Micron Technology 10-Q 2023-03-02

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)
☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 2, 2023

OR

☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 1-10658

Micron Technology, Inc.

(Exact name of registrant as specified in its charter)

Delaware												75-1618004
(State or other jurisdiction of incorporation or organization)												(I.R.S. Employer Identification No.)
8000 S. Federal Way, Boise, Idaho												83716-9632
(Address of principal executive offices)												(Zip Code)
(Registrant’s telephone number, including area code)												(208) 368-4000
Securities registered pursuant to Section 12(b) of the Act:
Title of each class						Trading Symbol						Name of each exchange on which registered
Common Stock, par value $0.10 per share						MU						Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.															Yes			☒			No			☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).															Yes			☒			No			☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer			Accelerated Filer			Non-Accelerated Filer			Smaller Reporting Company			Emerging Growth Company
☒			☐			☐			☐			☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.																								☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).															Yes			☐			No			☒

The number of outstanding shares of the registrant’s common stock as of March 23, 2023 was 1,094,394,354.

Table of Contents

Introduction						3
PART I. Financial Information
Item 1.			Financial Statements:			5
			Consolidated Statements of Operations			5
			Consolidated Statements of Comprehensive Income (Loss)			6
			Consolidated Balance Sheets			7
			Consolidated Statements of Changes in Equity			8
			Consolidated Statements of Cash Flows			10
			Notes to Consolidated Financial Statements			11
Item 2.			Management’s Discussion and Analysis of Financial Condition and Results of Operations			31
			Results of Operations			33
			Liquidity and Capital Resources			36
Item 3.			Quantitative and Qualitative Disclosures about Market Risk			40
Item 4.			Controls and Procedures			40
PART II. Other Information
Item 1.			Legal Proceedings			40
Item 1A.			Risk Factors			41
Item 2.			Unregistered Sales of Equity Securities and Use of Proceeds			60
Item 5.			Other Information			60
Item 6.			Exhibits			62
Signatures						63

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Definitions of Commonly Used Terms

As used herein, “we,” “our,” “us,” and similar terms include Micron Technology, Inc. and its consolidated subsidiaries, unless the context indicates otherwise. Abbreviations, terms, or acronyms are commonly used or found in multiple locations throughout this report and include the following:

Term			Definition						Term			Definition
2023 Notes			2.497% Senior Notes due April 2023, repaid November 2021						DDR			Double data rate DRAM
2024 Notes			4.640% Senior Notes due February 2024, repaid November 2021						EBITDA			Earnings before interest, taxes, depreciation, and amortization
2024 Term Loan A			Senior Term Loan A due October 2024						ESG			Environmental, social, and governance
2025 Term Loan A			Senior Term Loan A due November 2025						EUV			Extreme ultraviolet lithography
2026 Term Loan A			Senior Term Loan A due November 2026						GDDR			Graphics double data rate
2027 Term Loan A			Senior Term Loan A due November 2027						HBM			High-bandwidth memory, a stacked DRAM technology optimized for memory-bandwidth intensive applications
2026 Notes			4.975% Senior Notes due February 2026						Inotera			Inotera Memories, Inc.
2027 Notes			4.185% Senior Notes due February 2027						LIBOR			London Interbank Offered Rate
2029 A Notes			5.327% Senior Notes due February 2029						LPDRAM			Low-power DRAM
2029 B Notes			6.750% Senior Notes due November 2029						MCP			Multichip packaged solutions with managed NAND and LPDRAM
2030 Notes			4.663% Senior Notes due February 2030						Micron			Micron Technology, Inc. (Parent Company)
2032 Green Bonds			2.703% Senior Notes due April 2032						Qimonda			Qimonda AG
2033 Notes			5.875% Senior Notes due February 2033						Revolving Credit Facility			$2.5 billion Revolving Credit Facility due May 2026
2041 Notes			3.366% Senior Notes due November 2041						SOFR			Secured Overnight Financing Rate
2051 Notes			3.477% Senior Notes due November 2051						SSD			Solid state drive

We are an industry leader in innovative memory and storage solutions transforming how the world uses information to enrich life for all. With a relentless focus on our customers, technology leadership, and manufacturing and operational excellence, Micron delivers a rich portfolio of high-performance DRAM, NAND, and NOR memory and storage products through our Micron® and Crucial® brands. Every day, the innovations that our people create fuel the data economy, enabling advances in artificial intelligence and 5G applications that unleash opportunities — from the data center to the intelligent edge and across the client and mobile user experience.

Micron, Crucial, any associated logos, and all other Micron trademarks are the property of Micron. Other product names or trademarks that are not owned by Micron are for identification purposes only and may be the trademarks of their respective owners.

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Available Information

Investors and others should note that we announce material financial information about our business and products through a variety of means, including our investor relations website (investors.micron.com), filings with the U.S. Securities and Exchange Commission (“SEC”), press releases, public conference calls, blog posts (micron.com/about/blog), and webcasts. We use these channels to achieve broad, non-exclusionary distribution of information to the public and for complying with our disclosure obligations under Regulation FD. Therefore, we encourage investors, the media, and others interested in our company to review the information we post on such channels.

Forward-Looking Statements

This Form 10-Q contains trend information and other forward-looking statements that involve a number of risks and uncertainties. Such forward-looking statements may be identified by words such as "anticipate," "expect," "intend," "pledge," "committed," "plan," "opportunities," "future," "believe," "target," "on track," "estimate," "continue," "likely," "may," "will," "would," "should," "could," and variations of such words and similar expressions. However, the absence of these words or similar expressions does not mean that a statement is not forward-looking. Specific forward-looking statements include, but are not limited to, statements such as those made regarding restructure plans and expected related savings and charges; market conditions and profitability in our industry; potential write-downs of inventories in future quarters; reductions in our wafer starts and the corresponding impact on our costs in 2023; the timing for construction and ramping of production for new memory manufacturing fabs in the United States; the receipt of government grants and investment tax credits; the sufficiency of our cash and investments; capital spending in 2023; funding of sustainability-focused projects; and allocation and dispersal of the net proceeds of our 2032 Green Bonds. Our actual results could differ materially from our historical results and those discussed in the forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, those identified in “Part II. Other Information – Item 1A. Risk Factors.”

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PART I. FINANCIAL INFORMATION

Micron Technology, Inc.

