a charge of $101 million in 2023 to impair all of the goodwill assigned to our SBU reporting unit based on our quantitative assessment for impairment in the current year.
We recognized a charge of $101 million in 2023 to impair all of the goodwill assigned to our SBU reporting unit based on our quantitative assessment for impairment. We performed a qualitative assessment for the current year and have not identified any impairment indicators for our reporting units.
The amount of any inventory write-down can vary significantly depending on the determination of inventory categories. We review the major characteristics of product type and markets in determining the unit of account for which we perform the lower of cost or net realizable value analysis and categorize all inventories (including DRAM, NAND, and other memory) as a single group.
We review the major characteristics of product type and markets in determining the unit of account for which we perform the lower of cost or net realizable value analysis and categorize all inventories (including DRAM, NAND, and other memory) as a single group.
Income Taxes: Our income tax (provision) benefit consisted of the following: For the year ended 2023 2022 2021 Income (loss) before taxes $ (5,658) $ 9,571 $ 6,218 Income tax (provision) benefit (177) (888) (394) Effective tax rate (3.1) % 9.3 % 6.3 % The change in our effective tax rate for 2023 as compared to 2022 was primarily due to a pre-tax loss in 2023.
Income Taxes: Our income tax (provision) benefit consisted of the following: For the year ended 2024 2023 2022 Income (loss) before taxes $ 1,240 $ (5,658) $ 9,571 Income tax (provision) benefit (451) (177) (888) Effective tax rate 36.4 % (3.1) % 9.3 % The change in our effective tax rate for 2024 as compared to 2023 was primarily due to changes in profitability.
For 2022, net cash used for investing activities consisted primarily of $12.07 billion of expenditures for property, plant, and equipment; contributions of $115 million received from partners to offset capital expenditures; $888 million of net inflows from the sale of the Lehi, Utah fab; and $155 million of net outflows from purchases, sales, and maturities of available-for-sale securities.
For 2023, net cash used for investing activities consisted primarily of $7.68 billion of expenditures for property, plant, and equipment; partially offset by contributions of $710 million received from government incentives to offset capital expenditures; and $868 million of net inflows from maturities, sales, and purchases of available-for-sale securities. 53 | 2024 10-K Table of Contents For 2022, net cash used for investing activities consisted primarily of $12.07 billion of expenditures for property, plant, and equipment; partially offset by contributions of $115 million received from government incentives to offset capital expenditures; $888 million of net inflows from the sale of the Lehi, Utah fab; and $155 million of net outflows from purchases, maturities, and sales of available-for-sale securities.
Our consolidated gross margin percentage decreased to negative 9% for 2023 from 45% for 2022 primarily due to declines in average selling prices for both DRAM and NAND and charges to write down inventories (as detailed in “Inventory NRV write-downs” below), and $382 million of facility underutilization costs in 2023.
Our consolidated gross margin percentage decreased to negative 9% for 2023 from 45% for 2022 primarily due to declines in average selling prices for both DRAM and NAND, charges to write down inventories, and $382 million of facility underutilization costs in 2023. 48 Table of Contents Inventory NRV write-downs: Our consolidated gross margin was impacted by charges in 2023 to write down inventories to their estimated NRV as a result of declines in average selling prices for both DRAM and NAND.
Changes in revenue for each business unit for 2023 as compared to 2022 were as follows: • CNBU revenue decreased 58% primarily due to declines in average selling prices for DRAM and decreases in bit shipments. • MBU revenue decreased 50% primarily due to declines in average selling prices for both DRAM and NAND and decreases in NAND bit shipments. • EBU revenue decreased 31% primarily due to declines in average selling prices for both DRAM and NAND and decreases in bit shipments. • SBU revenue decreased 44% primarily due to declines in average selling prices for NAND partially offset by increases in bit shipments.
Changes in revenue for each business unit for 2024 as compared to 2023 were as follows: • CNBU revenue increased 67% driven by increases in bit shipments and DRAM average selling prices. • MBU revenue increased 75% primarily due to increases in average selling prices and bit shipments for both mobile DRAM and NAND. • EBU revenue increased 27% primarily due to increases in bit shipments, partially offset by declines in average selling prices. • SBU revenue increased 80% primarily due to increases in average selling prices and bit shipments.
As a result of a loss before taxes and geographical mix of income, the benefit from tax incentive arrangements was not material for 2023. The effect of tax incentive arrangements reduced our tax provision by $1.12 billion (benefiting our diluted earnings per share by $1.00) for 2022 and by $758 million ($0.66 per diluted share) for 2021.
As a result of the low level of profitability and jurisdictional mix of income, the benefit from tax incentive arrangements was not material for 2024 or 2023. The effect of tax incentive arrangements reduced our tax provision by $1.12 billion (benefiting our diluted earnings per share by $1.00) for 2022.
