Micron Technology has revealed plans to increase its capital expenditures (capex) in the next fiscal year as the semiconductor major is expecting substantial growth in revenue.
Micron Technology is projecting Capex to be around the mid-30s percentage range of its revenue for FY25. The company’s investment focus will include HBM assembly and test equipment, the construction of fabs and back-end facilities, and technology transition investments to support growth.
For FY24, Micron has outlined a capex plan of approximately $8 billion, with wafer fabrication equipment (WFE) spending expected to decline.
A significant portion of the capex increase in FY25 will be allocated to construction at greenfield fabs in Idaho and New York. The company anticipates that construction capex in these locations will account for at least half of the overall capex increase.
However, the Idaho fab is not expected to contribute to meaningful bit supply until fiscal 2027, while the New York fab will not contribute to bit supply growth until fiscal 2028 or later. Future WFE spending in these fabs will be managed to align supply growth with expected demand growth.
Revenue Performance
Micron Technology reported revenue of $6.81 billion for its third quarter of fiscal 2024, which ended on May 30, 2024. This represents an increase from $5.82 billion in the previous quarter and $3.75 billion in the same period last year. The company’s strong performance was driven by robust AI demand and strong execution, resulting in a 17 percent sequential revenue growth, surpassing the guidance range for fiscal Q3.
“Robust AI demand and strong execution enabled Micron to drive 17 percent sequential revenue growth, exceeding our guidance range in fiscal Q3,” said Sanjay Mehrotra, President and CEO of Micron Technology. “We are gaining share in high-margin products like High Bandwidth Memory (HBM), and our data center SSD revenue hit a record high, demonstrating the strength of our AI product portfolio across DRAM and NAND.”
Segment Performance
DRAM: Fiscal Q3 DRAM revenue was approximately $4.7 billion, representing 69 percent of total revenue. DRAM revenue increased 13 percent sequentially, with bit shipments declining in the mid-single-digit percentage range and prices increasing by approximately 20 percent.
NAND: Fiscal Q3 NAND revenue was approximately $2.1 billion, representing 30 percent of total revenue. NAND revenue increased 32 percent sequentially, with bit shipments increasing in the high-single-digit percentage range and prices increasing by approximately 20 percent.
Business Unit
Compute and Networking: Revenue was $2.6 billion, up 18 percent sequentially. DRAM data center revenue more than doubled.
Mobile: Revenue was $1.6 billion, down 1 percent sequentially, as a planned decline in volume was partially offset by improved pricing.
Embedded: Revenue was $1.3 billion, up 16 percent sequentially, driven by record revenue in automotive.
Storage: Revenue was $1.4 billion, up 50 percent sequentially, with growth across all end markets and record data center SSD revenue, which nearly doubled sequentially.
Outlook
Micron Technology expects revenue to reach $7.6 billion in the current quarter. Additionally, it forecasts that capital expenditures will increase sequentially in the fiscal fourth quarter to approximately $3.0 billion.
Baburajan Kizhakedath
