01—Abstract
Summary
Summary of the 10-K filed October 27, 2015. Cited figures are marked; the original filing is the authoritative source.
Micron Technology, Inc. reported net sales of $16.19 billiona for the fiscal year ended September 3, 2015, a slight decrease from the previous year.
The company's gross margin was 32%b, down from 33% in 2014, primarily due to declines in average selling prices for its memory products, which outpaced manufacturing cost reductions. The company is navigating a highly competitive semiconductor memory market, facing pressure from significant price declines.
To address this, Micron is focusing on technological advancements, including the development of 3D NAND Flash and 3D XPoint™ memory, and leveraging strategic partnerships like the IMFT joint venture with Intel. Despite the challenging market conditions, Micron reported a net income of $2.9 billionc for the fiscal year, demonstrating resilience and continued investment in its product roadmap and manufacturing capabilities.
02—Key points
Key Highlights
- Net sales for fiscal year 2015 were $16.19 billion, a slight decrease from $16.36 billion in 2014.
- Gross margin decreased to 32% in 2015 from 33% in 2014, primarily due to lower average selling prices outstripping manufacturing cost reductions.
- The company is actively investing in next-generation technologies, including 3D NAND Flash and 3D XPoint™ memory, indicating a focus on future product development.
- Micron operates through four business segments: Compute and Networking (CNBU), Mobile (MBU), Storage (SBU), and Embedded (EBU), with CNBU being the largest segment by revenue.
- The company faces intense competition, with significant price declines impacting its memory products, a key risk factor highlighted in the report.
- Micron's financial results were significantly influenced by the acquisition of Elpida (MMJ) in 2013, which increased its manufacturing capacity and product diversity.
- Significant R&D expenses were incurred, totaling $1.54 billion in 2015, reflecting continued investment in innovation and process technology.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2015, Micron Technology Inc kept $0.18.
- Revenue$16.19B100.0%
- Cost of revenue−$10.98B67.8%
- Gross profit$5.21B32.2%
- Operating costs−$2.22B13.7%
- Operating income$3.00B18.5%
- Interest, other & tax−$99.0M0.6%
- Net income$2.90B17.9%
Where FY2015 revenue went
$16.19B- Cost of revenue: $10.98B, 68% of revenue
- Net income: $2.90B, 18% of revenue
- R&D: $1.54B, 9.5% of revenue
- SG&A: $719.0M, 4.4% of revenue
- Interest, other & tax: $99.0M, 0.6% of revenue
Kept 18% as net incomeInterest, other & tax $99.0M · 0.6%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2015filed October 27, 2015Financial Statements
FY2015 against FY2014
| Line item | FY2015FY2014 | Change |
|---|---|---|
| Revenue | $16.19B$16.36B | −1.0% |
| Cost of Revenue | $10.98B$10.92B | +0.5% |
| Gross Profit | $5.21B$5.44B | −4.1% |
| R&D Expenses | $1.54B$1.37B | +12.3% |
| SG&A Expenses | $719.00M$707.00M | +1.7% |
| Operating Income | $3.00B$3.09B | −2.9% |
| Interest Expense | $371.00M$352.00M | +5.4% |
| Net Income | $2.90B$3.04B | −4.8% |
| EPS (Basic) | $2.71$2.87 | −5.6% |
| EPS (Diluted) | $2.47$2.54 | −2.8% |
| Shares Outstanding (Basic) | 1.07B1.06B | +0.9% |
| Shares Outstanding (Diluted) | 1.17B1.20B | −2.3% |
05—Questions
Frequently Asked Questions
What were Micron's primary revenue drivers in fiscal year 2015?
Micron's primary revenue driver was DRAM products, accounting for 64% of total net sales. Non-Volatile Memory, primarily NAND Flash, represented 33% of net sales. The Compute and Networking Business Unit (CNBU) was the largest segment, contributing 42% of net sales, driven by DRAM products.
What are the key risks highlighted by Micron in this filing?
Key risks include dramatic declines in average selling prices for memory products, the ability to maintain or improve gross margins amidst increasing manufacturing complexity and transition to new process technologies, and intense competition from larger players. The company also highlighted risks associated with debt obligations, potential disruptions in manufacturing processes, and risks related to its joint ventures and international operations.
What technological advancements is Micron pursuing?
Micron is significantly investing in and developing new memory technologies, notably 3D NAND Flash, which stacks layers of data storage cells for higher capacity and efficiency, and 3D XPoint™ memory, a new class of non-volatile memory with an innovative cross-point architecture aimed at fast and efficient read/write processes. The company is also transitioning to smaller line-width process technologies for its DRAM products.
How did the acquisition of Elpida (MMJ) impact Micron's business?
The acquisition of Elpida (MMJ) in July 2013 significantly increased Micron's manufacturing scale and product diversity. It added a 300mm DRAM wafer fabrication facility in Japan, another in Taiwan, and an assembly and test facility in Japan, contributing approximately 30% to Micron's total wafer capacity. The acquired operations primarily supported the Mobile Business Unit (MBU) and Compute and Networking Business Unit (CNBU).
06—Continue