How Micron Makes Money

Micron Technology Inc. (MU) develops and manufactures memory and storage products used in personal computers, networks, and data centers as well as the healthcare and automotive industries. Across its global brands, including Micron and Crucial, the company produces memory cards, drives, and network infrastructure technology.

As one of the leading semiconductor companies, Micron faces major competition from Intel Corp. (INTC), Taiwan Semiconductor Manufacturing Company (TSM), Samsung Electronics Co. Ltd. (SSNLF), and other chip producers.

Micron's Financials

Micron announced in late March financial results for Q2 of its 2022 fiscal year (FY), the three-month period ended March 3, 2022. The company posted a net income of $2.3 billion, up 275.3% compared to the year-ago quarter. Revenue grew 24.9% year over year (YOY) to $7.8 billion. Operating income, which the company uses as a profitability metric for its individual business segments, rose 284.0% YOY to $2.5 billion.

Micron noted in its earnings press release for the quarter that its results surpassed the high end of the company's own revenue guidance. It highlighted its strong position within the markets for DRAM and NAND memory chips. DRAM products accounted for more than 73% of total revenue during the quarter while NAND products comprised about 25% of the total. The company added that based on its results in the first half of its fiscal year it expected to report record revenue for full-year FY 2022.

Micron's Business Segments

Micron operates through four different reportable segments: Compute and Networking Business Unit (CNBU), Mobile Business Unit (MBU), Storage Business Unit (SBU), and Embedded Business Unit (EBU). The company provides a breakdown of revenue and operating income for each of these segments.

It also reports an additional miscellaneous category to cover other revenue sources. This "All Other" unit contributes a negligible amount to total revenue and operating income. Results from this "All Other" unit are thus excluded from the revenue and operating income percentage share calculations below and in the pie charts above.

Compute and Networking Business Unit (CNBU)

Micron's CNBU segment includes memory products that are sold into markets for cloud server, enterprise, graphics, networking, and other clients. CNBU generated $3.5 billion in revenue in Q2 FY 2022, up 31.8% compared to the year-ago quarter. The segment accounted for the majority of the company's revenue during the quarter, with a revenue share of more than 44% across all four segments. Operating income rose 120.3% YOY to $1.6 billion, comprising nearly 57% of the total across all segments.

Mobile Business Unit (MBU)

The MBU segment includes memory and storage products sold into the mobile-device and smartphone markets. MBU's revenue grew 3.5% YOY to $1.9 billion, accounting for about 24% of the company's revenue across all segments in Q2 FY 2022. The segment generated $588 million in operating income, up 26.7% compared to the year-ago quarter. It accounted for over 21% of total operating income across all four segments.

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. SBU generated $1.2 billion in revenue in Q2 FY 2022, up 37.7% compared to the year-ago quarter. The segmented accounted for 15% of total revenue across all four segments. It posted $178 million in operating income, a significant improvement from the $59 million operating loss reported in the year-ago quarter. The segmented accounted for more than 6% of total operating income across all segments.

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. EBU's revenue in Q2 FY 2022 rose 36.6% YOY to $1.3 billion, comprising over 16% of total revenue across all segments. The segment generated $421 million in operating income, up 198.6% compared to the year-ago quarter. It accounted for more than 15% of total operating income across all four segments.

Micron's Recent Developments

On April 5, 2022, Micron announced the appointment of Mark Murphy as the company's executive vice president and chief financial officer (CFO), effective April 18, 2022. Murphy, who most recently served as CFO for semiconductor firm Qorvo, has 25 years of financial and operational leadership experience. He will be responsible for Micron's financial strategy to help the company navigate its next era of growth.

How Micron Reports Diversity and 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.