Consolidated Statements of Operations

(In millions, except per share amounts)

(Unaudited)

			Quarter ended									Six months ended
			March 2, 2023			March 3, 2022						March 2, 2023			March 3, 2022
Revenue			$	3,693		$	7,786					$	7,778		$	15,473
Cost of goods sold			4,899			4,110						8,091			8,232
Gross margin			(1,206)			3,676						(313)			7,241
Research and development			788			792						1,637			1,504
Selling, general, and administrative			231			263						482			522
Restructure and asset impairments			86			5						99			43
Other operating (income) expense, net			(8)			70						(19)			(5)
Operating income (loss)			(2,303)			2,546						(2,512)			5,177
Interest income			119			12						207			22
Interest expense			(89)			(55)						(140)			(100)
Other non-operating income (expense), net			2			6						(2)			(69)
			(2,271)			2,509						(2,447)			5,030
Income tax (provision) benefit			(54)			(255)						(62)			(474)
Equity in net income (loss) of equity method investees			13			9						2			13
Net income (loss)			$	(2,312)		$	2,263					$	(2,507)		$	4,569
Earnings (loss) per share
Basic			$	(2.12)		$	2.02					$	(2.30)		$	4.08
Diluted			(2.12)			2.00						(2.30)			4.04
Number of shares used in per share calculations
Basic			1,091			1,119						1,091			1,119
Diluted			1,091			1,130						1,091			1,130

See accompanying notes to consolidated financial statements.

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Micron Technology, Inc.

Consolidated Statements of Comprehensive Income (Loss)

(In millions)

(Unaudited)

			Quarter ended									Six months ended
			March 2, 2023			March 3, 2022						March 2, 2023			March 3, 2022
Net income (loss)			$	(2,312)		$	2,263					$	(2,507)		$	4,569
Other comprehensive income (loss), net of tax
Gains (losses) on derivative instruments			92			(34)						200			(120)
Gains (losses) on investments			7			(13)						(12)			(20)
Foreign currency translation adjustments			1			1						(2)			1
Pension liability adjustments			—			(1)						1			(1)
Other comprehensive income (loss)			100			(47)						187			(140)
Total comprehensive income (loss)			$	(2,212)		$	2,216					$	(2,320)		$	4,429

See accompanying notes to consolidated financial statements.

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Micron Technology, Inc.

Consolidated Balance Sheets

(In millions, except par value amounts)

(Unaudited)

As of			March 2, 2023			September 1, 2022
Assets
Cash and equivalents			$	9,798		$	8,262
Short-term investments			1,020			1,069
Receivables			2,278			5,130
Inventories			8,129			6,663
Other current assets			673			657
Total current assets			21,898			21,781
Long-term marketable investments			1,212			1,647
Property, plant, and equipment			39,085			38,549
Operating lease right-of-use assets			673			678
Intangible assets			410			421
Deferred tax assets			697			702
Goodwill			1,228			1,228
Other noncurrent assets			1,317			1,277
Total assets			$	66,520		$	66,283
Liabilities and equity
Accounts payable and accrued expenses			$	4,310		$	6,090
Current debt			237			103
Other current liabilities			708			1,346
Total current liabilities			5,255			7,539
Long-term debt			12,037			6,803
Noncurrent operating lease liabilities			610			610
Noncurrent unearned government incentives			529			589
Other noncurrent liabilities			832			835
Total liabilities			19,263			16,376
Commitments and contingencies
Shareholders’ equity
Common stock, $0.10 par value, 3,000 shares authorized, 1,235 shares issued and 1,094 outstanding (1,226 shares issued and 1,094 outstanding as of September 1, 2022)			123			123
Additional capital			10,633			10,197
Retained earnings			44,426			47,274
Treasury stock, 141 shares held (132 shares as of September 1, 2022)			(7,552)			(7,127)
Accumulated other comprehensive income (loss)			(373)			(560)
Total equity			47,257			49,907
Total liabilities and equity			$	66,520		$	66,283

See accompanying notes to consolidated financial statements.

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Micron Technology, Inc.

Consolidated Statements of Changes in Equity

(In millions, except per share amounts)

(Unaudited)

			Common Stock						Additional Capital			Retained Earnings			**Treasury Stock

Showing the first 8K of 84K characters. Open the full section

This discussion should be read in conjunction with the consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended September 1, 2022. All period references are to our fiscal periods unless otherwise indicated. Our fiscal year is the 52 or 53-week period ending on the Thursday closest to August 31. Fiscal years 2023 and 2022 each contain 52 weeks. All tabular dollar amounts are in millions, except per share amounts.

Overview

We are an industry leader in innovative memory and storage solutions transforming how the world uses information to enrich life for all. With a relentless focus on our customers, technology leadership, and manufacturing and operational excellence, Micron delivers a rich portfolio of high-performance DRAM, NAND, and NOR memory and storage products through our Micron® and Crucial® brands. Every day, the innovations that our people create fuel the data economy, enabling advances in artificial intelligence and 5G applications that unleash opportunities — from the data center to the intelligent edge and across the client and mobile user experience.

We manufacture our products at wholly-owned facilities and also utilize subcontractors for certain manufacturing processes. Our global network of manufacturing centers of excellence not only allows us to benefit from scale while streamlining processes and operations, but it also brings together some of the world’s brightest talent to work on the most advanced memory technology. Centers of excellence bring expertise together in one location, providing an efficient support structure for end-to-end manufacturing, with quicker cycle times, in partnership with teams such as research and development (“R&D”), product engineering, human resources, procurement, and supply chain. For our locations in Singapore and Taiwan, this is also a combination of bringing fabrication and back-end manufacturing together. We make significant investments to develop proprietary product and process technology, which generally increases bit density per wafer and reduces per-bit manufacturing costs of each generation of product. We continue to introduce new generations of products that offer improved performance characteristics, including higher data transfer rates, advanced packaging solutions, lower power consumption, improved read/write reliability, and increased memory density.

We face intense competition in the semiconductor memory and storage markets and to remain competitive we must continuously develop and implement new products and technologies and decrease manufacturing costs in spite of ongoing inflationary cost pressures. Our success is largely dependent on obtaining returns on our R&D investments, efficient utilization of our manufacturing infrastructure, development and integration of advanced product and process technologies, market acceptance of our diversified portfolio of semiconductor-based memory and storage solutions, and efficient capital spending.