Actual amounts for 2024 will vary depending on market conditions. As of August 31, 2023, we had purchase obligations of approximately $915 million for the acquisition of property, plant, and equipment, of which approximately $812 million is expected to be paid within one year. For a description of other contractual obligations, such as leases, debt, and commitments, see “Item 8.
As of August 29, 2024, we had purchase obligations of approximately $1.17 billion for the acquisition of property, plant, and equipment, of which approximately $1.10 billion is expected to be paid within one year. For a description of other contractual obligations, such as leases, debt, and commitments, see “Item 8.
For 2021, net cash used for investing activities consisted primarily of $10.03 billion of expenditures for property, plant, and equipment, partially offset by contributions of $502 million received from partners to offset capital expenditures, and $1.06 billion of net outflows from purchases, sales, and maturities of available-for-sale securities.
Investing Activities: For 2024, net cash used for investing activi ties consisted primarily of $8.39 billion of expenditures for property, plant, and equipment; and $205 million of net outflows from purchases, maturities, and sales of available-for-sale securities; partially offset by contributions of $315 million received from government incentives to offset capital expenditures.
Interest income (expense) improved for 2022 as compared to 2021 primarily due to an increase of $59 million in interest income as a result of increases in interest rates on our cash and investments.
Interest income (expense) improved for 2023 as compared to 2022 primarily as a result of increases in interest income due to higher interest rates on our cash and investments, partially offset by increases in interest expense due to higher debt balances and interest rates on our debt.
Development of a product is deemed complete when it is qualified through internal reviews and tests for performance and reliability. R&D expenses can vary significantly depending on the timing of product qualification. R&D expenses for 2023 were relatively unchanged as compared to 2022 as decreases in employee compensation were offset by higher depreciation expense.
Development of a product is deemed complete when it is qualified through internal reviews and tests for performance and reliability. R&D expenses can vary significantly depending on the timing of product qualification.
Consolidated Gross Margin : Our consolidated gross margin has been adversely impacted by the factors described in the section titled “Industry Conditions” above.
Consolidated Gross Margin : Our consolidated gross margin has been impacted by the factors described in the section titled “Industry Conditions” above and inventory write-downs in 2023 as detailed in the table below.
Changes in revenue for each business unit for 2022 as compared to 2021 were as follows: • CNBU revenue increased 12% primarily due to increases in bit shipments to cloud, enterprise, and networking markets. • MBU revenue was relatively unchanged as both DRAM and NAND revenue was relatively flat. • EBU revenue increased 24% primarily due to strong demand growth in industrial and automotive markets. • SBU revenue increased 15% primarily due to higher average selling prices and increases in shipments of SSD products. 47 | 2023 10-K Table of Contents Operating Income (Loss) by Business Unit For the year ended 2023 2022 2021 CNBU $ (585) (10) % $ 5,844 43 % $ 4,295 35 % MBU (1,750) (48) % 2,160 30 % 2,173 30 % EBU 382 11 % 1,752 33 % 1,006 24 % SBU (1,887) (74) % 513 11 % 173 4 % All Other 8 80 % 12 71 % 20 50 % $ (3,832) $ 10,281 $ 7,667 Percentages reflect operating income (loss) as a percentage of revenue for each business unit.
Changes in revenue for each business unit for 2023 as compared to 2022 were as follows: • CNBU revenue decreased 58% primarily due to declines in average selling prices for DRAM and decreases in bit shipments. • MBU revenue decreased 50% primarily due to declines in average selling prices for both DRAM and NAND and decreases in NAND bit shipments. • EBU revenue decreased 31% primarily due to declines in average selling prices for both DRAM and NAND and decreases in bit shipments. • SBU revenue decreased 44% primarily due to declines in average selling prices for NAND partially offset by increases in bit shipments. 49 | 2024 10-K Table of Contents Operating Income (Loss) by Business Unit For the year ended 2024 2023 2022 CNBU $ 980 10 % $ (585) (10) % $ 5,844 43 % MBU 114 2 % (1,750) (48) % 2,160 30 % EBU 199 4 % 382 11 % 1,752 33 % SBU (362) (8) % (1,887) (74) % 513 11 % All Other 17 45 % 8 80 % 12 71 % $ 948 $ (3,832) $ 10,281 Percentages reflect operating income (loss) as a percentage of revenue for each business unit.
The quantitative assessment indicated that the fair value for all of our other reporting units substantially exceeded their carrying value. 52 Table of Contents Determining when to test for impairment, the reporting units, the assets and liabilities of the reporting unit, and the fair value of the reporting unit requires significant judgment and involves the use of significant estimates and assumptions.
Determining when to test for impairment, the reporting units, the assets and liabilities of the reporting unit, and the fair value of the reporting unit requires significant judgment and involves the use of significant estimates and assumptions.
