Micron Technology, Inc. (MU) develops and manufactures memory and storage technologies used in personal computers, networks, data centers, and the automotive industry. Across its major brands including Micron, Crucial, and Ballistix, the company produces memory cards, drives, and infrastructure technology. As one of the leading semiconductor companies, Micron faces major competition from Intel Corp. (INTC), Taiwan Semiconductor Manufacturing Company (TSM), and other chip producers.
- Micron Technology is a semiconductor company that develops and makes memory and storage solutions.
- Micron products are used in automobiles, consumer electronics, communications products, servers, and computers.
- Its Compute and Networking Business Unit generates the largest share of revenue and operating income.
- Micron CFO says demand outlook worsening over next several months.
In fiscal year (FY) 2019 ending August 29, 2019, Micron reported $6.4 billion of net income, down 55.0% YOY. Revenue fell 23.0% to $23.4 billion in the same period. Micron has made some improvements over the most recent quarter. For Q3 FY 2020, ended May 28, 2020, Micron generated $5.4 billion in revenue, up from $4.8 billion in the same quarter in FY 2019. However, during the same period, the company generated only $805 million in net income, down from $851 million in the same quarter a year earlier.
Micron's Business Segments
Micron breaks down its revenue and operating profit into four major categories: Compute and Networking Business Unit (CNBU), Mobile Business Unit (MBU), Storage Business Unit (SBU), and Embedded Business Unit (EBU). It also reports an additional miscellaneous category to cover other revenue sources. As a company focused on memory and storage products and solutions, Micron's business segments are distinguished primarily by the markets and clients that each one targets. The data shown in the pie charts excludes segments with negative revenue or negative profits.
Compute and Networking Business Unit (CNBU)
Micron's CNBU segment includes memory products which are sold into markets for cloud server, enterprise, graphics, networking, and other clients. Within the CNBU segment, the client market is the largest component, thanks in large part to sales of the company's DDR4 DRAM products. For Q3 FY 2020, CNBU generated $2.2 billion in revenue, accounting for nearly 41% of the company's total revenue and about 46% of operating income. While this makes CNBU the largest source of revenue for Micron, the segment accounted for an even larger percentage of revenue for all of FY 2019. CNBU revenue grew 6.7% YOY in Q3 FY 2020, while operating income fell 44.0%.
Mobile Business Unit (MBU)
The MBU segment includes memory products sold into the mobile device and smartphone markets, such as flash storage drives, and discrete DRAM. For Q3 FY 2020, MBU generated $1.5 billion in revenue, or about 28% of Micron's total revenue. MBU generated the fastest revenue growth out of all the company's segments, at a rate of 29.9% for the quarter. Operating income for the segment fell 10.9% and comprises about 30% of Micron's total operating income.
Storage Business Unit (SBU)
Micron's SBU segment includes solid state drives as well as component-level solutions sold to cloud, client, enterprise and other storage markets. This segment is known primarily by the company's flagship SATA 5200 and 5100 series SSDs. For Q3 FY 2020, SBU generated $1.0 billion in revenue, nearly 19% of Micron's total revenue for the quarter. SBU revenue rose by 24.7%. SBU also generated $177 million in operating income, a significant change from the operating loss of $198 million reported for the same three-month period a year ago.
Embedded Business Unit (EBU)
The EBU segment covers memory and storage products used in a variety of industries, including automotive, consumer markets, and industrial applications. These products help to power applications including voice and gesture control in automobiles, machine-to-machine communication, and automation processes. EBU accounted for $675 million in revenue for Q3 FY 2020, or about 12% of Micron's total revenue. Revenue was down by 3.6% YOY. In Q3 FY 2020, EBU operating income made up about 6.5% of the total, having declined 63.0% YOY.
Micron's Recent Developments
Micron Chief Financial Officer (CFO) Dave Zinsner, speaking at a KeyBanc Capital Markets online technology conference earlier this month, noted that the company is no longer on track to meet its sales outlook for the three-month period ending this November. He said that the outlook for demand for the company's products is worsening and that customers' plans are "moving around" due to the economic uncertainty generated by the COVID-19 pandemic. Micron's shares dropped about 5% on the news.
How Micron Reports Diversity & Inclusiveness
As part of our effort to improve the awareness of the importance of diversity in companies, we offer investors a glimpse into the transparency of Micron and its commitment to diversity, inclusiveness, and social responsibility. We examined the data Micron releases to show you how it reports the diversity of its board and workforce to help readers make educated purchasing and investing decisions.
Below is a table of potential diversity measurements. It shows whether Micron discloses its data about the diversity of its board of directors, C-Suite, general management, and employees overall, as is marked with a ✔. It also shows whether Micron breaks down those reports to reveal the diversity of itself by race, gender, ability, veteran status, and LGBTQ+ identity.
|Micron Diversity & Inclusiveness Reporting|
|Race||Gender||Ability||Veteran Status||Sexual Orientation|
|Board of Directors||✔|
|General Management||✔ (U.S. Only)||✔|
|Employees||✔ (U.S. Only)||✔||✔||✔ (U.S. Only)||✔|
Micron Technology, Inc. "Form 10-K for the fiscal year ended August 29, 2019," Page 2. Accessed Feb. 29, 2020.
Micron Technology, Inc. "Form 10-K for the fiscal year ended August 29, 2019," Page 31. Accessed Feb. 29, 2020.
Micron Technology Inc. "Form 10-Q for the quarterly period ended May 28, 2020," page 3. Accessed Aug. 26, 2020.
Micron Technology, Inc. "Form 10-K for the fiscal year ended August 29, 2019," Page 2-5. Accessed Feb. 29, 2020.
Micron Technology, Inc. "Form 10-K for the fiscal year ended August 29, 2019," Page 79. Accessed Feb. 29, 2020.
Micron Technology, Inc. "Form 10-K for the fiscal year ended August 29, 2019," Page 3. Accessed Feb. 29, 2020.
Micron Technology Inc. "Form 10-Q for the quarterly period ended May 28, 2020," page 26.
Micron Technology, Inc. "Form 10-K for the fiscal year ended August 29, 2019," Page 80. Accessed Feb. 29, 2020.
Micron Technology Inc. "Form 10-Q for the quarterly period ended May 28, 2020," page 26. Accessed Aug. 26, 2020.
Micron Technology, Inc. "Form 10-K for the fiscal year ended August 29, 2019," Page 4. Accessed Feb. 29, 2020.
BNN Bloomberg. "Micron Falls After CFO Says Outlook Worse for Memory Chip Demand," Accessed Aug. 26, 2020.