Micron Technology(MU) - 2024 Q4 - Annual Report

Financial Performance - The company reported revenue of $25,111 million for the year ended August 29, 2024, a significant increase from$15,540 million in the previous year, representing a growth of approximately 61.5%[283]. - The gross margin improved to $5,613 million in 2024, compared to a loss of$1,416 million in 2023, indicating a recovery in profitability[283]. - Research and development expenses were $3,430 million in 2024, up from$3,114 million in 2023, reflecting a continued investment in innovation[283]. - The company incurred operating income of $1,304 million in 2024, a substantial recovery from an operating loss of$5,745 million in 2023[283]. - Net income for the year was $778 million, a significant turnaround from a net loss of$5,833 million in the previous year[283]. - Total comprehensive income for the year was $956 million, compared to a loss of$5,585 million in the prior year[286]. - The company reported net cash provided by operating activities of $8,507 million, a substantial increase from$1,559 million in the previous year[296]. Inventory and Costs - In 2023, the company recorded aggregate charges of $1.83 billion to write down the carrying value of inventories due to excess and obsolete inventory[103]. - The company may incur higher inventory carrying costs due to lower utilization and increased per gigabit manufacturing costs[102]. - Total inventories reached$8,875 million in 2024, up from $8,387 million in 2023, with a write-down of$1.83 billion recorded in 2023[327]. Competition and Market Dynamics - The company faces intense competition in the semiconductor memory and storage markets, with competitors potentially using aggressive pricing strategies[110]. - Nearly half of the company's revenue in 2024 was from sales to customers headquartered outside the United States, with over 80% of revenue from products shipped internationally[106]. - Economic downturns and inflationary pressures may adversely affect demand for the company's products, leading to potential decreases in average selling prices[137]. Research and Development - The company invested in R&D for new technologies, including EUV lithography, to meet advanced product requirements and improve cost efficiency[115]. - The company is developing new products to meet customer demands, particularly in the context of emerging technologies like generative AI[116]. - The company may not be able to recover investments in R&D or realize economic benefits from new technologies, impacting future profitability[115]. Risks and Challenges - Geopolitical risks, including restrictions on sales to significant foreign customers, could materially affect the company's revenue and operations[107]. - The availability and quality of materials, supplies, and third-party services are critical to the company's operations, with potential shortages impacting production and financial condition[128]. - The company faces challenges in obtaining advanced semiconductor manufacturing equipment, which could delay production and increase costs[134]. - Trade disputes and geopolitical tensions may limit access to critical materials, particularly rare earth elements, which are predominantly sourced from China[131]. - The company is exposed to risks from defective products or those that do not meet specifications, which could lead to significant costs and reputational damage[148]. - The company faces significant risks from cyberattacks, which could lead to unauthorized access to sensitive data and operational disruptions[151]. - The implementation of AI technologies is complex and costly, with no guarantee of enhancing business operations or product offerings[155]. Financial Position and Debt - As of August 29, 2024, the company had debt with a carrying value of $13.40 billion and may incur additional debt under its$2.50 billion Revolving Credit Facility[190]. - The company estimates capital expenditures in 2025 for property, plant, and equipment to be around mid-30% range of revenue for the year[188]. - The company anticipates that changes in tax laws, particularly the OECD's Pillar Two legislation, could significantly increase its tax expense starting in 2026[182]. - The company may not be able to obtain financing on acceptable terms due to its debt levels and prevailing economic conditions, impacting its ability to fund operations and capital investments[189]. Corporate Governance and Compliance - Compliance with government incentives and conditions may add complexity to operations and increase costs[125]. - The company has established goals related to environmental, social, and governance matters, which may entail significant costs and present various operational risks[162]. - Legal and regulatory investigations could adversely affect the company's business and financial condition[172]. Shareholder Returns - The company authorized share repurchases of up to $10 billion, with expenditures of$300 million in 2024, $425 million in 2023, and$2.43 billion in 2022[197]. - Micron declared dividends totaling $518 million, compared to$504 million in the previous year[296]. - In 2024, Micron declared and paid dividends of $0.115 per share in each quarter, with the next dividend payable on October 23, 2024[364]. Legal Matters - The company is currently involved in patent infringement actions filed by Netlist, Inc., seeking damages and injunctive relief[352]. - Micron was ordered to pay$425 million for infringing U.S. Patent No. 7,619,912 and $20 million for infringing U.S. Patent No. 11,093,417 following a jury verdict[353]. - The company is cooperating with the Chinese State Administration for Market Regulation regarding an investigation into potential collusion among DRAM suppliers[360]. - Micron's revenue is substantially derived from its DRAM, NAND, and other memory and storage products, which are the subject of ongoing legal disputes[359].