Goodwill : We test goodwill for impairment in our fourth quarter each year, or more frequently if indicators of an impairment exist, to determine whether it is more likely than not that the fair value of the reporting unit with goodwill is less than its carrying value.
In accounting for the resolution of contingencies, significant judgment may be necessary to estimate amounts pertaining to periods prior to the resolution that are charged to operations in the period of resolution and amounts related to future periods. 54 Table of Contents Goodwill : We test goodwill for impairment in our fourth quarter each year, or more frequently if indicators of an impairment exist, to determine whether it is more likely than not that the fair value of the reporting unit with goodwill is less than its carrying value.
Despite a consolidated pre-tax loss on a worldwide basis, we have taxes payable in certain geographies due to minimum taxable income reportable in those geographies.
The change in our effective tax rate for 2023 as compared to 2022 was primarily due to a pre-tax loss in 2023. Despite a consolidated pre-tax loss on a worldwide basis in 2023, we had taxes payable in certain geographies due to minimum taxable income reportable in those geographies.
For example, a 5% decrease in future average selling prices would have changed the estimated net realizable value of our finished goods and work in process inventories by approximately $600 million as of August 31, 2023. U.S. GAAP provides for products to be grouped into categories in order to compare costs to net realizable values.
For example, a 5% decrease in future average selling prices would have changed the estimated net realizable value of our finished goods and work in process inventories by approximately $700 million as of August 29, 2024. 55 | 2024 10-K Table of Contents U.S.
We closed the sale of our Lehi facility to TI in 2022 for $893 million and disposed of $918 million of net assets, consisting primarily of property, plant, and equipment, resulting in a $23 million loss, net of selling expenses and other adjustments. 45 | 2023 10-K Table of Contents Results of Operations Consolidated Results For the year ended 2023 2022 2021 Revenue $ 15,540 100 % $ 30,758 100 % $ 27,705 100 % Cost of goods sold 16,956 109 % 16,860 55 % 17,282 62 % Gross margin (1,416) (9) % 13,898 45 % 10,423 38 % Research and development 3,114 20 % 3,116 10 % 2,663 10 % Selling, general, and administrative 920 6 % 1,066 3 % 894 3 % Restructure and asset impairments 171 1 % 48 — % 488 2 % Other operating (income) expense, net 124 1 % (34) — % 95 — % Operating income (loss) (5,745) (37) % 9,702 32 % 6,283 23 % Interest income (expense), net 80 1 % (93) — % (146) (1) % Other non-operating income (expense), net 7 — % (38) — % 81 — % Income tax (provision) benefit (177) (1) % (888) (3) % (394) (1) % Equity in net income (loss) of equity method investees 2 — % 4 — % 37 — % Net income (loss) $ (5,833) (38) % $ 8,687 28 % $ 5,861 21 % Total Revenue: Total revenue for 2023 was adversely impacted by the factors described in the section titled “Industry Conditions” above.
The 2023 Restructure Plan, which was substantially completed in 2023, yielded estimated cost savings of approximately $130 million per quarter (approximately 60% in cost of goods sold, 30% in R&D, and 10% in SG&A) subsequent to 2023. 47 | 2024 10-K Table of Contents Results of Operations Consolidated Results For the year ended 2024 2023 2022 Revenue $ 25,111 100 % $ 15,540 100 % $ 30,758 100 % Cost of goods sold 19,498 78 % 16,956 109 % 16,860 55 % Gross margin 5,613 22 % (1,416) (9) % 13,898 45 % Research and development 3,430 14 % 3,114 20 % 3,116 10 % Selling, general, and administrative 1,129 4 % 920 6 % 1,066 3 % Restructure and asset impairments 1 — % 171 1 % 48 — % Other operating (income) expense, net (251) (1) % 124 1 % (34) — % Operating income (loss) 1,304 5 % (5,745) (37) % 9,702 32 % Interest income (expense), net (33) — % 80 1 % (93) — % Other non-operating income (expense), net (31) — % 7 — % (38) — % Income tax (provision) benefit (451) (2) % (177) (1) % (888) (3) % Equity in net income (loss) of equity method investees (11) — % 2 — % 4 — % Net income (loss) $ 778 3 % $ (5,833) (38) % $ 8,687 28 % Total Revenue: Total revenue for 2024 and 2023 was impacted by the factors described in the section titled “Industry Conditions” above.
We intend to make investments at our backend facility in Xi’an, China, including a new building to provide space to add more product capability, to allow us over time to serve more of the demand from our customers in China from the Xi’an facility.
We have started construction to expand our existing assembly and test facility in Xi’an, China, to provide space to add more product capability, to allow us over time to serve more of the demand from our customers in China.
