Micron Technology, Inc. (NASDAQ:MU) Q3 2023 Earnings Call Transcript

Timothy Arcuri: Thanks a lot. I had two. Mark, the first one is for you. I was wondering if you can sort of lay out what the fiscal Q4 guidance would have looked like net of the ban. I know you said that the impact from the ban gets worse actually in the fiscal first half. So is it as simple as maybe fiscal Q4, you had said low double-digit bit impact, but it sounds like it’s probably that big in fiscal Q4. So something less than that in fiscal Q4 and then you sort of expand to a number something in that range in the first half of fiscal 2025 — ’24 rather? Can you sort of handicap that for us and shape it for us?

Mark Murphy: Yes. We had a small impact — very small in Q3. It’s a more material impact in Q4. We do expect the impact to increase. However, our actions to mitigate that will help offset the effect. But really, at this time, it’s a headwind, but there’s — and that’s clear. However, we are taking mitigating actions and it’s very uncertain, continues to evolve on what the impact will be. And again, the impact that we see in the fourth quarter, it’s contemplated in our guidance.

Timothy Arcuri: Got it. Maybe I’ll ask you in the follow-up. But my second question is for Sanjay. So, Sanjay, I asked you this last call, too. So you alluded to the smartphone customers at least wanting to kind of get out in front of what they see maybe could be some tightness and maybe they’re opportunistically trying to take advantage of pricing being so low. Can you just talk more broadly about what might change in your relationship with your customers coming out of this downturn? I mean, could we be headed toward a situation where maybe the data center customers that pushed you and your peers so far during the downturn that maybe we can talk about LTAs at some point. I know that this is a ways away, given kind of where we are today. But can you just talk about maybe over the past three months, when I asked you last time, how the tone of the discussion with the data center customers in particular has changed? Thanks.

Sanjay Mehrotra: Well, our customers, of course, work with us on LTAs. And as we have said, LTAs relate to their forecast for the year, generally. And while some customers may be operating on shorter term or other customers longer term, but generally speaking, they operate on yearly LTAs and LTAs involve supply and demand commitments from the two sides. Of course, sometimes with the changing industry environment on either side, on the supply or on the demand side, there can be adjustments made to those LTAs, and we work closely with our customers in those regards. And we have had close relationships with the customers. We have a very strong product momentum. You are particularly inquiring about data center. And let me tell you that our product momentum in data center with strong portfolio of solutions, particularly addressing the growing interest in AI, in data center, generative AI, becoming a big opportunity, and we look at it for 2024 as a big year for AI and for memory and storage and Micron will be well positioned with this product.