Product Technologies

Our product portfolio of memory and storage solutions, advanced solutions, and storage platforms is based on our high-performance semiconductor memory and storage technologies, including DRAM, NAND, and NOR. We sell our products into various markets through our business units in numerous forms, including components, modules, SSDs, managed NAND, MCPs, and wafers. Our system-level solutions, including SSDs and managed NAND, combine NAND, a controller, firmware, and in some cases DRAM.

DRAM: DRAM products are dynamic random access memory semiconductor devices with low latency that provide high-speed data retrieval with a variety of performance characteristics. DRAM products lose content when power is turned off (“volatile”) and are most commonly used in client, cloud server, enterprise, networking, graphics, industrial, and automotive markets. LPDRAM products, which are engineered to meet standards for performance and power consumption, are sold into smartphone and other mobile-device markets (including client markets for Chromebooks and notebook PCs), as well as into the automotive, industrial, and consumer markets.

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NAND: NAND products are non-volatile, re-writeable semiconductor storage devices that provide high-capacity, low-cost storage with a variety of performance characteristics. NAND is used in SSDs for the enterprise and cloud, client, and consumer markets and in removable storage markets. Managed NAND is used in smartphones and other mobile devices, and in consumer, automotive, and embedded markets. Low-density NAND is ideal for applications like automotive, surveillance, machine-to-machine, automation, printer, and home networking.

NOR: NOR products are non-volatile re-writable semiconductor memory devices that provide fast read speeds. NOR is most commonly used for reliable code storage (e.g., boot, application, operating system, and execute-in-place code in an embedded system) and for frequently changing small data storage and is ideal for automotive, industrial, and consumer applications.

Industry Conditions

The memory and storage industry environment deteriorated sharply in the fourth quarter of 2022 through the first six months of 2023 due to reduced demand resulting from customer adjustments to lower elevated inventory levels and weak demand in many end markets combined with global and macroeconomic challenges. This led to significant reductions in average selling prices and bit shipments for both DRAM and NAND, as well as declines in revenue across all of our business segments and nearly all our end markets. Due to the challenging pricing environment, we recognized a $1.43 billion charge to write down inventories to their estimated net realizable value in the second quarter of 2023 and we project approximately $500 million of additional write-downs in the third quarter. These projected write-downs, which relate to inventories to be produced in the third quarter, may change significantly. Small changes to price expectations beyond the third quarter could have a substantial positive or negative impact on our expected third quarter inventory write-downs. Further write-downs of inventories in future quarters could occur if the challenging pricing environment persists. Given the challenging pricing environment, elevated levels of inventories for suppliers and customers, and significant supply-demand mismatch, we expect industry profitability will remain challenged throughout calendar 2023.

As a result of these conditions and increases in our inventory levels, we have reduced wafer starts and capital expenditures. We recognized $27 million of period costs from underutilization in the second quarter of 2023 due to wafer start reductions. We estimate approximately $300 million of period costs from underutilization due to wafer start reductions in the second half of 2023. We are also taking significant steps to reduce our costs and operating expenses. These actions include the 2023 Restructure Plan discussed below and additional reductions in external spending, including implementing productivity programs across the business, suspension of our 2023 bonus company-wide, reductions in select product programs, lower discretionary spending, and cuts to 2023 executive salaries across the company.

2023 Restructure Plan

We initiated the 2023 Restructure Plan in response to challenging industry conditions. Under the plan, we expect our headcount reduction to approach 15% by the end of calendar 2023, through a combination of voluntary attrition and personnel reductions. In connection with the plan, we incurred restructure charges of $86 million and $99 million in the second quarter and first six months of 2023, respectively. We expect to incur additional charges of approximately $60 million in the second half of 2023. As of March 2, 2023, we expect to make future cash payments of approximately $120 million in connection with the plan, substantially all of which will be paid in 2023. We expect the plan to be substantially completed by the end of the third quarter of 2023. As a result of the 2023 Restructure Plan, we expect to realize cost savings of approximately $130 million per quarter (approximately 60% in cost of goods sold, 30% in R&D, and 10% in SG&A) starting in the fourth quarter of 2023. Further information on restructure activities can be found in “Item 1. Financial Statements – Notes to Consolidated Financial Statements – Restructure and Asset Impairments.”

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Results of Operations

Consolidated Results

			Second Quarter						First Quarter						Second Quarter						Six months ended
			2023						2023						2022						2023						2022
Revenue			$	3,693		100		%	$	4,085		100		%	$	7,786		100		%	$	7,778		100		%	$	15,473		100		%
Cost of goods sold			4,899			133		%	3,192			78		%	4,110			53		%	8,091			104		%	8,232			53		%
Gross margin			(1,206)			(33)		%	893			22		%	3,676			47		%	(313)			(4)		%	7,241			47		%
Research and development			788			21		%	849			21		%	792			10		%	1,637			21		%	1,504			10		%
Selling, general, and administrative			231			6		%	251			6		%	263			3		%	482			6		%	522			3		%
Restructure and asset impairments			86			2		%	13			—		%	5			—		%	99			1		%	43			—		%
Other operating (income) expense, net			(8)			—		%	(11)			—		%	70			1		%	(19)			—		%	(5)			—		%
Operating income (loss)			(2,303)			(62)		%	(209)			(5)		%	2,546			33		%	(2,512)			(32)		%	5,177			33		%
Interest income (expense), net			30			1		%	37			1		%	(43)			(1)		%	67			1		%	(78)			(1)		%
Other non-operating income (expense), net			2			—		%	(4)			—		%	6			—		%	(2)			—		%	(69)			—		%
Income tax (provision) benefit			(54)			(1)		%	(8)			—		%	(255)			(3)		%	(62)			(1)		%	(474)			(3)		%
Equity in net income (loss) of equity method investees			13			—		%	(11)			—		%	9			—		%	2			—		%	13			—		%
Net income (loss)			$	(2,312)		(63)		%	$	(195)		(5)		%	$	2,263		29		%	$	(2,507)		(32)		%	$	4,569		30		%

Total Revenue: Total revenue for the second quarter and first six months of 2023 decreased significantly relative to the comparative periods described below as a result of the factors described in the “Industry Conditions” section above.

Total revenue for the second quarter of 2023 decreased 10% as compared to the first quarter of 2023 primarily due to decreases in sales of both DRAM and NAND products.

• Sales of DRAM products decreased 4% primarily due to an approximate 20 percent decline in average selling prices partially offset by a mid-teens percent range increase in bit shipments.

• Sales of NAND products decreased 20% primarily due to a mid-20s percent range decline in average selling prices partially offset by a mid-to-high single-digit percent range increase in bit shipments.