Changes in operating income or loss for each business unit for 2022 as compared to 2021 were as follows: • CNBU operating income increased primarily due to higher bit shipments and manufacturing cost reductions. • MBU operating income was relatively unchanged as slight increases in gross margins were offset by higher operating expenses. • EBU operating income increased primarily due to manufacturing cost reductions from an increasing mix of leading-edge bits, higher bit shipments, and improved DRAM pricing in industrial and consumer markets, partially offset by higher R&D expenses. • SBU operating income increased primarily due to improved product mix driving increases in average selling prices, increases in SSD shipments, and manufacturing cost reductions, partially offset by higher R&D expenses.
Changes in operating income or loss for each business unit for 2024 as compared to 2023 were as follows: • CNBU operating income (loss) improved primarily due to higher bit shipments, increases in average selling prices, and cost reductions, partially offset by higher R&D expenses. • MBU operating income (loss) improved primarily due to increases in average selling prices, higher bit shipments, and cost reductions. • EBU operating income decreased primarily due to declines in average selling prices, partially offset by higher bit shipments and cost reductions. • SBU operating income (loss) improved primarily due to increases in average selling prices, higher bit shipments, and cost reductions, partially offset by higher R&D expenses.
The increase in cash provided by operating activities for 2022 as compared to 2021 was primarily due to higher net income adjusted for non-cash items and the effect of lower receivables, partially offset by an increase in inventories.
The increase in cash provided by operating activities for 2024 as compared to 2023 was primarily due to net income in 2024 adjusted for non-cash items, the effect of an increase in accounts payable and accrued expenses and an increase in other current liabilities largely due to customer prepayments to secur e p roduct supply, partially offset by an increase in receivables.
Total revenue for 2022 increased 11% as compared to 2021 primarily due to increases in sales of both DRAM and NAND products. • Sales of DRAM products increased 12% primarily due to increases in bit shipments of slightly over 10%. • Sales of NAND products increased 11% primarily due to a high-single-digit percent increase in bit shipments and a low-single-digit percent increase in average selling prices.
Total revenue for 2024 increased 62% as compared to 2023 primarily due to increases in sales of both DRAM and NAND products. • Sales of DRAM products increased 60% primarily due to a mid-40% range increase in bit shipments and a low-teen percentage range increase in average selling prices. • Sales of NAND products increased 72% primarily due to a low-30% range increase in bit shipments and a low-30% percentage range increase in average selling prices.
Cash used for financing activities was partially offset by aggregate proceeds of $2.00 billion from the issuance of the unsecured 2032 Green Bonds, 2041 Notes, and 2051 Notes.
Cash used for financing activities was partially offset by aggregate proceeds of $2.00 billion from the issuance of the unsecured 2032 Green Bonds, 2041 Notes, and 2051 Notes. See “Item 8. Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Debt.” Critical Accounting Estimates The preparation of financial statements and related disclosures in conformity with U.S.
We also intend to build a new assembly and test facility in Gujarat, India to address demand in the latter half of this decade. Our Board of Directors has authorized the discretionary repurchase of up to $10 billion of our outstanding common stock through open-market purchases, block trades, privately-negotiated transactions, derivative transactions, and/or pursuant to Rule 10b5-1 trading plans.
Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Government Incentives.” 52 Table of Contents Our Board of Directors has authorized the discretionary repurchase of up to $10 billion of our outstanding common stock through open-market purchases, block trades, privately-negotiated transactions, derivative transactions, and/or pursuant to Rule 10b5-1 trading plans.
The estimate of future cash flows involves numerous assumptions which require significant judgment by us, including, but not limited to, future use of the assets for our operations versus sale or disposal of the assets, future selling prices for our products, and future production and sales volumes. 53 | 2023 10-K Table of Contents Revenue recognition : Revenue is primarily recognized at a point in time when control of the promised goods is transferred to our customers in an amount that reflects the consideration we expect to be entitled to in exchange for those goods.
The estimate of future cash flows involves numerous assumptions which require significant judgment by us, including, but not limited to, future use of the assets for our operations versus sale or disposal of the assets, future selling prices for our products, and future production and sales volumes.
Revenue by Business Unit For the year ended 2023 2022 2021 CNBU $ 5,710 37 % $ 13,693 45 % $ 12,280 44 % MBU 3,630 23 % 7,260 24 % 7,203 26 % EBU 3,637 23 % 5,235 17 % 4,209 15 % SBU 2,553 16 % 4,553 15 % 3,973 14 % All Other 10 — % 17 — % 40 — % $ 15,540 $ 30,758 $ 27,705 Percentages of total revenue may not total 100% due to rounding.
