Micron FQ4 Earnings Summary

 

Micron Announce FQ4 Earnings and Guidance for Next Quarter

It was a tale of two quarters, FQ4 was amazingly good. DRAM sales and QLC bits increased. The Forecast for FQ1 2021.... not so good.

https://investors.micron.com/news-releases/news-release-details/micron-technology-inc-reports-results-fourth-quarter-and-full-2

·        FQ4 was surprisingly strong. 6.1B Rev, GM higher at 35%, Non GAAP EPS 1.08. DRAM growth

·        Forecast for FQ1 was way down. Pricing way down, revenue way down. EPS 47c/shr. Revenue down 15% plus.  FQ1 is typical one of the strongest quarters and EPS is down 50% Q/Q

·        Inventory is rising and hints at rising customer inventories.

·        Huawei is Micron's biggest customer... lets get that license ASAP.

·        Exact NAND bit comments

a.      CY-20 industry bit demand growth in the mid-20s, with supply and demand roughly balanced. Micron NAND bit grow was flat in FQ4

b.      CY-21 industry bit demand growth of approximately 30%; risk of some excess supply unless industry capex moderates

c.      Long-term bit demand growth CAGR of approximately 30%

·        NAND ASPs down 8% and DRAM ASPs down LSD

·        Cost reduction will be mid teens in F21, DRAM cost reduction will be MSD in F21

What does All this mean? We have all the details on Micron's market position, Margin forecasts, and growth in the future.. but as a start:

Micron is losing ground on NAND technologies and cost reduction. The next big win is when Micron ships its second generation of NAND RG

DRAM is much better than in the past, but Micron is still not a leader in technology or cost. 

Micron goal will be to survive 2021, EPS will continue to be positive, and come out swinging in FQ1 2020 with NAND and DRAM technologies and hopefully revenue on 3D XPoint.

Looks like the memory recovery that should have happened in early 2021... but got prematurely started early in 2020 .... will actual happen in late 2021. We will get the rest of the memory company earnings over the next month or so.

Mark Webb

MKW Ventures Consulting 

www.mkwventures.com

Intel Q2 2020 earnings and announcements

Intel announced great earnings last week for the 2nd quarter. Then Intel announced that 7nm would be delayed and that datacenter might start to digest. Then, at the earnings call, the fun began










Top 5 Takeaways from Intel's announcements

• Intel still makes a lot of money, is growing revenue, and is making huge progress in datacenter and in memory/storage products. And the horrible PC market that everyone hates still makes a lot of money (yes, it is shrinking). 
• MKW VENTURES TAKE: End result Intel will continue to grow with industry for a long time. Intel is not dead now or in the future
• Intel stated that Datacenter demand will enter a digestion phase in 2nd Half of 2020. Intel actually predicted this earlier and we got the idea in late 2018 that this is the way the industry works. Build to stay ahead... then rest for a while. 
• MKW VENTURES TAKE: Intel can manage around this. If we combine this with overbuying that we believe happened due to pandemic, we believe that commodity markets (NAND, DRAM, HDD) will take a demand hit in coming 12 months. In memory all that matters is price which has held up well so far but will drop in 2H 2020
• Intel announced that 7nm will be delayed ... with some rambling about process 12 months and products 6 months. 
• MKW VENTURES TAKE(S)
• Intel 10nm was too aggressive to start. then it didnt work... then they tried to fix it.... still didnt work. Finally, they completely redesigned the process to only modules that worked but this caused product delays since all the process files, and design rules changed. Lesson learned.
• But 7nm is even harder than 10nm... and Intel wanted to make up for 10nm delays. So they had to stay aggressive.  (See "Roy McAvoy, US Open, 18th hole). Lesson unlearned.
• Intel is not the leader is process technology. The are not the largest or premier manufacturer. They do not get support from equipment vendors like before. They are a follower with a lot of talent. but other companies talent caught up
• We can go through the details of how this happened and why. But it was inevitable (see: IBM 1990s)
• Intel continues growth and financial success despite process issues and designs that are second to AMD. This has been the case for years. Intel is ramping 14nm products and winning. So we already know that Intel financial success doesn't depend on best product or process
• MKW VENTURES TAKE: Intel will succeed going forward. It will cost them 1-2B per year in waste due to product and process issues but they will still be much better off financially than AMD.
• Intel said they will look harder at outsourcing products.
• MKW VENTURES TAKE: Intel is already looking at outsourcing as a backup plan and has been or last 2-3 years. Intel will now look at parallel development and then make a choice. TSMC will win since the technology will be better, more mature, and lower cost. This will happen sooner than you think. The Fab plan is in place, product plan is in place, TSMC plan is in place. just need to pull trigger.
• This is good for Intel (Simplify development) good for TSMC (more Money) and bad for AMD. Some people said Intel won't get the support as TSMC is committed to AMD. Seriously.... they said that LOL.

Mark Webb
www.mkwventures.com