Total revenue for the second quarter of 2023 decreased 53% as compared to the second quarter of 2022 primarily due to decreases in sales of both DRAM and NAND products.

• Sales of DRAM products decreased 52% primarily due to a high-40s percent range decline in average selling prices and decreases in bit shipments in the low-teens percent range.

• Sales of NAND products decreased 55% primarily due to a high-40s percent range decline in average selling prices and decreases in bit shipments in the mid-teens percent range.

Total revenue for the first six months of 2023 decreased 50% as compared to the first six months of 2022 primarily due to decreases in both DRAM and NAND sales.

• Sales of DRAM products decreased 51% primarily due to a low-40s percent range decline in average selling prices and decreases in bit shipments in the mid-teens percent range.

• Sales of NAND products decreased 48% primarily due to a high-30s percent range decline in average selling prices and decreases in bit shipments in the high-teens percent range.

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Consolidated Gross Margin**:** Our consolidated gross margin percentage decreased to negative 33% for the second quarter of 2023 from 22% for the first quarter of 2023 primarily due to a $1.43 billion charge to write down inventories to their estimated net realizable value and the declines in average selling prices for both DRAM and NAND. Our consolidated gross margin percentage decreased to negative 33% for the second quarter of 2023 from 47% for the second quarter of 2022 primarily due to the charge to write down inventories and declines in average selling prices for both DRAM and NAND. Our consolidated gross margin percentage decreased to negative 4% for the first six months of 2023 from 47% for the first six months of 2022 primarily due to the charge to write down inventories and declines in average selling prices for both DRAM and NAND.

Revenue by Business Unit

			Second Quarter						First Quarter						Second Quarter						Six months ended
			2023						2023						2022						2023						2022
CNBU			$	1,375		37		%	$	1,746		43		%	$	3,461		44		%	$	3,121		40		%	$	6,867		44		%
MBU			945			26		%	655			16		%	1,875			24		%	1,600			21		%	3,782			24		%
EBU			865			23		%	1,000			24		%	1,277			16		%	1,865			24		%	2,497			16		%
SBU			507			14		%	680			17		%	1,171			15		%	1,187			15		%	2,321			15		%
All Other			1			—		%	4			—		%	2			—		%	5			—		%	6			—		%
			$	3,693					$	4,085					$	7,786					$	7,778					$	15,473

Percentages of total revenue may not total 100% due to rounding.

Changes in revenue for each business unit for the second quarter of 2023 as compared to the first quarter of 2023 were as follows:

• CNBU revenue decreased 21% primarily due to declines in DRAM average selling prices and decreases in bit shipments due to weakened conditions in server markets.

• MBU revenue increased 44% primarily due to increases in bit shipments due to timing of shipments between quarters, partially offset by declines in average selling prices for both DRAM and NAND.

• EBU revenue decreased 14% primarily due to declines in average selling prices for both DRAM and NAND and declines in bit shipments for NAND as a result of weakness in industrial and consumer markets.

• SBU revenue decreased 25% primarily due to declines in average selling prices as a result of challenging NAND market conditions.

Changes in revenue for each business unit for the second quarter and first six months of 2023 as compared to the corresponding periods of 2022 were as follows:

• CNBU revenue decreased 60% and 55%, respectively, primarily due to declines in DRAM average selling prices and decreases in bit shipments.

• MBU revenue decreased 50% and 58%, respectively, primarily due to declines in average selling prices for both DRAM and NAND and decreases in NAND bit shipments.

• EBU revenue decreased 32% and 25%, respectively, primarily due to lower DRAM revenue resulting from declines in DRAM average selling prices and decreases in bit shipments.

• SBU revenue decreased 57% and 49%, respectively, primarily due to declines in average selling prices and decreases in bit shipments for NAND.

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Operating Income (Loss) by Business Unit

			Second Quarter						First Quarter						Second Quarter						Six months ended
			2023						2023						2022						2023						2022
CNBU			$	(35)		(3)		%	$	190		11		%	$	1,562		45		%	$	155		5		%	$	3,086		45		%
MBU			(344)			(36)		%	(195)			(30)		%	588			31		%	(539)			(34)		%	1,212			32		%
EBU			88			10		%	194			19		%	421			33		%	282			15		%	843			34		%
SBU			(357)			(70)		%	(257)			(38)		%	178			15		%	(614)			(52)		%	330			14		%
All Other			1			100		%	3			75		%	1			50		%	4			80		%	4			67		%
			$	(647)					$	(65)					$	2,750					$	(712)					$	5,475

Percentages reflect operating income (loss) as a percentage of revenue for each business unit.

Changes in operating income or loss for each business unit for the second quarter of 2023 as compared to the first quarter of 2023 were as follows:

• CNBU operating income (loss) declined primarily due to declines in average selling prices and lower bit shipments.

• MBU operating loss increased primarily due to declines in average selling prices partially offset by lower R&D costs due to spending optimization.

• EBU operating income decreased primarily due to declines in average selling prices for both DRAM and NAND and declines in bit shipments for NAND.

• SBU operating loss increased primarily due to declines in average selling prices partially offset by lower operating expenses due to spending optimization.

Changes in operating income or loss for each business unit for the second quarter and first six months of 2023 as compared to the corresponding periods of 2022 were as follows:

• CNBU operating income (loss) declined primarily due to declines in average selling prices and lower bit shipments.

• MBU operating income (loss) declined primarily due to declines in average selling prices.

• EBU operating income decreased primarily due to declines in average selling prices and lower bit shipments.

• SBU operating income (loss) declined primarily due to declines in average selling prices and lower bit shipments.

Operating Expenses and Other

Research and Development: R&D expenses vary primarily with the number of development and pre-qualification wafers processed, the cost of advanced equipment dedicated to new product and process development, and personnel costs. Because of the lead times necessary to manufacture our products, we typically begin to process wafers before completion of performance and reliability testing. Development of a product is deemed complete when it is qualified through internal reviews and tests for performance and reliability. R&D expenses can vary significantly depending on the timing of product qualification.

R&D expenses for the second quarter of 2023 were 7% lower as compared to the first quarter of 2023 primarily due to lower volumes of development and prequalification wafers. R&D expenses for the second quarter of 2023 were relatively unchanged compared to the second quarter of 2022 as decreases in employee compensation were offset by higher depreciation expense. R&D expenses for the first six months of 2023 were 9% higher as compared to the first six months of 2022 primarily due to higher volumes of development and prequalification wafers and higher depreciation expense.