The impacts of inventory NRV write-downs are summarized below: For the year ended 2024 2023 2022 Provision to write down inventory to NRV $ — $ (1,831) $ — Lower costs from sale of inventory written down in prior periods 987 844 — $ 987 $ (987) $ — Revenue by Business Unit For the year ended 2024 2023 2022 CNBU $ 9,513 38 % $ 5,710 37 % $ 13,693 45 % MBU 6,354 25 % 3,630 23 % 7,260 24 % EBU 4,614 18 % 3,637 23 % 5,235 17 % SBU 4,592 18 % 2,553 16 % 4,553 15 % All Other 38 — % 10 — % 17 — % $ 25,111 $ 15,540 $ 30,758 Percentages of total revenue may not total 100% due to rounding.
Construction of the fab began in October 2023 with DRAM production targeted to start in calendar 2025 and first output in early calendar 2026. In addition, in October 2022, we announced plans to build a second leading-edge DRAM manufacturing fab in Clay, New York.
Construction of the fab began in October 2023, with meaningful DRAM output projected in 2027. In addition, in October 2022, we announced plans to build a second leading-edge DRAM manufacturing facility, consisting of up to four fabs to be built over the next 20-plus years, in Clay, New York.
We are also advancing our global back-end assembly and test network in order to support our product portfolio and extend our ability to deliver on global customer demand in the future.
Additionally, we began enablement of cleanroom space within our existing manufacturing fab in Hiroshima, Japan, that will support production of DRAM using EUV lithography. We also continue to advance our global back-end assembly and test network in order to support our product portfolio and extend our ability to deliver on global customer demand in the future.
As of August 31, 2023, $2.45 billion of our cash and marketable investments was held by our foreign subsidiaries. We continuously evaluate alternatives for efficiently funding our capital expenditures and ongoing operations. We expect, from time to time, to engage in a variety of financing transactions for such purposes, including the issuance of securities.
As of August 29, 2024, $3.34 billion of our cash and marketable investments was held by our foreign subsidiaries. We continuously evaluate alternatives for efficiently funding our capital expenditures and ongoing operations.
For 2021, net cash used for financing activities consisted primarily of $1.20 billion for the acquisition of 15.6 million shares of our common stock under our share repurchase authorization, $295 million of payments on equipment purchase contracts, $185 million of cash payments to settle conversions of our 2032D Notes, and $147 million of repayments of finance leases and other debt.
Cash used for financing activities included $761 million for repayments of debt; $504 million for payments of dividends to shareholders; $425 million for the acquisition of 8.6 million shares of our common stock under our share repurchase authorization; and $138 million of payments on equipment purchase contracts.
R&D expenses for 2022 increased 17% as compared to 2021 primarily due to higher employee compensation from increases in headcount, higher volumes of development and prequalification wafers, and higher depreciation expense. Selling, General, and Administrative: SG&A expenses for 2023 were 14% lower as compared to 2022 primarily due to decreases in employee compensation, legal fees, advertising, and professional services.
R&D expenses for 2024 increased 10% as compared to 2023 primarily due to an increase in employee compensation and higher volumes of development and prequalification wafers, partially offset by an increase in government incentives. R&D expenses for 2023 were relatively unchanged as compared to 2022 as decreases in employee compensation were offset by higher depreciation expense.
We expect construction to begin in calendar 2024, with production anticipated to ramp in the latter half of the decade. We expect these new fabs to fulfill our requirements for additional wafer capacity starting in the second half of the decade and beyond, in line with industry demand trends.
We expect these new fabs to be key to meeting our requirements for additional wafer capacity starting in the second half of the decade and beyond, in line with industry demand trends and to maintain an objective of stable bit share. We have signed a non-binding preliminary memorandum of terms with the U.S.
This led to significant reductions in average selling prices for both DRAM and NAND and bit shipments for DRAM, resulting in declines in revenue across all our business segments and nearly all our end markets. Due to the challenging pricing environment, we recognized charges of $1.83 billion in 2023 to write down inventories to their estimated net realizable value.
These conditions, which began in the fourth quarter of 2022 and persisted into early 2024, led to significant reductions in average selling prices for both DRAM and NAND and reductions in bit shipments for DRAM. We experienced declines in revenue across all our business segments and nearly all our end markets throughout 2023.
To develop new product and process technology, support future growth, achieve operating efficiencies, and maintain product quality, we must continue to invest in manufacturing technologies, facilities and equipment, and R&D. We estimate capital expenditures in 2024 for property, plant, and equipment, net of partner contributions, to be slightly above $7 billion.
Funding of certain significant capital projects is also dependent on the receipt of government incentives, which are subject to conditions and may not be obtained. To develop new product and process technology, support future growth, achieve operating efficiencies, and maintain product quality, we must continue to invest in manufacturing technologies, facilities and equipment, and R&D.
We recognized period costs from fabrication facility underutilization of $382 million in 2023 due to wafer start reductions. We estimate that we will recognize approximately $200 million of period costs from underutilization due to wafer start reductions in the first quarter of 2024. We have also taken significant steps to reduce our costs and operating expenses.
