MICRON TECHNOLOGY INC

Results of Operations

Consolidated Results

Total Revenue: Total revenue for the second quarter and first six months of 2024 was impacted by the factors described in the section titled “Industry Conditions” above. These conditions drove significant quarterly declines in average selling prices throughout 2023 and a subsequent recovery of average selling prices in the first two quarters of 2024.

Total revenue for the second quarter of 2024 increased 23% as compared to the first quarter of 2024 due to increases in sales of both DRAM and NAND products.

•Sales of DRAM products in the second quarter of 2024 increased 21% as compared to the first quarter of 2024 primarily due to increases in average selling prices in the high-teens percentage range and a low-single-digit percent range increase in bit shipments.

•Sales of NAND products in the second quarter of 2024 increased 27% as compared to the first quarter of 2024 primarily due to a low-30% range increase in average selling prices, partially offset by a low-single-digit percent range decrease in bit shipments.

Total revenue for the second quarter of 2024 increased 58% as compared to the second quarter of 2023 due to increases in sales of both DRAM and NAND products.

•Sales of DRAM products in the second quarter of 2024 increased 53% as compared to the second quarter of 2023 primarily due to a high-50% range increase in bit shipments.

•Sales of NAND products in the second quarter of 2024 increased 77% as compared to the second quarter of 2023 primarily due to a low-60% range increase in bit shipments and an approximate 10% increase in average selling prices.

29 | 2024 Q2 10-Q

Total revenue for the first six months of 2024 increased 36% as compared to the first six months of 2023 due to increases in both DRAM and NAND sales.

•Sales of DRAM products in the first six months of 2024 increased 37% as compared to the first six months of 2023 primarily due to a high-60% range increase in bit shipments, partially offset by a high-teens percentage range decline in average selling prices.

•Sales of NAND products in the first six months of 2024 increased 41% as compared to the first six months of 2023 primarily due to a high-60% range increase in bit shipments, partially offset by a high-teens percentage range decline in average selling prices.

Consolidated Gross Margin: Our consolidated gross margin has been impacted by the factors described in the section titled “Industry Conditions” above. Our consolidated gross margin percentage improved to 19% for the second quarter of 2024 from negative 1% for the first quarter of 2024, as a result of improvements in margins for both DRAM and NAND products, primarily due to increases in average selling prices and manufacturing cost reductions. Our consolidated gross margin percentage improved to 19% for the second quarter of 2024 from negative 33% for the second quarter of 2023 primarily due to increases in average selling prices for NAND, the effects of charges to write down inventories to their net realizable value (“NRV”) in 2023, and the sale of previously written down inventories (see “Inventory NRV write-downs” below). Our consolidated gross margin percentage improved to 10% for the first six months of 2024 from negative 4% for the first six months of 2023 primarily due to cost reductions resulting from the effects of NRV write-downs as presented in the table below, partially offset by declines in average selling prices for both DRAM and NAND.

Inventory NRV write-downs: Our consolidated gross margin was impacted by charges in the second and third quarters of 2023 to write inventories down to their estimated NRV as a result of declines in average selling prices for both DRAM and NAND. As charges to write down inventories are recorded in advance of when inventories are sold, costs of goods sold in subsequent periods are lower than they otherwise would be. The impact of inventory NRV write-downs for each period reflects (1) inventory write-downs in that period, offset by (2) lower costs in that period on the sale of inventory written down in prior periods. The impacts of inventory NRV write-downs are summarized below:

Revenue by Business Unit

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

Changes in revenue for each business unit for the second quarter of 2024 as compared to the first quarter of 2024 were as follows:

•CNBU revenue increased 26% primarily due to increases in DRAM average selling prices and bit shipments driven by improving demand in cloud and data center end markets.

•MBU revenue increased 24% primarily due to increases in average selling prices for both mobile DRAM and NAND, partially offset by decreases in bit shipments.

•EBU revenue increased 7% primarily due to increases in bit shipments driven by solid demand for leading-edge products in industrial markets.

•SBU revenue increased 39% primarily due to increases in NAND average selling prices and bit shipments driven by strong demand across markets.

Changes in revenue for each business unit for the second quarter and first six months of 2024 as compared to the corresponding periods of 2023 were as follows:

•CNBU revenue increased 59% and 26%, respectively, primarily due to increases in bit shipments, partially offset by declines in average selling prices.