Selling, General, and Administrative: SG&A expenses for the second quarter of 2023 were 8% lower as compared to the first quarter of 2023 primarily due to decreases in employee compensation and other incremental decreases across multiple expense categories. SG&A expenses for the second quarter and first six months of 2023 decreased 12% and 8%, respectively, as compared to the corresponding periods of 2022, primarily due to decreases in employee compensation, legal fees, and advertising.

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Restructure and Asset Impairments: See “Item 1. Financial Statements – Notes to Consolidated Financial Statements – Restructure and Asset Impairments” and “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Overview.”

Interest Income (Expense), Net**:** Interest income (expense) for the second quarter of 2023 was relatively unchanged compared to the first quarter of 2023. Interest income (expense) improved for the second quarter and first six months of 2023 as compared to the corresponding periods of 2022, primarily as a result of increases of $107 million and $185 million, respectively, in interest income due to higher interest rates on our cash and investments.

Income Taxes: Our income tax (provision) benefit consisted of the following:

			Second Quarter			First Quarter			Second Quarter			Six months ended
			2023			2023			2022			2023			2022
Income (loss) before taxes			$	(2,271)		$	(176)		$	2,509		$	(2,447)		$	5,030
Income tax (provision) benefit			(54)			(8)			(255)			(62)			(474)
Effective tax rate			(2.4)		%	(4.5)		%	10.2		%	(2.5)		%	9.4		%

The changes in our effective tax rate for the second quarter and first six months of 2023 as compared to the corresponding periods of 2022 were primarily due to pre-tax losses incurred in the first six months of 2023. Despite a consolidated pre-tax loss on a worldwide basis, we have taxes payable in certain geographies due to minimum taxable income reportable in those geographies.

We operate in a number of jurisdictions outside the United States, including Singapore, where we have tax incentive arrangements. These incentives expire, in whole or in part, at various dates through 2034 and are conditional, in part, upon meeting certain business operations and employment thresholds. As a result of a loss before taxes and geographical mix of income, the net benefit from tax incentive arrangements was not material for the first six months of 2023. These arrangements reduced our tax provision by $304 million ($0.27 per diluted share) for the second quarter of 2022 and $594 million ($0.53 per diluted share) for the first six months of 2022.

Other: Further information on other items can be found in “Item 1. Financial Statements – Notes to Consolidated Financial Statements.”

Liquidity and Capital Resources

Our primary sources of liquidity are cash generated from operations and financing obtained from capital markets and financial institutions. Cash generated from operations is highly dependent on selling prices for our products, which can vary significantly from period to period. Cash and marketable investments totaled $12.03 billion as of March 2, 2023, and $10.98 billion as of September 1, 2022. Our cash and investments consist primarily of bank deposits, money market funds, and liquid investment-grade, fixed-income securities, which are diversified among industries and individual issuers. To mitigate credit risk, we invest through high-credit-quality financial institutions and by policy generally limit the concentration of credit exposure by restricting the amount of investments with any single obligor. As of March 2, 2023, $3.53 billion of our cash and marketable investments was held by our foreign subsidiaries.

We continuously evaluate alternatives for efficiently funding our capital expenditures and ongoing operations. We expect, from time to time, to engage in a variety of financing transactions for such purposes, including the issuance of securities. As of March 2, 2023, $2.50 billion was available to draw under our Revolving Credit Facility. On March 27, 2023, we entered into amendments to the Term Loan Agreement and the agreements governing the Revolving Credit Facility and the 2024 Term Loan A to revise the leverage ratio covenant in each such agreement, as further described in “Item 1. Financial Statements – Notes to Consolidated Financial Statements – Debt.” Funding of certain significant capital projects is also dependent on the receipt of government incentives, which are subject to conditions and may not be obtained.

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To develop new product and process technology, support future growth, achieve operating efficiencies, and maintain product quality, we must continue to invest in manufacturing technologies, facilities and equipment, and R&D. We estimate capital expenditures in 2023 for property, plant, and equipment, net of partner contributions, to be approximately $7.0 billion. Actual amounts for 2023 will vary depending on market conditions. As of March 2, 2023, we had purchase obligations of approximately $3.14 billion for the acquisition of property, plant, and equipment, of which approximately $2.26 billion is expected to be paid within one year. For a description of other contractual obligations, such as leases, debt, and commitments, see “Item 1. Financial Statements – Notes to Consolidated Financial Statements – Leases,” “ – Debt,” and “ – Commitments.”

To support expected memory demand in the second half of the decade, we plan to add new DRAM wafer capacity. Following the enactment of the U.S. CHIPS and Science Act of 2022 (“CHIPS Act”), we announced plans to invest in two leading-edge memory manufacturing fabs in the United States, contingent on CHIPS Act support through grants and investment tax credits. As part of this plan, in September 2022, we broke ground on a leading-edge memory manufacturing fab in Boise, Idaho. Construction of the fab is expected to begin in calendar 2023 with DRAM production targeted to start in calendar 2025. In addition, in October 2022, we announced plans to build a second leading-edge DRAM manufacturing fab in Clay, New York. We plan to start site preparation work in calendar 2023 and expect construction to begin in calendar 2024, with production anticipated to ramp in the latter half of the decade. We expect these new fabs to fulfill our requirements for additional wafer capacity starting in the second half of the decade and beyond, in line with industry demand trends.

On November 1, 2021, we issued $1 billion in aggregate principal amount of unsecured 2032 Green Bonds. Over time, we plan to allocate an amount equal to the net proceeds to fund eligible sustainability-focused projects involving renewable energy, green buildings, energy efficiency, water management, waste abatement, and a circular economy. Through November 1, 2022, the date of our 2022 Green Bond Report, we had allocated $676 million toward this commitment. We currently anticipate that 100% of net proceeds of the 2032 Green Bonds will be allocated and dispersed for eligible projects by November 1, 2023.

Our Board of Directors has authorized the discretionary repurchase of up to $10 billion of our outstanding common stock through open-market purchases, block trades, privately-negotiated transactions, derivative transactions, and/or pursuant to Rule 10b5-1 trading plans. The repurchase authorization has no expiration date, does not obligate us to acquire any common stock, and is subject to market conditions and our ongoing determination of the best use of available cash. Through March 2, 2023, we had repurchased an aggregate of $6.89 billion of the authorized amount. See “Item 1. Financial Statements – Notes to Consolidated Financial Statements – Equity.”