We recognized period costs from fabrication facility underutilization of $382 million in 2023 and $165 million in the first quarter of 2024 due to wafer start reductions. Subsequently, fabrication facility underutilization was reduced and principally related to legacy manufacturing capacity. Accordingly, 2024 period costs beyond the first quarter were not significant.
The impacts of inventory NRV write-downs are summarized below: 46 Table of Contents For the year ended 2023 2022 2021 Provision to write down inventory to NRV $ (1,831) $ — $ — Lower costs from sale of inventory written down in prior periods 844 — — $ (987) $ — $ — Our consolidated gross margin percentage increased to 45% for 2022 from 38% for 2021, as a result of improvements in margins for both DRAM and NAND products, primarily due to reductions in manufacturing costs.
Our consolidated gross margin percentage improved to 22% for 2024 from negative 9% for 2023, as a result of improvements in margins for both DRAM and NAND products, primarily due to increases in average selling prices, and manufacturing cost reductions, the effects of charges to write down inventories to their NRV in 2023 and lower costs in 2024 from the sale of inventories written down in 2023 (as detailed in “Inventory NRV write-downs” below).
Impact of China Cyberspace Administration Decision On March 31, 2023, China’s Cyberspace Administration (the “CAC”) notified us that it was conducting a cybersecurity review of our products sold in China. On May 21, 2023, we received notice that the CAC had concluded its review and decided that our products presented a cybersecurity risk.
Also in 2023, China’s Cyberspace Administration (the “CAC”) conducted a cybersecurity review of our products sold in China and decided that our products presented a cybersecurity risk. The CAC determined that critical information infrastructure operators in China may not purchase Micron products.
Restructure and Asset Impairments: For a discussion of restructure and asset impairments, see the Overview sections above titled “2023 Restructure Plan” and “Lehi, Utah Fab and 3D XPoint.” 48 Table of Contents Interest Income (Expense), Net : Interest income (expense) improved for 2023 as compared to 2022 primarily as a result of increases in interest income due to higher interest rates on our cash and investments, partially offset by increases in interest expense due to higher debt balances and interest rates.
SG&A expenses for 2023 were 14% lower as compared to 2022 primarily due to decreases in employee compensation, legal fees, advertising, and professional services. 50 Table of Contents Interest Income (Expense), Net : Interest income (expense) deteriorated for 2024 as compared to 2023 primarily due to increases in interest expense as a result of higher interest rates on our debt, partially offset by increases in interest income due to higher interest rates on our cash and investments.
These actions include the 2023 Restructure Plan discussed below and additional reductions in external spending, including implementing productivity programs across the business, suspension of our 2023 bonus company-wide, reductions in select product programs, lower discretionary spending, and cuts to 2023 executive salaries across the company.
These measures included the 2023 Restructure Plan, as well as implementing productivity programs, suspension of our 2023 bonus, reductions in select product programs, lower discretionary spending, and cuts to 2023 executive salaries. Under the 2023 Restructure Plan, we reduced our headcount by approximately 15% by the end of calendar 2023, through a combination of voluntary attrition and personnel reductions.
Therefore, the full impact of the CAC decision on our business remains uncertain. 44 Table of Contents The CAC decision has impacted our business, particularly in the domestic data center and networking markets in China.
The CAC decision has impacted our business, particularly in the domestic data center and networking markets in China, and we have been working to mitigate that impact. Our goal is to retain our worldwide DRAM and NAND market share.
SG&A expenses for 2022 were 19% higher as compared to 2021 primarily due to increases in employee compensation, professional services, and legal fees.
Selling, General, and Administrative: SG&A expenses for 2024 increased 23% as compared to 2023 primarily due to an increase in employee compensation.
Business – Overview.” Industry Conditions The memory and storage industry environment deteriorated sharply in the fourth quarter of 2022 and throughout 2023 due to weak demand in many end markets combined with global and macroeconomic challenges and lower demand resulting from customer actions to reduce inventory levels.
We executed well on pricing and improved our financial performance significantly from the start of the year. We are exiting the year with excellent momentum and an industry-leading product portfolio. In contrast, 2023 was a year of weak memory and storage industry demand in many end markets, stemming from global macroeconomic challenges and customer actions to reduce inventory levels.
Under the plan, we expect our headcount reduction to approach 15% by the end of calendar 2023, through a combination of voluntary attrition and personnel reductions. In connection with the plan, we incurred restructure charges of $171 million in 2023 primarily related to employee severance costs. The 2023 Restructure Plan was substantially completed in 2023.
We incurred restructure charges of $171 million in 2023 primarily related to employee severance costs.
Removed
Ongoing demand growth, customer inventory normalization, and industry-wide supply discipline have set the stage for increased revenue, and improved pricing and profitability throughout fiscal 2024. As a result, pricing trends have started to improve and there were no write downs of inventories to net realizable value in the fourth quarter of 2023.
