Micron Technology, Inc. (MU) FY2025 10-K and Q3 FY2026 10-Q Summary

Business

Source: Annual Report on Form 10-K for fiscal 2025 (year ended August 28, 2025), accession 0000723125-25-000028; segment, capacity and customer updates from the fiscal Q3 2026 Form 10-Q, accession 0000723125-26-000015.

Micron designs and manufactures semiconductor memory and storage: DRAM (including High-Bandwidth Memory, or HBM), NAND flash, and a small amount of NOR. It sells them under the Micron and Crucial brands as components, modules, SSDs, managed NAND, multi-chip packages and wafers. Its customers are hyperscale cloud operators, data center OEMs and enterprises, smartphone and PC makers, and automotive, industrial and consumer-device manufacturers. DRAM is the bulk of the business. In fiscal 2025, DRAM revenue was $28.58 billion and NAND revenue was $8.50 billion, out of total revenue of $37.38 billion. In fiscal Q3 2026, DRAM was $31.33 billion of the quarter's $41.46 billion.

How it makes money. Revenue depends on bit shipments times average selling prices (ASPs), set in a cyclical commodity-like market. Profit depends on how far per-gigabit manufacturing cost can be driven down through node transitions: 1-beta and EUV-based 1-gamma DRAM, and G8/G9 3D NAND. Most sales go through Micron's own direct sales force, with the rest through distributors, retailers and a web channel for Crucial products. Customers historically avoided long-term fixed-price contracts. Instead, long-term agreements had pricing and quantity renegotiated periodically. That is now changing (see "Strategic customer agreements" under Current quarter).

Segments. The four business units were reorganized in Q4 fiscal 2025:

• Cloud Memory (CMBU): memory for large hyperscale cloud customers, plus HBM for all data center customers. It also sells high-capacity DIMMs, LPDDR5 server memory (SOCAMM) and GDDR. Fiscal 2025 revenue: $13.52 billion.
• Core Data Center (CDBU): memory for mid-tier cloud, enterprise and OEM data center customers, plus all data center SSDs and NAND components. Fiscal 2025 revenue: $7.23 billion.
• Mobile and Client (MCBU): LPDDR and managed NAND for smartphones, DRAM and SSDs for PCs, and Crucial consumer products. Fiscal 2025 revenue: $11.86 billion.
• Automotive and Embedded (AEBU): DRAM, NAND, managed NAND, SSDs and NOR for automotive, industrial and consumer-embedded uses. Fiscal 2025 revenue: $4.75 billion.

Customers and concentration. About one-half of revenue came from the top ten customers in each of the last three fiscal years. About one-half of fiscal 2025 revenue came from the data center end market. One customer, mainly in CMBU, was 17% of fiscal 2025 revenue and 10% of revenue in the first nine months of fiscal 2026. About 80% of fiscal 2025 revenue was shipped to customer locations outside the United States.

Competition. The main competitors are Samsung Electronics, SK hynix, Kioxia, Sandisk, and the Chinese state-supported producers CXMT and YMTC. China's Cyberspace Administration ruled in May 2023 that critical information infrastructure operators in China may not buy Micron products. That ruling continues to weigh on sales to companies headquartered in mainland China and Hong Kong.

Manufacturing footprint. Micron makes its products in its own fabs and assembly/test sites in Taiwan, Singapore, Japan, the United States, Malaysia, China and India. A majority of fiscal 2025 DRAM output came from Taiwan. Expansion plans are supported by up to $6.4 billion of U.S. CHIPS Act grants and a 35% investment tax credit:

• Idaho: two leading-edge DRAM fabs in Boise. First wafer output from the first fab is now projected for mid-calendar 2027. Construction of the second starts in 2026, with initial output by late calendar 2028.
• New York: up to four DRAM fabs in Clay over 20-plus years. Ground was broken on the first in January 2026, for supply in 2030 and beyond.
• Virginia: a modernization of the Manassas fab.
• Abroad: an HBM advanced-packaging facility and a new NAND wafer fab in Singapore; DRAM/HBM expansion in Taiwan, including the Tongluo fab bought in March 2026; EUV modernization in Hiroshima, Japan; and an assembly and test plant in Gujarat, India, which has started commercial shipments.

The company had about 53,000 employees at August 28, 2025.

Risk factors

Source: fiscal 2025 Form 10-K, accession 0000723125-25-000028, Item 1A; updates from the fiscal Q3 2026 Form 10-Q, accession 0000723125-26-000015, Part II Item 1A.

