Sanjay Mehrotra
Chairman,President and Chief Executive Officer at Micron Technology
Thank you, Satya. Good afternoon, everyone. Micron is in the best competitive position in our history and we are achieving share gains across high-margin product categories in our industry. Our strong product momentum has enabled us to build deeper customer relationships and Micron's industry-leading products are now more firmly entrenched in our customers' high-value product roadmaps. In fiscal Q2, data center DRAM revenue reached a new record. HBM revenue grew more than 50% sequentially to a new milestone of over $1 billion of quarterly revenue.
Our HBM shipments were ahead of our plans, demonstrating strong execution of our ongoing ramp. The combination of our revenue from high-capacity DRAM modules and our industry-leading LP DRAM for the data center also exceeded the $1 billion milestone for the quarter. Micron remains the only company in the world to ship low-power DRAM into the data center in high-volume, showcasing our pioneering innovation and deep partnership with our customers for differentiated solutions., as we build-on this momentum, we expect fiscal Q3 revenue to be another record for Micron, driven by shipment growth across both DRAM and NAND.
We see the combination of AI data center demand and the ramp of HBM and its associated trade ratio contributing to tightness at the leading-edge and constraining non-HBM DRAM supply. We expect supply actions announced by NAND companies to improve the dynamics in the NAND market. Micron's one beta DRAM technology leads the industry and we are extending our leadership with the launch of our One Gamma node and the industry's first shipments of one gamma-based D5 products last month. Micron's Gamma is our first DRAM node incorporating EUV and we have achieved 20% lower-power, 15% better performance and over 30% improvement in bit density compared to our 1 beta DNAM.
Micron's leading-edge Gen 9 NAND technology node delivers the industry's fastest TLC-based NAND and we are managing the ramp of this node mindful of the supply-demand balance in the industry., Micron continues to make disciplined investments that position us to capitalize on the significant growth opportunities driven by AI. We are focused on growing HBM capacity in our existing manufacturing facilities to meet requirements through 2026. In January, we broke ground on an HBM advanced packaging facility in Singapore. This investment allows us to meaningfully expand our total advanced packaging capacity beginning in calendar 2027. Our new DRAM fab construction in Idaho completed an important construction milestone that enabled the receipt of the first disbursement of funding from our chips grant for the project during the quarter.
This new Idaho fab will provide meaningful DRAM output starting in fiscal 2027. Turning to our end-markets. Dramatic improvements in computation hardware have reduced the per token cost of generative AI models. These hardware improvements, along with more efficient algorithms and software drive down the cost of influence and make generative AI-based capabilities more accessible to new applications and use cases. This broadening deployment creates a powerful growth vector for aggregate AI demand and recent innovations and those in the pipeline from key contributors to the AI ecosystem will continue to fuel this growth trend., as GPU and custom AI accelerator performance capabilities continue to improve with each new-generation of product, these high-performance processors are start of memory bandwidth.
HBM memory provides the bandwidth necessary to leverage these powerful processors in the most effective and efficient manner, and we are excited to see the growth opportunities ahead for this complex and high-value product category where our customers now recognize Micron as the HBM technology leader in our industry. Recently, large hyperscale customers reiterated strong year-over-year growth for their capital investments in calendar 2025. We project mid-single-digit server unit growth in calendar 2025 with growth in both traditional and AI servers. We see strong demand for HBM and have once again increased our HBM TAM estimate for calendar 2025 to over $35 billion.
We remain on-track to reach HBM share similar to our overall DRAM supply share on a run-rate basis in calendar Q4 2025. As previously mentioned, Micron is sold-out of our HBM output in calendar 2025. We are seeing strong demand for our HBM supply in 2026 and are in discussions with our customers on agreements for their calendar 2026 HBM demand., Micron's industry-leading HBM 3E delivers a 30% power reduction compared to the competition and our HBM 3E 12 high has a remarkable 20% power advantage over competing 8 high products, while providing a 50% higher memory capacity.