Added
Business – Overview.” Industry Conditions Throughout 2024, we experienced substantial improvements in pricing and margins. Increasing demand growth, driven in part by deployment of AI and mostly normal customer inventories, combined with industry-wide supply discipline, resulted in an industry supply and demand balance that substantially improved from 2023 conditions.
Removed
However, further write-downs of inventories in future quarters could occur if pricing expectations deteriorate. Given the challenging pricing environment, elevated levels of inventories for suppliers and customers, and significant supply-demand mismatch, we expect industry profitability will remain challenged into 2024.
Added
In manufacturing, we have been fully utilized throughout most of 2024 on our high-volume manufacturing nodes where we are maximizing output against our current capacity, which we have proactively, structurally lowered.
Removed
As a result of these conditions and increases in our inventory levels, we have reduced capital expenditures and also significantly reduced wafer starts in 2023 for both DRAM and NAND. We expect wafer starts will remain significantly below peak capacity levels for the foreseeable future as we remain focused on managing down our inventories and controlling our supply.
Added
Beginning in the latter part of 2022, we reduced capital expenditures and wafer starts for both DRAM and NAND in response to challenging market conditions and increased levels of our inventories. In addition, to improve capital efficiency, we redeployed equipment from older technology nodes to support conversions to leading-edge nodes.
Removed
As such, the CAC determined that critical information infrastructure operators in China may not purchase Micron products. There is no list of the companies that have been designated as critical information infrastructure operators published by the Chinese government or otherwise available to us.
Added
Since the number of wafer processing steps is higher for leading-edge nodes, this approach has resulted in a meaningful structural reduction in DRAM and NAND wafer capacity. We believe this approach to node migration and consequent wafer capacity reduction was adopted across the industry.
Removed
In addition, although demand for DRAM and NAND is improving as customer inventory levels continue to normalize and secular growth drivers remain intact, the CAC decision continues to impact our revenue opportunity in China. This significant headwind is impacting our outlook and slowing our recovery. We are working to mitigate this impact over time and expect quarter-to-quarter revenue variability.
Added
In connection with improved 2024 market conditions, we reinstated our bonuses and phased out certain other temporary cost-saving measures that were implemented in 2023. We took significant steps in 2023 to reduce our costs and operating expenses, both on a temporary and ongoing structural basis.
Removed
Our revenue with companies headquartered in mainland China and Hong Kong, including direct sales as well as indirect sales through distributors, is approximately a quarter of our worldwide revenue and remains our principal exposure to the CAC decision.
Added
These conditions drove a recovery of average selling prices throughout 2024 after significant declines in average selling prices throughout 2023.
Removed
Although the impact of the CAC decision remains uncertain, we believe that approximately half of that China-headquartered customer revenue, which equates to a low-double-digit percentage of our worldwide revenue, is at risk of being impacted.
Added
Further changes in the tax laws of foreign jurisdictions could arise as a result of the base erosion and profit shifting project, including Pillar Two Model Rules (“Pillar Two”), undertaken by the Organisation for Economic Co-operation and Development (“OECD”). Nearly all European Union member states have enacted the Pillar Two legislation, which will be effective for us in 2025.
Removed
Despite the near-term impact to our demand as a result of the CAC decision, our long-term goal is to retain our worldwide DRAM and NAND market share. 2023 Restructure Plan We initiated a restructure plan in response to challenging industry conditions (the “2023 Restructure Plan”).
Added
While we do not expect these enacted laws to materially impact our effective tax rate for 2025, additional countries where we operate, including Singapore, have announced plans to adopt Pillar Two legislation. Enactment of this legislation would become effective for us in 2026 and significantly increase our tax expense.
Removed
As a result of the 2023 Restructure Plan, we expect to realize cost savings of approximately $130 million per quarter (approximately 60% in cost of goods sold, 30% in R&D, and 10% in SG&A) subsequent to 2023. Further information on restructure activities can be found in “Item 8.
Added
We expect to engage in a variety of financing transactions, from time to time, for such purposes as well as to refinance our existing indebtedness, including the issuance of securities. As of August 29, 2024, $2.50 billion was available to draw under our Revolving Credit Facility.
Removed
Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Restructure and Asset Impairments.” Lehi, Utah Fab and 3D XPoint In 2021, we updated our portfolio strategy to further strengthen our focus on memory and storage innovations for the data center market.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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The substantial majority of our sales are transacted in the U.S. dollar; however, significant amounts of our operating expenses and capital expenditures, and certain assets and liabilities, are incurred in or exposed to other currencies, primarily the Chinese yuan, euro, Indian rupee, Japanese yen, Malaysian ringgit, New Taiwan dollar, and Singapore dollar.
