$4.09B ( YoY, QoQ) with DRAM $2.8B ( YoY) and NAND $1.1B ( YoY)
↓-47%
Rd Spend
$3.6B annual run-rate ( YoY) representing of revenue
↑+5%
Net Income
-$2.3B vs +$2.7B YoY with net margin
↓-56.2%
Gross Margin
(-3440bps YoY, -1580bps QoQ) with pricing and utilization headwinds
↑22.9%
Free Cash Flow
-$1.5B vs +$3.2B YoY with conversion rate
↓-37%
Operating Margin
(-7320bps YoY) including inventory charges
↓-41.7%
Growth Indicators
20 QoQ declines across product lines
↓-30%
Bit Shipments↓DRAM -15% QoQ, NAND -21% QoQ
Inventory Days151 days (+45 days YoY)
Micron faces severe headwinds as revenue collapsed 47% YoY to $4.09B amid unprecedented inventory corrections and pricing pressure in memory markets. Gross margins contracted dramatically to 22.9% (-34.4pts YoY) forcing aggressive supply cuts and $2.6B in inventory write-downs. The company announced plans to cut DRAM/NAND production by 20%+ and reduce CapEx by 40% to $8B in FY23. Management expects challenging conditions through 2023 but sees potential recovery starting in H2 as customer inventories normalize.
Competitor actions maintaining high utilization trigger price war
China exposure (25% revenue) vulnerable to geopolitical disruption
Fixed cost absorption deteriorates further with production cuts
Key Opportunities
AI/ML adoption driving high-margin HBM memory demand ($5B+ TAM by 2025)
Automotive segment growing 25%+ annually from $2B base
Cost optimization provides operating leverage in recovery
Industry consolidation improves long-term pricing discipline
Bottom Line
Micron's Q4 results represent a cyclical trough that will test management's ability to navigate both near-term market challenges and long-term strategic positioning. While aggressive supply cuts and cost initiatives demonstrate appropriate crisis response, sustainable recovery requires broader demand stabilization and inventory normalization likely extending through H1 2023. The company's maintained R&D investment and technology leadership provide competitive buffer, but prolonged downturn could force harder strategic choices. Key metrics to watch include bit shipment trends, inventory levels at key customers, and early indicators from PC/mobile markets. The contrarian opportunity lies in Micron's strengthened cost structure and technology position emerging from this downturn, though timing remains highly uncertain.