On March 28, 2023, our Board of Directors declared a quarterly dividend of $0.115 per share, payable in cash on April 25, 2023, to shareholders of record as of the close of business on April 10, 2023. The declaration and payment of any future cash dividends are at the discretion and subject to the approval of our Board of Directors. Our Board of Directors' decisions regarding the amount and payment of dividends will depend on many factors, including, but not limited to, our financial condition, results of operations, capital requirements, business conditions, debt service obligations, contractual restrictions, industry practice, legal requirements, regulatory constraints, and other factors that our Board of Directors may deem relevant.

We expect that our cash and investments, cash flows from operations, and available financing will be sufficient to meet our requirements at least through the next 12 months and thereafter for the foreseeable future.

Cash Flows

			Six months ended
			2023			2022
Net cash provided by operating activities			$	1,286		$	7,566
Net cash provided by (used for) investing activities			(4,181)			(5,176)
Net cash provided by (used for) financing activities			4,434			(979)
Effect of changes in currency exchange rates on cash, cash equivalents, and restricted cash			9			(16)
Net increase (decrease) in cash, cash equivalents, and restricted cash			$	1,548		$	1,395

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Operating Activities: Cash provided by operating activities reflects net income (loss) adjusted for certain non-cash items, including depreciation expense, amortization of intangible assets, and stock-based compensation, and the effects of changes in operating assets and liabilities. The decrease in cash provided by operating activities for the first six months of 2023 as compared to the first six months of 2022 was primarily due to a net loss in the current quarter adjusted for non-cash items and the effect of lower receivables, partially offset by an increase in inventories and a decline in accounts payable and accrued expenses.

Investing Activities: For the first six months of 2023, net cash used for investing activities consisted primarily of $4.65 billion of expenditures for property, plant, and equipment, partially offset by $480 million of net inflows from maturities, sales, and purchases of available-for-sale securities.

For the first six months of 2022, net cash used for investing activities consisted primarily of $5.88 billion of expenditures for property, plant, and equipment; inflows of $66 million of partner contributions for capital expenditures; $893 million of net inflows from the sale of the Lehi, Utah fab; and $119 million of net outflows from purchases, sales, and maturities of available-for-sale securities.

Financing Activities: For the first six months of 2023, net cash provided by financing activities consisted primarily of $3.20 billion of proceeds from our 2025, 2026, and 2027 Term Loan A borrowings, $1.27 billion from the issuance of the 2029 B Notes, and $749 million from the issuance of the 2033 Notes. See “Item 1. Financial Statements – Notes to Consolidated Financial Statements – Debt.” Cash used for financing activities included $425 million for the acquisition of 8.6 million shares of our common stock under our share repurchase authorization, $252 million of cash payments of dividends to shareholders, and $76 million of payments on equipment purchase contracts.

For the first six months of 2022, net cash used for financing activities included $1.98 billion of repayments of debt primarily to redeem the 2023 Notes and 2024 Notes, $667 million for the acquisition of 8.4 million shares of our common stock under our share repurchase authorization, $224 million of cash payments of dividends to shareholders, and $105 million of payments on equipment purchase contracts. Cash used for financing activities was partially offset by aggregate proceeds of $2.00 billion from the issuance of the unsecured 2032 Green Bonds, 2041 Notes, and 2051 Notes.

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Critical Accounting Estimates

For a discussion of our critical accounting estimates, see “Part II – Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Estimates” of our Annual Report on Form 10-K for the year ended September 1, 2022. Except for the significant accounting estimate associated with inventories as discussed below, there have been no changes to our critical accounting estimates since our Annual Report on Form 10-K for the year ended September 1, 2022.

Inventories**:** Inventories are stated at the lower of cost or net realizable value, with cost being determined on a first-in, first-out (“FIFO”) basis. Cost includes depreciation, labor, material, and overhead costs, including product and process technology costs. Determining net realizable value of inventories involves significant judgments, including projecting future average selling prices, future sales volumes, and estimated costs to complete. To project average selling prices and sales volumes, we review recent sales volumes, existing customer orders, current contract prices, industry analyses of supply and demand, seasonal factors, general economic trends, and other information. Actual selling prices and volumes may vary significantly from projected prices and volumes due to the volatile nature of the semiconductor memory and storage markets. When these analyses reflect estimated net realizable values below our manufacturing costs, we record a charge to cost of goods sold in advance of when inventories are actually sold. As a result, the timing of when product costs are charged to costs of goods sold can vary significantly. Differences in forecasted average selling prices used in calculating lower of cost or net realizable value adjustments can result in significant changes in the estimated net realizable value of product inventories and accordingly the amount of write-down recorded. For example, a 5% variance in the estimated selling prices would have changed the estimated net realizable value of our inventory by approximately $600 million as of March 2, 2023. Due to the volatile nature of the semiconductor memory and storage markets, actual selling prices and volumes often vary significantly from projected prices and volumes; as a result, the timing of when product costs are charged to operations can vary significantly.

U.S. GAAP provides for products to be grouped into categories in order to compare costs to net realizable values. The amount of any inventory write-down can vary significantly depending on the determination of inventory categories. We review the major characteristics of product type and markets in determining the unit of account for which we perform the lower of average cost or net realizable value analysis and categorize all inventories (including DRAM, NAND, and other memory) as a single group.

Recently Adopted Accounting Standards

No material items.

Recently Issued Accounting Standards

No material items.

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We are exposed to interest rate risk related to our indebtedness. As of March 2, 2023 and September 1, 2022, we had fixed-rate debt with an aggregate carrying value of $6.04 billion and $4.03 billion, respectively, and as a result, the fair value of our debt fluctuates with changes in market interest rates. In the first six months of 2023, we issued $2.00 billion principal amount of new fixed-rate debt. We estimate that, as of March 2, 2023 and September 1, 2022, a hypothetical 1% decrease in market interest rates would increase the fair value of our fixed-rate debt by approximately $385 million and $275 million, respectively.

As of March 2, 2023 and September 1, 2022, we had floating-rate debt as well as fixed-rate debt that is swapped to floating-rate debt with an aggregate principal amount of $5.29 billion and $2.09 billion, respectively. In the first six months of 2023, we borrowed $3.20 billion principal amount of new floating-rate debt. We estimate that, as of March 2, 2023 and September 1, 2022, a hypothetical 1% increase in the interest rates of this floating-rate debt would result in an increase in annual interest expense of approximately $53 million and $21 million, respectively.