Price volatility is the core risk. Over the past five fiscal years, annual DRAM ASP changes have ranged from an increase in the low-40% range to a decrease in the high-40% range. For NAND, the range is an increase in the low-30% range to a decrease in the low-50% range. In some past periods, ASPs fell below manufacturing cost. In fiscal 2023, falling ASPs led to $1.83 billion of charges to write inventory down to net realizable value. The 10-Q notes that DRAM ASPs rose about 140% and NAND ASPs about 130% in the first nine months of fiscal 2026 compared with a year earlier. The 10-K estimates that a 5% fall in future ASPs would have changed the net realizable value of finished goods and work-in-process inventory by about $750 million.

Supply–demand misalignment and AI dependence. AI-driven demand is new and evolving fast, and its timing is hard to forecast. The fiscal Q3 2026 10-Q added several warnings:

• Sustained high memory prices may lead customers to redesign products to use less memory, or to switch to other technologies.
• When demand exceeds supply, Micron must make allocation decisions that may strain customer relationships and draw legal or regulatory attention.
• HBM uses more wafers and cleanroom space per bit than conventional DRAM. If HBM demand weakens and the industry shifts that capacity back to conventional DRAM, the result could be oversupply.
• About one-half of revenue now depends on the data center market. Data center build-outs need energy, water and capital, and any shortage, local opposition or delay could hit Micron's revenue.

Strategic customer agreements cut both ways (new in the 10-Q). The multi-year take-or-pay agreements carry contractual obligations and customer deposits. Failing to perform could bring damages. The agreements could also limit Micron's flexibility to respond to market changes. If customers miss their commitments, enforcing them could mean litigation.

Geopolitics and trade. The risks include:

• the CAC ban in China;
• U.S. export restrictions on certain customers and AI-related products;
• concentration of DRAM output in Taiwan;
• China's dominance of rare-earth supply;
• the Section 232 semiconductor import investigation opened April 14, 2025, and new Section 301 trade investigations announced February 20, 2026 (added in the 10-Q), either of which could bring tariffs.

Capacity expansion execution. The fab build-outs in Idaho, New York, Singapore, Taiwan, Japan and India are multi-year projects. They depend on scarce construction talent, specialized equipment (sometimes from a single photolithography supplier), permits, and government incentives. Those incentives can be reduced, terminated or clawed back if milestones are missed.

Competition. Rivals include larger conglomerates and Chinese state-backed entrants (CXMT, YMTC). Industry-wide capacity additions could push ASPs down.

Intellectual property and litigation. Patent suits cover "substantially all" of Micron's DRAM, NAND and other products. They include Netlist's actions, where a May 2024 jury verdict of $445 million is under appeal and the U.S. Patent Office has found the asserted claims unpatentable. They also include a series of YMTC suits in U.S., Chinese, U.K. and German courts. The 10-Q added antitrust/competition claims to the list of possible disputes.

Tax. Singapore implemented the Pillar Two 15% minimum tax from fiscal 2026. It largely offsets the benefit of Micron's Singapore tax incentives, which cut the fiscal 2025 tax provision by $1.05 billion. The 10-K guided to an effective tax rate in the mid-to-high teens from fiscal 2026. The impact of the U.S. One Big Beautiful Bill Act (enacted July 4, 2025) is still uncertain.

Other risks: cyberattacks; product defects in safety-critical uses such as automotive; dependence on a few suppliers; the cost of meeting sustainability goals; retaining talent; and volatility in the stock price, buybacks and dividends.

Management's discussion, fiscal 2025

Source: fiscal 2025 Form 10-K, accession 0000723125-25-000028, Item 7.

Results. Revenue rose 49% to $37.38 billion, from $25.11 billion in fiscal 2024. Gross margin widened to 40% from 22%. Operating income was $9.77 billion, against $1.30 billion, and net income was $8.54 billion, against $778 million. Fiscal 2023, the trough of the last downturn, had revenue of $15.54 billion, a negative 9% gross margin and a net loss of $5.83 billion.

Drivers. Management said AI-driven demand was "outpacing industry supply."