We have begun volume production of HBM 3E 12 high and are focused on ramping capacity and yield. We anticipate HBM will comprise the vast majority of our HBM shipments in the second-half of calendar 2025. We are making good progress on additional platform and customer qualifications with HBM. Micron's HBM 3E 8 high is designed into NVIDIA's GB 200 system and our HBM 3E 12 high is designed into the GB300. In fiscal Q2, we initiated volume shipments to our third large customer and anticipate additional customers over-time. We expect multi-billion dollars in HBM revenue in fiscal 2025.
Looking ahead, we are enthusiastic about Micron's HBM4, which will ramp-in volume in calendar 2026. Our HBM4 provides a bandwidth increase of over 60% compared to HBM 3E. The timing of our HBM4 is aligned to our customers' requirements and we are focused on delivering the best HBM4 products to the market across power efficiency, quality and performance., our proven HBM product performance, our strong HBM roadmap and our demonstrated manufacturing excellence uniquely positioned Micron to capitalize on next-generation HBM4 and HBM4E solutions.
Micron has led the adoption of LP in data center. In AI servers, Micron's LP lowers memory power consumption by over two-thirds compared to D5. We expect to maintain our leadership position in LP for server as it transitions from soldered components to a SOCAM or small outline compression attached memory module form factor. Micron SOCAM was developed in collaboration with NVIDIA to support the GB300. LP DRAM in a SOCAM form factor enables easier server manufacturability and serviceability and helps drive broader LP adoption in the server market.
We are on-track to deliver multi-billion dollars in revenue in fiscal 2025 from our portfolio of high-capacity D5 modules and LP products for the data center. In data center NAND, demand moderated in fiscal Q2 due to short-term customer inventory-driven impacts and we see a return to bit shipment growth in the months ahead. In calendar Q4 2024, based on industry analyst reports, Micron achieved yet another record-high market-share in data center SSDs with revenue growth in each category, including performance, mainstream and capacity SSDs. Our high-performance 950 SSD, which is on NVIDIA's GB 200 NVL 72 approved vendor list, completed qualifications at multiple Customers. During the quarter, we announced that Micron's data center class G8 QLC-based NAND components are qualified for production in pure storage's high-capacity 150 terabyte direct flash module. Micron's data center class NAND components give customers the ability to leverage our industry-leading land design and process technology in their custom storage solutions. Micron's leadership in QLC NAND supports the transition from HDD to NAND solutions in the data center. We expect to generate multiple billions of dollars in data center NAND revenue and once again grow our data center NAND market-share in calendar 2025. We expect the PC market to grow mid-single digits in unit terms in calendar 2025 with growth weighted to the second-half of calendar 2025. The Windows 10 end-of-life in October 2025 combined with an aging installed-base and the desire amongst customers to ensure that their PC hardware specs can support compelling AI applications in the future are key catalysts that drive this growth. AI PCs require a minimum of 16 gigabytes of DRAM with many models requiring even higher memory versus the average 12 gigabyte PC content last year. During the quarter, we sampled our 16 gigabit 1 gamma-based D5 products to PC clients. In NAND, we launched our Gen 9 based 4,600 performance SSDs, the fastest in the world for the client market and completed qualifications of our 2,650 mainstream SSDs at multiple PC OEMs. Turning to mobile, our expectations for smartphone unit volume growth in calendar 2025 remain at low single-digit percentages. Smartphone customer inventory dynamics have played out as anticipated, leading to mobile DRAM and NAND bit shipment growth in our fiscal Q3. AI adoption continues to be a significant driver for increased mobile DRAM demand. AI capable flagship phones increasingly feature DRAM capacities of 12 gigabyte or higher compared to the 8 gigabyte in last year's models. Smartphone OEMs are using Micron's industry-leading 9.6 gigabit per second Lp 5x DRAM to improve AI performance, delivering up to 20% more tokens per second than those using legacy speed grades on the same SOC. During the quarter, we announced that our LP 5x DRAM and UFS 4.0 NAND were featured in the high-end of the Samsung Galaxy S25 