Micron sees turnaround after challenging fiscal year for memory and storage

Micron finished its fiscal 2023 on a hopeful note—partly thanks to the AI boom-- after CEO Sanjay Mehrotra called the prior 12 months “a challenging year for the memory and storage industry, resulting in a significant impact to financial performance.”

In fact, the past year has been a historic downturn for all memory and storage players, and Micron’s numbers show it.

Micron’s fiscal 2023 revenues were just half of the prior year, reaching $15.54 billion versus $30.76 billion in fiscal 2022. Operating cash for 2023 was just $1.56 billion, versus $15.18 billion the prior year.  For its fourth quarter, Micron saw revenues of $4.010 billion, down nearly 40% from $6.6 billion a year earlier.

However, Mehotra predicted a market turnaround in 2024 with increasing demand and disciplined supply, with record market growth expected in 2025 as AI proliferates across the data center to the edge.

Like other companies, Micron is seeing greater demand with AI-related servers and Mehrotra noted AI training servers contain significantly higher DRAM and NAND content. “We believe our data center revenue has bottomed and we expect growth in fiscal Q1 and increasing momentum through fiscal years ’24 and ’25 in our data center business,” he told analysts on a call Wednesday.

Micron’s HBM3E product is currently being qualified for Nvidia compute silicon, he noted.

One high note in fiscal 2023 was a record revenue year for Micron’s automotive business . “We expect memory and storage content per vehicle to increase in both ADAS and in-cabin applications,” Mehrotra said.  “Fast-growing EVs typically contain higher memory and storage content.  Our automotive design win trajectory remains strong.”

A recent decision by China to restrict Micron sales in that country “continues to remain a risk for our business and the impact in our China demand is meaningful,” Mehrotra said in response to a question ono the earnings calls. “However, Micron has made strong progress with respect to mitigating the effects as well with our global customers who are not impacted by the [China] decision. And we are mitigating that and the effect of the mitigation also is reflected in our FQ results, as well as in FQ1 guidance.”

He added: “Remember that our goal remains to maintain our global market share here in terms of bits.”   Micron’s revenue guidance for the current Q1 quarter is $4.4 billion, plus or minus $200 million, with gross margin in the range of negative 4%.  That lowered outlook led to a decline in Micron stock of nearly 3% on Thursday with a price of $66.31 per share at noon ET.

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