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.
·
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.
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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