• DRAM sales rose 62%, on a low-40% range increase in ASPs and a mid-teens percentage increase in bit shipments.
• Micron moved DRAM supply toward data center and hyperscale customers, with an emphasis on HBM. HBM3E 12-high was the majority of HBM shipments in Q4, and HBM4 samples went to key customers.
• NAND sales rose 18% on a high-teen percentage increase in bit shipments. NAND gross margin improved on cost reductions.
• DRAM margin gains came from higher ASPs, a richer mix including HBM, and node cost-downs. Fiscal 2025 was the first year of 1-gamma (EUV) DRAM shipments.

By segment:

CMBU grew on HBM, high-capacity DIMMs and low-power server DRAM. MCBU was held back because its supply was diverted to higher-value segments. AEBU faced legacy-product price pressure.

Expenses and tax. R&D rose 11% and SG&A rose 7%. Net interest turned positive because more interest was capitalized on fab construction. Singapore tax incentives cut the tax provision by $1.05 billion, or $0.93 per diluted share.

Liquidity and capital.

• Cash and marketable investments were $11.94 billion at year-end. Debt carrying value was $14.58 billion, and $3.50 billion was available under the revolving credit facility.
• Capital expenditures were $15.86 billion, offset by $2.01 billion of government incentive proceeds.
• Micron repaid $4.62 billion of debt, including several prepayments, and issued about $4.43 billion of new notes and term loans.
• Dividends paid totaled $522 million. There were no buybacks in fiscal 2025; cumulative repurchases under the $10 billion authorization reached $7.19 billion.
• Management set about $4.5 billion of net capex for fiscal Q1 2026 as a quarterly baseline.
• After year-end, Micron finalized a new Japanese government incentive of up to ¥500 billion (about $3.4 billion) to modernize its Hiroshima fab.

Current quarter, fiscal Q3 2026 (ended May 28, 2026)

Source: Form 10-Q for the quarter ended May 28, 2026, accession 0000723125-26-000015 (Part I Items 1–2); outlook and non-GAAP cash-flow measures from the fiscal Q3 2026 earnings release furnished as Exhibit 99.1 to Form 8-K, accession 0000723125-26-000013.

What changed. Memory pricing kept surging. In the 10-Q, management says AI-driven data center demand has grown "at a rate greater than our ability and the industry's ability to increase supply." Micron is now making supply-allocation decisions that may affect some customers and end markets.

Headline results:

• Revenue was $41.46 billion: up 74% from fiscal Q2 ($23.86 billion) and up 346% from a year earlier ($9.30 billion).
  • DRAM was $31.33 billion, up 67% quarter on quarter on a low-60% range ASP increase and low-single-digit bit growth.
  • NAND was $9.94 billion, up 99% quarter on quarter on a mid-80% range ASP increase and mid-single-digit bit growth.
• Gross margin was 85%, against 74% in fiscal Q2 and 38% a year earlier. The gain came mainly from higher ASPs, helped by execution and mix.
• Operating income was $33.32 billion (80% of revenue). Net income was $28.24 billion, or $24.67 per diluted share.
• The effective tax rate was 15.0%, up from 11.1% a year earlier, mainly because of Pillar Two.
• First nine months: revenue $78.96 billion (+203%), net income $47.27 billion ($41.40 per diluted share).

By segment: every business unit grew on price, and operating margins ranged from 75% to 86%.

Strategic customer agreements. In fiscal Q3 and Q4, Micron began signing multi-year take-or-pay agreements with binding volume commitments.

• Pricing: most agreements carry fixed pricing or a floor-and-ceiling band. In the largest agreements, the ceiling for existing products is roughly the market price of the second calendar quarter of 2026. A minority of agreements float with the market.
• Margins: management expects agreements with price bands to yield gross margins "well above our peak quarterly margins in any past cycle," even at floor prices.
• Deposits: for agreements concluded by the 10-Q date, including some signed after May 28, 2026, Micron expects $22 billion of customer deposits and related financial commitments, about $18 billion of it in cash.
• Disclosed obligations: at May 28, 2026, remaining performance obligations were about $5 billion. That figure counts minimum volumes at minimum prices and excludes floating-price agreements. Of it, $422 million was already held as contract liabilities.