For further discussion about market risk and sensitivity analysis related to changes in interest rates and currency exchange rates, see “Part II – Item 7A. Quantitative and Qualitative Disclosures About Market Risk” in our Annual Report on Form 10-K for the year ended September 1, 2022.

An evaluation was carried out under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. Based upon that evaluation, the principal executive officer and principal financial officer concluded that those disclosure controls and procedures were effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act are recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including the principal executive officer and principal financial officer, to allow timely decisions regarding disclosure.

During the second quarter of 2023, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

For a discussion of legal proceedings, see “Part I – Item 3. Legal Proceedings” of our Annual Report on Form 10-K for the year ended September 1, 2022, and the sections titled “Part I. Financial Information – Item 1. Financial Statements – Notes to Consolidated Financial Statements – Contingencies” and “Item 1A. Risk Factors” in this Quarterly Report on Form 10-Q, as well as in our Quarterly Report on Form 10-Q for the first quarter of 2023.

SEC regulations require disclosure of certain proceedings related to environmental matters unless we reasonably believe that the related monetary sanctions, if any, will be less than a specified threshold. We use a threshold of $1 million for this purpose.

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In addition to the factors discussed elsewhere in this Form 10-Q, this section discusses important factors which could cause actual results or events to differ materially from those contained in any forward-looking statements made by us. The order of presentation is not necessarily indicative of the level of risk that each factor poses to us. Any of these factors could have a material adverse effect on our business, results of operations, financial condition, or stock price. Our operations could also be affected by other factors that are presently unknown to us or not considered significant.

Risk Factor Summary

Risks Related to Our Business, Operations, and Industry

• volatility in average selling prices of our products;

• our ability to maintain or improve gross margins;

• the highly competitive nature of our industry;

• a downturn in the worldwide economy;

• our ability to develop and produce new and competitive memory and storage technologies and products;

• dependency on specific customers, concentration of revenue with a select number of customers, and customers who are located internationally;

• our international operations, including geopolitical risks;

• limited availability and quality of materials, supplies, and capital equipment and dependency on third-party service providers for ourselves and our customers;

• the effects of the COVID-19 pandemic;

• products that fail to meet specifications, are defective, or are incompatible with end uses;

• disruptions to our manufacturing process from operational issues, natural disasters, or other events;

• breaches of our security systems or products, or those of our customers, suppliers, or business partners;

• attracting, retaining, and motivating highly skilled employees;

• realizing expected returns from capacity expansions;

• achieving or maintaining certain performance or other obligations associated with incentives from various governments;

• acquisitions and/or alliances;

• restructure charges;

• responsible sourcing requirements and related regulations; and

• ESG considerations.

Risks Related to Intellectual Property and Litigation

• protecting our intellectual property and retaining key employees who are knowledgeable of and develop our intellectual property;

• legal proceedings and claims; and

• claims that our products or manufacturing processes infringe or otherwise violate the intellectual property rights of others or failure to obtain or renew license agreements covering such intellectual property.

Risks Related to Laws and Regulations

• compliance with tariffs, trade restrictions, and/or trade regulations;

• tax expense and tax laws in key jurisdictions; and

• compliance with laws, regulations, or industry standards, including ESG considerations.

Risks Related to Capitalization and Financial Markets

• our ability to generate sufficient cash flows or obtain access to external financing;

• our debt obligations;

• changes in foreign currency exchange rates;

• counterparty default risk;

• volatility in the trading price of our common stock; and

• fluctuations in the amount and timing of our common stock repurchases and payment of cash dividends and resulting impacts.

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Risks Related to Our Business, Operations, and Industry

Volatility in average selling prices for our semiconductor memory and storage products may adversely affect our business.

We have experienced significant volatility in our average selling prices and may continue to experience such volatility in the future. For example, average selling prices for both DRAM and NAND declined approximately 40% for the second quarter of 2023 as compared to the fourth quarter of 2022. Since 2017, annual percentage changes in DRAM average selling prices have ranged from approximately plus 35% to minus 35%. Since 2017, annual percentage changes in NAND average selling prices have ranged from nearly flat to approximately minus 50%. In some prior periods, average selling prices for our products have been below our manufacturing costs and we may experience such circumstances in the future. Average selling prices for our products that decline faster than our costs have recently had an adverse effect on our business and results of operations, and could have a material adverse effect on our business, results of operations, or financial condition.

We may be unable to maintain or improve gross margins.

Our gross margins are dependent, in part, upon continuing decreases in per gigabit manufacturing costs achieved through improvements in our manufacturing processes and product designs. Factors that may limit our ability to reduce our per gigabit manufacturing costs at sufficient levels to maintain or improve gross margins include, but are not limited to:

• strategic product diversification decisions affecting product mix;

• increasing complexity of manufacturing processes;

• difficulties in transitioning to smaller line-width process technologies or additional 3D memory layers or NAND cell levels;

• process complexity including number of mask layers and fabrication steps;

• manufacturing yield;

• technological barriers;

• changes in process technologies;

• new products that may require relatively larger die sizes;

• start-up or other costs associated with capacity expansions;

• higher costs of goods and services due to inflationary pressures or market conditions; and

• higher manufacturing costs per gigabit due to fab underutilization.

Many factors may result in a reduction of our output or a delay in ramping production, which could lead to underutilization of our production assets. These factors may include, among others, a weak demand environment, industry oversupply, inventory surpluses, difficulties in ramping emerging technologies, supply chain disruptions, and delays from equipment suppliers. See “Part I. Financial Information – Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Overview – Industry Conditions” for information regarding our current underutilization. A significant portion of our manufacturing costs are fixed and do not vary proportionally with changes in production output. As a result, lower utilization and corresponding increases in our per gigabit manufacturing costs have had, and may continue to have, an adverse effect our gross margins, business, results of operations, or financial condition.

We have a broad portfolio of products to address our customers’ needs, which span multiple market segments and are subject to rapid technological changes. Our manufacturing costs on a per gigabit basis vary across our portfolio as they are largely influenced by the technology node in which the solution was developed. We strive to balance our demand and supply for each technology node, but the dynamics of our markets and our customers can create periods of imbalance, which can lead us to carry elevated inventory levels. Consequently, we may incur charges in connection with obsolete or excess inventories or we may not fully recover our costs, which would reduce our gross margins. For example, in the second quarter of 2023, we recorded a charge of $1.43 billion to write down the carrying value of our inventories to estimated net realizable value. In addition, due to the customized nature of certain of the products we manufacture, we may be unable to sell certain finished goods inventories to alternative customers or manufacture in-process inventory to different specifications, which may result in excess and obsolescence charges in future periods.

