00:00I guess this is, I believe this is the strongest record performance of Micron.
00:06And then looking at the way the share trade, I think going to this earning, I did think
00:11that the biggest risk is investor high expectation.
00:15And then fiscal third quarter guidance is very strong, is way surpassing analyst expectation
00:22and my own expectation as well.
00:24And then gross margin is the strongest in the history of Micron.
00:29And then we are still in the early innings of HBM as like Precious Semiconductors.
00:36So we do have Precious Metals, and then now we have Precious Semiconductors.
00:40So Hendy, then why, I mean, the stock reaction is only up 0.8% of 1%, despite the fact
00:45that
00:45like you said, this is such a record, you know, I think many people would say this was an incredible
00:49beat.
00:50I want to go to the conversation that we were just having with our colleague Romain a few
00:54minutes ago, which is about how much pricing power and how much sort of runway does Micron
01:00have to continue with, to raise prices and to continue to have these margins?
01:06Like how long does that last?
01:08Yeah.
01:09So in terms of pricing power, I think we can start based on the fact that there are only
01:15like three DRAM manufacturer, SK Hynix, Samsung, and Micron.
01:21Okay.
01:21So like structurally, Micron is in good positions.
01:25And then we believe that pricing is now based on quarterly negotiation.
01:32So companies like Micron, they will try to capitalize on the pricing trend.
01:37The pricing trend is still going up at least until the June quarter.
01:44And then companies like Micron will try to balance between taking the pricing advantage and managing
01:53long-term customer relationship while also trying to manage customer diversification as
02:04well.
02:05Yeah.
02:05Yeah.
02:06Right.
02:06Because we do know that in terms of who are their big customers, it's definitely skewed,
02:11is it towards NVIDIA specifically?
02:12NVIDIA is 17%.
02:14It's kind of a lot.
02:16Henny, one thing I want to ask you as the headlines continue to cross, Micron says NAND
02:19demand to stay well above our available supply.
02:23AI, other server demand, constrained by memory supply, and says AI server demand continues to
02:29be strong.
02:30So this is kind of a mixed blessing.
02:32Demand is there, but they're having trouble meeting that demand.
02:35Is that the right read on this?
02:38That's the right read.
02:40And I think what investors should keep in mind is that this calendar year, 2026, all
02:46the memory makers will rely on migration of their process technology.
02:53So in other words, there won't be any new capacity expansion.
02:56And then capacity expansion, we are expecting that to come in 2027.
03:02So I think for the 2026, when companies said that they are sold out on capacity, that will
03:10be indeed true.
03:12And then that will come with favorable pricing as well.
03:15So the company also flicking at this idea that they're going to build out to match expectations
03:21and match demand.
03:22You did say that we're in the early innings of this.
03:25I'm going to get right here.
03:27It says, we are investing in global manufacturing in our global manufacturing footprint to support
03:33their growing demand, referring to customers.
03:35That's the words of Sanjay Mehrotra, the president, chairman, and CEO of Micron.
03:39How long does it take to build that out?
03:42So I think in general, the rule of thumb in the industry is if you have the shell or the
03:49fab buildings and structure, you can expect new capacity within like 6 to 12 months.
04:02And then after that, then you will have to work on the yield optimization.
04:06Okay.
04:07So that is the sort of timeframe that we are looking.
04:10So six months until if the shell is there, they can be up and running and they can actually...
04:15If you have the shell, it can be done as short as like six months.
04:20Yeah.
04:21Yeah.
04:22Well, I guess this is another way of asking.
04:24Look, you said we're in early innings, but we always talk to Ian King who covers chips
04:28for, or semiconductors for Bloomberg News.
04:32And he reminds us this is all cyclical, but we're just trying to figure out where we are
04:35in the cycle.
04:36So where do you think we are in the cycle?
04:38So I still think that we are still in the early innings.
04:43Many major customers, their priority is to secure supply and the pricing is secondary.
04:49And if somehow there's a disruption within one customer, companies have said that they
04:56can find other major takers easily.
05:00And then on the other hand, I do think that it is the best of interest of customers to
05:06secure long-term supply agreement.
05:08Let's say when you build a large AI data centers or when you want to spend on like GPUs, you
05:15want to make sure that you will have supplies of memory chips for you.
05:22Hendy, it's been an interesting week, right?
05:24And I feel like we've talked about a lot of things when it comes to AI and chips and
05:28semiconductors.
05:29Because NVIDIA, of course, its GTC meeting this week, got a read certainly on the AI spend
05:34and build and what's going on.
05:36Here we have Micron.
05:38And of course, Micron, as Tim reminded us, 70% of their business is from NVIDIA.
05:44Is there a read through for you when it comes to that AI spend and build out?
05:49So the AI spending build out, I think it will benefit all the major players.
05:54And then I would also emphasize that all the capital equipment that have major exposure
06:01to DRAM will see a strong year in 2027, driven by like new capacity and then capital spending
06:11on the fab side.
06:14Yeah.
06:14So I'm just curious, would you buy more shares of Micron on this earnings report or are you
06:21waiting for the call?
06:22I'm just curious.
06:22What do you think?
06:25Micron is definitely a strong buy here.
06:28We can see Micron earning about like $40 in this current fiscal year and then growing
06:36to at least like $50.
06:37So if someone wants to apply like 10 to 15 times of price to earnings ratio, there is
06:43still like meaningful upside based on that valuation approach.
06:47All right.
06:48Idris, you think.
06:4915 seconds.
06:49What are you listening for on the call?
06:51What do you need to hear really quickly?
06:53I think like pricing negotiation and then what the latest thought on the capacity expansion,
06:59like how soon new capacity can come to the, to like Micron Fab.
07:04So,
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