•MBU revenue increased 69% and 81%, respectively, primarily due to increases in bit shipments for both DRAM and NAND. MBU average selling prices increased for the second quarter of 2024 as compared to the second quarter of 2023 and decreased slightly for the first six months of 2024 as compared to the first six months of 2023.

•EBU revenue increased 28% and 15%, respectively, primarily due to increases in bit shipments, partially offset by declines in average selling prices.

•SBU revenue increased 79% and 31%, respectively, primarily due to increases in bit shipments. SBU average selling prices increased for the second quarter of 2024 as compared to the second quarter of 2023 and decreased for the first six months of 2024 as compared to the first six months of 2023.

Operating Income (Loss) by Business Unit

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

For the second quarter of 2024 as compared to the first quarter of 2024, CNBU, MBU, and SBU operating income (loss) improved primarily due to increases in average selling prices as a result of improving conditions across most markets. Manufacturing cost reductions in the second quarter of 2024 also contributed to increases in operating income (loss). For EBU, operating income (loss) for the second quarter of 2024 deteriorated from the first quarter of 2024 primarily due to declines in average selling prices.

For the second quarter of 2024 as compared to the second quarter of 2023, MBU and SBU operating income (loss) improved primarily due to increases in average selling prices as a result of improving conditions across most markets in 2024. For CNBU, operating income (loss) for the second quarter of 2024 improved from the second quarter of 2023 primarily due to increases in bits sold and manufacturing cost reductions, partially offset by lower average selling prices that had not fully recovered from prior declines. For EBU, operating income (loss) for the second quarter of 2024 deteriorated from the second quarter of 2023 primarily due to declines in average selling prices in 2023, which had not yet fully recovered.

31 | 2024 Q2 10-Q

For the first six months of 2024 as compared to the first six months of 2023, operating income (loss) deteriorated for all business units due to lower average selling prices, which had not fully recovered from the steep decline in market conditions across memory and storage markets that occurred throughout 2023. Manufacturing cost reductions and increases in DRAM bit shipments partially offset the adverse effects of pricing on operating margins.

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 2024 compared to the first quarter of 2024 were relatively unchanged as lower volumes of development and prequalification wafers were offset by increases in employee compensation. R&D expenses for the second quarter and first six months of 2024 increased 6% and 2%, respectively, as compared to the corresponding periods of 2023, primarily due to an increase in employee compensation, partially offset by lower volumes of development and prequalification wafers.

Selling, General, and Administrative: SG&A expenses for the second quarter of 2024 increased 6% as compared to the first quarter of 2024 primarily due to an increase in employee compensation. SG&A expenses for the second quarter and first six months of 2024 increased 21% and 13%, respectively, as compared to the corresponding periods of 2023, primarily due to an increase in employee compensation.

Restructure and Asset Impairments: See “Item 1. Financial Statements – Notes to Consolidated Financial

Statements – Restructure and Asset Impairments”.

Other Operating (Income) Expense, Net: See “Item 1. Financial Statements – Notes to Consolidated Financial

Statements – Other Operating (Income) Expense, Net”.

Interest (Income) Expense, Net: Interest income (expense) was not significant for the second quarter of 2024. Interest income (expense) deteriorated for the second quarter and first six months of 2024 as compared to the corresponding periods of 2023 primarily due to increases in interest expense as a result of higher debt balances and interest rates, partially offset by increases in interest income due to higher interest rates on our cash and investments.

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

In the first quarter of 2024, our tax expense was based on actual results for jurisdictions where small changes in our projected pre-tax income would have caused significant changes in the estimated annual effective tax rate. With our improved fiscal 2024 outlook, we can now estimate a more reliable annual effective tax rate and have reverted to a global annual effective tax rate method for all jurisdictions. Applying this updated rate to our year-to-date earnings resulted in the tax benefit recognized in the second quarter of 2024.

The change in our effective tax rate for the second quarter of 2024 as compared to the first quarter of 2024 was primarily due to the use of the estimated annual effective tax rate for the quarter. The change in our effective tax rate for the first six months of 2024 as compared to the first six months of 2023 was primarily due to changes in levels of profitability and the geographic mix of earnings.

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 the low level of profitability and the geographical mix of income, the benefit from tax incentive arrangements was not material for the periods presented.

Various tax reforms are being considered in multiple jurisdictions that, if enacted, contain provisions that could materially impact our tax expense. We continue to monitor the potential impact of these various tax reform proposals to our overall global effective tax rate and financial statements.

Other: Further information can be found in “Item 1. Financial Statements – Notes to Consolidated Financial Statements – Equity Plans”.