series. Micron's mobile DRAM and UFS storage solutions are in high-demand and will continue to launch in flagship and high-end smartphones throughout the year. Additionally, we are now sampling the industry's first mobile G9 managed NAND-based UFS 4.1 solution in densities up to-1 terabytes. Automotive OEMs, industrial and consumer embedded customers are in the later stages of adjusting their inventory levels. In automotive, which comprises the largest portion of our EBU revenue, memory and storage content per car continues to increase as AI-enabled in-vehicle infotainment systems become more enriched and driver assistance functions become more capable. Advanced Robotaxi platforms today contain over 200 gigabyte of DRAM or 20 to 30 times higher than the amount of DRAM in the average car. Micron is well-positioned to capitalize on this trend with our industry-leading portfolio of automotive products. During the quarter, we announced the production readiness of the industry's first automotive LP 5x DRAM product that supports a 9.6 gigabit per second speed grade, addressing the increasing performance requirements of AI-driven applications in vehicles. Additionally, our 4,150 SSD became the industry's first enterprise SSD product that is automotive qualified and is now sampling at target customers, further reinforcing our commitment to innovation and leadership in this important market. Now turning to our market outlook. Calendar 2024 DRAM bit demand growth was in the high-teens, consistent with our prior expectations. Calendar 2024 NAND bit demand growth was approximately 10%, slightly below our previous view of low-double-digits. We forecast calendar 2025 DRAM bitch demand growth in the mid to-high teens percentage range and NAND in the low double-digit percentage range. Over the medium-term, we expect industry bit demand growth of mid-teens CAGR for both DRAM and NAND. As we have previously discussed, NAND technology transitions provide a significant increase in overall bit output. Sustained NAND industry supply-demand balance can result from increasing the time between node transitions along with sustained reductions in NAND industry capex and wafer capacity. NAND industry wafer capacity underutilization can help to improve the near-term dynamics in the NAND market. We expect Micron's supply growth in calendar 2025 to be lower than industry demand growth for both DRAM and NAND. We expect our inventory days to decline as we move through calendar 2025. We expect to maintain our share in DRAM and NAND in calendar 2025. In DRAM, we expect a strong ramp of HBM throughout calendar 2025. As noted before, consumes three times the amount of silicon compared to D5 to produce the same number of beds. Looking ahead, we expect the trade ratio to increase with HBM 4 and then again with HBM 4E when we expect it to exceed 4:1. This sustained and significant increase in silicon intensity for the foreseeable future contributes to tightness for industry leading-edge node supply and constraints capacity for non-HBM products. In NAND, we continue to underutilize our fabs and our wafer output is down mid-teens percentage from prior levels. We plan to reuse a portion of our underutilized NAND equipment to support capital-efficient conversions to leading-edge nodes. This strategy results in over 10% structural reduction of NAND wafer capacity exiting fiscal 2025 compared to levels exiting fiscal 2024. We will continue to prudently manage our DAN supply, including the levels of our capital investment, the pace of ramp of our new technology node, fab capacity and utilization consistent with our demand growth. You. Our capital spending plans remain unchanged at approximately $14 billion for fiscal 2025. A significant portion of our capital investments are focused on multiyear facility investments to support our DRAM and HPM manufacturing, including our Idaho fab, Singapore HPM Advanced packaging facility and DRAM test facility. Micron will remain disciplined with our overall equipment investments to manage our supply growth consistent with demand. On tariffs, Micron serves as the US importer of record for a very limited volume of products that would be subject to newly announced tariffs on Canada, Mexico and China. We continue to monitor the possibility of future tariffs and are prepared to work with our customers and suppliers to understand future tariff effects and supply-chain options that may arise. Where tariffs do have an impact, we intend to pass those costs along to our customers. With that, I will now turn it over to Mark for our financial results and outlook.