Balance sheet and cash:

• Nine-month operating cash flow was $45.70 billion, against $11.80 billion a year earlier. The 10-Q presents cash flows for the nine months only. For the quarter alone, the earnings release reports operating cash flow of $25.39 billion, net capex of $7.08 billion and adjusted free cash flow of $18.30 billion; the last two are non-GAAP measures.
• Cash and marketable investments reached $30.13 billion.
• Debt carrying value fell to $5.72 billion, from $14.58 billion at fiscal 2025 year-end. In the first nine months, Micron prepaid $8.51 billion of principal. It retired the 2028 Notes, 2029 A and B Notes, 2029 Term Loan A and 2030 Notes in full. Through cash tender offers settled April 3, 2026, it also bought back most of the outstanding 2031 Notes, 5.650% 2032 Notes, 2033 A and B Notes, and 2035 A and B Notes. The 2.703% 2032 Green Bonds were not part of the tender. Prepayment losses were $323 million in the quarter and $500 million year to date.
• On May 6, 2026, Micron cut its revolving credit facility from $3.50 billion to $2.00 billion. Nothing was drawn.
• Capital returns: Micron repurchased 2.5 million shares for $650 million in the nine months, none in Q3; $2.16 billion of authorization remains. The quarterly dividend was raised to $0.15 from $0.115.

Capacity.

• In March 2026, Micron completed the acquisition of a wafer fab in Tongluo, Miaoli County, Taiwan, from Powerchip Semiconductor Manufacturing Corporation for $1.8 billion in cash. Meaningful shipments from the existing fab are expected from mid-calendar 2027, and construction of a second cleanroom has begun.
• Fiscal 2026 net capex is estimated at about $27 billion.
• Singapore finalized incentive arrangements for manufacturing (November 19, 2025) and R&D (April 17, 2026) expansions.

Legal developments in the quarter:

• A German appeals court affirmed the invalidity of one Netlist patent (May 21, 2026).
• The securities class action was voluntarily dismissed (April 3, 2026), and the related derivative suits were dismissed.
• Nextech Semiconductor filed a six-patent suit (March 6, 2026).
• A petition in New York state court (January 16, 2026) challenges the environmental review for the Clay, New York fab project.

Outlook given for fiscal Q4 2026 (14-week quarter):

• revenue of $50.0 billion ± $1.0 billion;
• gross margin of about 86%;
• GAAP diluted EPS of $30.73 ± $1.00 (non-GAAP $31.00 ± $1.00).

Subsequent events

Source: fiscal Q3 2026 Form 10-Q, accession 0000723125-26-000015 (Notes 4, 11 and 14, and MD&A Liquidity); Forms 8-K filed after the quarter as cited.

Disclosed in the 10-Q as occurring after May 28, 2026:

• Strategic investment in an AI company. After quarter-end, Micron bought non-marketable equity securities in "a leading AI company." The 10-Q names neither the company nor the amount. The full-year cash flow statement in the fiscal Q4 earnings release shows $1.05 billion of purchases of non-marketable equity securities in fiscal 2026, against $34 million in fiscal 2025. It does not break that total out by investee.
• More strategic customer agreements. Micron signed further take-or-pay strategic customer agreements after quarter-end. They are included in the $22 billion of expected deposits and financial commitments described above.
• Dividend. On June 24, 2026, the board declared a $0.15 per share quarterly dividend, payable July 21, 2026.

From the Form 8-K of August 26, 2026 (accession 0001104659-26-101067):

• Executive appointments. Manish Bhatia, previously Executive Vice President, Global Operations, was appointed President and Chief Operating Officer, and Dr. Scott DeBoer, previously Executive Vice President, Chief Technology and Products Officer, was appointed President and Chief Technology and Products Officer, both effective immediately. Sumit Sadana moved from Executive Vice President and Chief Business Officer to Senior Advisor to the CEO.

From the fiscal Q4 and full-year 2026 earnings release (September 30, 2026; Form 8-K accession 0000723125-26-000018, Exhibit 99.1):

• Fiscal Q4 2026 results. Revenue for the 14-week quarter ended September 3, 2026 was $54.23 billion, against the outlook of $50.0 billion ± $1.0 billion; GAAP diluted EPS was $32.87, against the outlook of $30.73 ± $1.00.
• Customer deposits. The fiscal 2026 cash flow statement shows $12.75 billion of proceeds from customer contract liability deposits. Noncurrent customer contract liabilities were $12.90 billion at September 3, 2026.
• Patent license charges. Fiscal Q4 2026 included $500 million of patent license charges, recorded in operating expenses and excluded from non-GAAP results. The release does not name the counterparty or the patents.

The 10-Q discloses no post-quarter acquisitions, divestitures or new borrowings. The September 30, 2026 release contains none either; its fiscal 2026 cash flow statement shows no debt issued.