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In addition, if we are unable to supply products that meet customer design and performance specific

Showing the first 8K of 85K characters. Open the full section

The information set forth below in this Item 5 is included herein in lieu of reporting on a Current Report on Form 8-K under Item 1.01 Entry into a Material Definitive Agreement.

Amendments to Term Loan Agreement, 2024 Term Loan A, and Revolving Credit Facility.

On March 27, 2023, we entered into amendments to our Term Loan Agreement, 2024 Term Loan A, and Revolving Credit Facility (the “Amendments”). The descriptions of the Amendments below are not intended to be complete and are qualified in their entirety by reference to the full text of the Amendments, copies of which are filed herewith as Exhibits 10.2, 10.3, and 10.4, respectively, and are incorporated herein by reference.

Amendment to Term Loan Agreement

As previously disclosed, on November 3, 2022, we entered into a term loan agreement consisting of three tranches and borrowed $2.60 billion in aggregate principal amount, including $927 million due November 3, 2025; $746 million due November 3, 2026; and $927 million due November 3, 2027 (the “Term Loan Agreement”).

On January 5, 2023, we amended the Term Loan Agreement and borrowed an additional $600 million in aggregate principal amount, including $125 million due November 3, 2025, $250 million due November 3, 2026, and $225 million due November 3, 2027. The additional borrowings have terms that are identical to, and will be treated as a single class with, the three original tranches.

The 2026 Term Loan A and 2027 Term Loan A each require equal quarterly installment payments in an amount equal to 1.25% of the original principal amount. The 2025 Term Loan A does not require quarterly installment payments. Borrowings under the Term Loan Agreement will generally bear interest at adjusted term SOFR plus an applicable interest rate margin ranging from 1.00% to 2.00%, varying by tranche and depending on our corporate credit ratings. The Term Loan Agreement requires us to maintain, on a consolidated basis, a leverage ratio of total indebtedness to adjusted EBITDA, as defined in the Term Loan Agreement and calculated as of the last day of each fiscal quarter, not to exceed 3.25 to 1.00, except as described below.

On March 27, 2023, we further amended the Term Loan Agreement to provide that in lieu of the foregoing leverage ratio, during the fourth quarter of 2023 and each quarter of 2024, we will be required to maintain, on a consolidated basis, a net leverage ratio of total net indebtedness to adjusted EBITDA, as defined in the Term Loan Agreement and calculated as of the last day of each fiscal quarter, not to exceed 3.25 to 1.00, or alternatively, for up to three of such five quarters, we may elect to comply with a requirement of minimum liquidity as defined in the Term Loan Agreement of not less than $5.0 billion. Each of the maximum leverage ratio and net leverage ratio, as applicable, is subject to a temporary four quarter increase in such maximum ratio to 3.75 to 1.00 following certain material acquisitions. Our obligations under the Term Loan Agreement are unsecured.

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Amendment to 2024 Term Loan A

On March 27, 2023, we also amended the agreement governing the 2024 Term Loan A to align the leverage ratio covenant with the corresponding covenant in the Term Loan Agreement described above.

Amendment to Revolving Credit Facility

On March 27, 2023, we amended the agreement governing the Revolving Credit Facility to align the leverage ratio covenant with the corresponding covenants in the Term Loan Agreement and 2024 Term Loan A described above.

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Exhibit Number			Description of Exhibit			Filed Herewith			Form			Period Ending			Exhibit/ Appendix			Filing Date
4.1			Indenture, dated February 6, 2019, by and between Micron Technology, Inc. and U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank National Association), as Trustee						8-K						4.1			2/6/19
4.2			Sixth Supplemental Indenture, dated as of February 9, 2023, by and between Micron Technology, Inc. and U.S. Bank Trust Company, National Association, as Trustee						8-K						4.3			2/9/23
4.3			Form of Note for Micron Technology, Inc.’s 5.875% Senior Notes due 2033 (included in Exhibit 4.2)						8-K						4.5			2/9/23
10.1			Incremental Amendment No. 1, dated as of January 5, 2023, to the Term Loan Credit Agreement, dated as of November 3, 2022, by and among Micron Technology, Inc., as borrower, Wells Fargo Bank, National Association, as administrative agent, and the lenders party thereto			X
10.2			Amendment No. 2 to Term Loan Credit Agreement, dated as of March 27, 2023, by and among Micron Technology, Inc., as borrower, Wells Fargo Bank, National Association, as administrative agent, and the lenders party thereto			X
10.3			Amendment No. 1 to Term Loan Credit Agreement, dated as of March 27, 2023, by and among Micron Technology, Inc., as borrower, Wells Fargo Bank, National Association, as administrative agent, and the lenders party thereto			X
10.4			Amendment No. 1 to Credit Agreement, dated as of March 27, 2023, by and among Micron Technology, Inc., as borrower, HSBC Bank USA, National Association, as administrative agent, and the lenders party thereto			X
10.5*			Form of Consent for Named Executive Officers			X
31.1			Rule 13a-14(a) Certification of Chief Executive Officer			X
31.2			Rule 13a-14(a) Certification of Chief Financial Officer			X
32.1			Certification of Chief Executive Officer Pursuant to 18 U.S.C. 1350			X
32.2			Certification of Chief Financial Officer Pursuant to 18 U.S.C. 1350			X
101.INS			Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document			X
101.SCH			Inline XBRL Taxonomy Extension Schema Document			X
101.CAL			Inline XBRL Taxonomy Extension Calculation Linkbase Document			X
101.DEF			Inline XBRL Taxonomy Extension Definition Linkbase Document			X
101.LAB			Inline XBRL Taxonomy Extension Label Linkbase Document			X
101.PRE			Inline XBRL Taxonomy Extension Presentation Linkbase Document			X
104			Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)			X

• Indicates management contract or compensatory plan or arrangement.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

									Micron Technology, Inc.
									(Registrant)
Date:			March 29, 2023			By:			/s/ Mark Murphy
									Mark Murphy
									Executive Vice President and Chief Financial Officer
									(Principal Financial Officer)
									/s/ Scott Allen
									Scott Allen
									Corporate Vice President and Chief Accounting Officer
									(Principal Accounting Officer)

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