Micron Technology, Inc. (MU) announced its fourth-quarter 2026 financial results, with all core metrics exceeding guidance.
The company reported fourth-quarter revenue of $54.23 billion, up 31% sequentially and 379% year-over-year. Non-GAAP gross margin was 87.0%.
Non-GAAP net income was $38.398 billion, with diluted earnings per share (EPS) of $33.42. Operating cash flow was $43.973 billion, and adjusted free cash flow was $33.2 billion. The company ended the quarter with $75.48 billion in cash and marketable securities.
For the full 2026 fiscal year, Micron's revenue soared to $133.188 billion, up 256% year-over-year. DRAM revenue for the year exceeded $100.679 billion.
AI-Driven Business Segments See Strong Growth, Data Center SSD Revenue Nears $10 Billion
AI-driven demand drove all business segments to achieve record highs:
1. Core Data Center Business (CDBU) revenue was $18.002 billion, up 56% sequentially and with a gross margin of 90%. Data center SSD revenue for the quarter approached $10 billion, up more than 10 times year-over-year. The company expects to maintain its data center SSD market share record high for the fifth consecutive year.
2. Cloud Memory Business (CMBU), primarily HBM, reported revenue of $16.283 billion, with a gross margin of 83%. HBM shipments outpaced the company's overall revenue growth. Micron has secured most of its 2027 HBM bit supply and expects a significant price increase year-over-year. The gross margin difference between HBM and ordinary DRAM is narrowing. The company is collaborating with NVIDIA to develop custom NVHBM (HBM4E) for next-generation GPU and NVLink Fusion platforms.
3. Mobile and Client Business (MCBU) revenue was $13.114 billion, with a gross margin of 90%. The company's new-generation 1γ DRAM products accounted for nearly half of this segment's revenue.
4. Automotive and Embedded Business (AEBU) revenue was $6.824 billion, up 47% sequentially. Management is optimistic about the physical AI space, with L4 and above autonomous driving memory demand exceeding 200 GB. Humanoid robot storage demand is benchmarked against high-level autonomous driving, with multiple customers already sampling the company's next-generation storage products.
By product segment, DRAM revenue for the quarter was $39.771 billion, with ASP increasing by double digits sequentially. NAND revenue was $14.102 billion, with ASP up 30% sequentially and bit shipments up 10%.
Handing 32 Billion in Customer Long-Term Contracts! 26 Strategic Lock-Quantity Agreements, with Some Contracts Extended to 2031
Micron disclosed its progress in strategic customer agreements (SCAs): 26 multi-year "take-or-pay" long-term contracts have been signed, with expected revenue exceeding 35% of total revenue by 2030.
The total financial commitment from customers is $32 billion, with most of it being cash deposits. Three-quarters of the long-term contracts have price floors and ceilings, while the remaining portion is subject to market fluctuations. Some contracts have been extended to 2031, with new agreements executed at current market prices. The long-term contracts have stabilized Micron's long-term supply planning and secured production capacity for downstream customers.
Guidance for Next Quarter: Q1 FY2027 Revenue Expected to be $61.5 Billion, Gross Margin at the Low Point of This Year
Micron provided its Q1 FY2027 financial guidance (non-GAAP):
- Revenue: $61.5 billion, with a range of $60.5 billion to $62.5 billion.
- Gross margin: approximately 86.25%, with management indicating that Q1 will be the low point for FY2027, with subsequent quarters seeing a return to higher gross margins.
- Diluted EPS: $38.15, with a range of $37.15 to $39.15, and an effective tax rate of approximately 15.5%.
FY2027 outlook: The company expects revenue to grow sequentially each quarter, setting a new annual record. Operating expenses are expected to increase by approximately $2.5 billion, primarily for AI-related R&D and employee performance incentives. Due to the impact of Q4's employee bonus inventory, cost pressure will be concentrated in Q1 FY2027. The company will pay a dividend of $0.15 per share on October 29.
Industry-Heavy Judgment: Storage Supply-Demand Gap Continues, No Clear Time Frame for Market Rebalancing
Micron's management provided its core judgment on the storage cycle: 2027-2028 will see a continued supply-demand gap in the DRAM and NAND industries, with no clear time frame for market rebalancing.
Even with industry-wide cleanroom expansions and AI-driven incremental demand, structural gaps remain:
- DRAM: 2026 industry bit shipments grew in the double digits; 2027-2028 will see bit shipments grow in the low double digits, with supply remaining constrained.
- NAND: 2026 industry bit shipments grew by 20%+; 2027-2028 will maintain 20%+ growth, with supply unable to meet demand.
- HBM bit shipments will continue to grow significantly faster than ordinary DRAM through 2028.
Global Multiple Points Invest in Expansion, Capital Expenditure Increased, Multiple New Factories to Land Between 2027 and 2030
Facing the tight supply situation, Micron decided to increase its 2027 capital expenditure plan, with additional funds primarily invested in cleanroom construction to ensure the release of new capacity by the end of 2028.
Global capacity layout nodes:
- United States: ID1 factory expected to start producing wafers in the middle of 2027; ID2 factory in 2028; New York factory to start production in 2030.
- Singapore: HBM advanced packaging factory is ahead of schedule, with production expected to start in early 2027; a new NAND factory is expected to start production in the second half of 2028.
- Japan: A new DRAM factory has broken ground, with initial production expected in early 2028.
The company notes that new wafer factories will contribute to revenue after multiple quarters of ramp-up.
Management Personnel Updates
The company announced the appointment of the following executives:
1. Manish Bhatia has been appointed as President and Chief Operating Officer (COO), responsible for all business units and global operations, and will bear the responsibility for the company's overall profitability.
2. Dr. Scott DeBoer has been appointed as President and Chief Technology and Product Officer, overseeing the company's technology roadmap, R&D, and Micron Research Institute.