The substantial majority of our sales are transacted in the U.S. dollar; however, significant amounts of our operating expenses and capital expenditures, and certain assets and liabilities, are incurred in or exposed to other currencies, primarily the Canadian dollar, Chinese yuan, euro, Indian rupee, Japanese yen, Malaysian ringgit, New Taiwan dollar, and Singapore dollar.
Risk Factors.” Changes in foreign currency exchange rates could materially adversely affect our business, results of operations, or financial condition. 54 Table of Contents The functional currency for all of our operations is the U.S. dollar.
Risk Factors – Changes in foreign currency exchange rates could materially adversely affect our business, results of operations, or financial condition.” The functional currency for all of our operations is the U.S. dollar.
We have established currency risk management programs for our monetary assets and liabilities denominated in foreign currencies to hedge against fluctuations in the fair value and volatility of future cash flows caused by changes in currency exchange rates.
We have established currency risk management programs for our monetary assets and liabilities, investments in debt instruments, and forecasted future cash flows denominated in foreign currencies to hedge against fluctuations in the fair value and volatility of future cash flows caused by changes in currency exchange rates.
We estimate that, as of August 31, 2023 and September 1, 2022, a hypothetical 1% decrease in market interest rates would increase the fair value of our fixed-rate debt by approximately $475 million and $275 million, respectively. Interest rate risk related to our investment portfolio is managed by primarily investing in shorter term securities.
We estimate that, as of August 29, 2024 and August 31, 2023, a hypothetical 1% decrease in market interest rates would increase the fair value of our fixed-rate debt by approximately $520 million and $475 million, respectively. Interest rate risk related to our investment portfolio is managed by primarily investing in shorter term securities.
We estimate that, as of August 31, 2023 and September 1, 2022, a hypothetical 1% increase in interest rates would decrease the fair value of our portfolio by approximately $20 million and $30 million, respectively. Such impact would only be realized if investments were sold prior to maturity.
We estimate that, as of August 29, 2024 and August 31, 2023, a hypothetical 1% increase in interest rates would decrease the fair value of our portfolio by approximately $20 million. Such impact would only be realized if investments were sold prior to maturity.
As of August 31, 2023 and September 1, 2022, we had fixed-rate debt with an aggregate carrying value of $7.52 billion and $4.03 billion, respectively, and as a result, the fair value of our debt fluctuates with changes in market interest rates.
As of August 29, 2024 and August 31, 2023, we had fixed-rate debt with an aggregate carrying value of $8.52 billion and $7.52 billion, respectively, and as a result, the fair value of our debt fluctuates with changes in market interest rates.
As of August 31, 2023 and September 1, 2022, we had floating-rate debt, including fixed-rate debt that is swapped to floating-rate debt, with an aggregate principal amount of $4.63 billion and $2.09 billion, respectively.
As of August 29, 2024 and August 31, 2023, we had floating-rate debt, including fixed-rate debt that is swapped to floating-rate debt, with an aggregate principal amount of $2.89 billion and $4.63 billion, respectively.
Based on monetary assets and liabilities denominated in foreign currencies, we estimate that a hypothetical 10% adverse change in exchange rates versus the U.S. dollar would result in losses of approximately $129 million as of August 31, 2023 and $186 million as of September 1, 2022.
Based on monetary assets and liabilities and investments in debt instruments denominated in foreign currencies, we estimate that a hypothetical 10% adverse change in exchange rates versus the U.S. dollar would result in losses of approximately $480 million as of August 29, 2024 and $129 million as of August 31, 2023.
To hedge the exposure of changes in cash flows from changes in currency exchange rates for certain capital expenditures and manufacturing costs, we may utilize currency forward contracts that generally mature within two years. See “Item 8. Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Derivative Instruments.” 55 | 2023 10-K Table of Contents
We may also hedge currency risk arising from foreign currency-denominated investments in debt instruments with currency forward contracts that generally mature within one year. To hedge the exposure of changes in cash flows from changes in currency exchange rates for certain capital expenditures and manufacturing costs, we may utilize currency forward contracts that generally mature within two years.
A hypothetical 1% increase in the interest rates of this floating-rate debt would result in an increase in annual interest expense of $46 million and $21 million as of August 31, 2023 and September 1, 2022, respectively.
A hypothetical 1% increase in the interest rates of this floating-rate debt would result in an increase in annual interest expense of $29 million and $46 million as of August 29, 2024 and August 31, 2023, respectively. 56 Table of Contents Foreign Currency Exchange Rate Risk The information in this section should be read in conjunction with the information related to changes in the currency exchange rates in “Part I – Item 1A.
Removed
Foreign Currency Exchange Rate Risk The information in this section should be read in conjunction with the information related to changes in the currency exchange rates in “Part I – Item 1A.
Added
See “Item 8. Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Derivative Instruments.” 57 | 2024 10-K Table of Contents

Other MU 10-K year-over-year comparisons