Conferencia de resultados de Micron (MU) del T4 del año fiscal 2026: ingresos récord y perspectivas de oferta ajustada de memoria

Puntos clave

• Micron (MU) informó de unos ingresos en el cuarto trimestre fiscal de 2026 de 54.200 millones de dólares, un 31% más intertrimestralmente y un 379% más en comparación con el mismo periodo del año anterior. El BPA diluido no GAAP alcanzó los 33,42 dólares, mientras que el margen bruto se situó en el 87%.
• Los ingresos de todo el ejercicio fiscal 2026 aumentaron un 256% hasta alcanzar un récord de 133.200 millones de dólares. El margen bruto se amplió en 40 puntos porcentuales hasta el 81,1% y el BPA aumentó un 811% hasta los 75,52 dólares.
• Los ingresos por memorias DRAM alcanzaron los 39.800 millones de dólares en el cuarto trimestre fiscal, con un aumento secuencial de los precios en el rango alto del 10%. Los ingresos por memorias NAND fueron de 14.100 millones de dólares, con un aumento de los precios de aproximadamente el 30%.
• La dirección prevé unos ingresos en el primer trimestre fiscal de 2027 de 61.500 millones de dólares, más o menos 1.500 millones de dólares, un margen bruto de aproximadamente el 86,25% y un BPA de 38,15 dólares, más o menos 1,00 dólar.
• Micron espera que la relación entre oferta y demanda en el mercado de memorias y almacenamiento en los años de calendario 2027 y 2028 sea más ajustada que en 2026. La dirección señaló que no dispone de visibilidad sobre cuándo volverán a equilibrarse la oferta y la demanda en el sector.
• La empresa ha firmado 26 acuerdos estratégicos con clientes (SCA, por sus siglas en inglés), que representan una cuota estimada de más del 35% de los ingresos hasta 2030. Las obligaciones de rendimiento restantes ascendían a aproximadamente 150.000 millones de dólares.

Datos financieros principales

Durante el ejercicio fiscal 2026, Micron generó un nivel récord de ingresos de 133.200 millones de dólares, lo que supone un incremento del 256% interanual. El margen bruto de todo el año fue del 81,1% y el BPA se situó en 75,52 dólares.

Rendimiento comercial y operativo

Los ingresos de la unidad de negocio de memorias para la nube (Cloud Memory Business Unit) alcanzaron los 16.300 millones de dólares, un 18% más intertrimestralmente, con un margen bruto del 83%. Los ingresos de la unidad de negocio principal de centros de datos (Core Data Center Business Unit) aumentaron un 56% intertrimestralmente hasta los 18.000 millones de dólares, mientras que el margen bruto aumentó al 90%.

Los ingresos de la unidad de negocio de móviles y clientes (Mobile and Client Business Unit) fueron de 13.100 millones de dólares, un 14% más intertrimestralmente, con un margen bruto del 90%. Los ingresos de la unidad de negocio de automoción y sistemas embebidos (Automotive and Embedded Business Unit) aumentaron un 47% intertrimestralmente hasta los 6.800 millones de dólares, con un margen bruto del 84%.

Los ingresos por HBM crecieron más rápido que los ingresos totales de la empresa durante el cuarto trimestre fiscal. Micron ha cerrado acuerdos que cubren la gran mayoría de su suministro de bits HBM para el año de calendario 2027 a precios significativamente superiores a los de 2026. La dirección afirmó que esto debería reducir la brecha de margen bruto entre las memorias HBM y la DRAM convencional.

Micron está acelerando la producción a gran escala de HBM4 y trabaja con NVIDIA en NVHBM, descrita como la primera implementación personalizada de HBM4E del sector para GPU de próxima generación y plataformas NVLink Fusion. La dirección prevé que los envíos de bits HBM de la industria crezcan más rápido que los de la DRAM convencional hasta el año de calendario 2028.

Los ingresos por SSD para centros de datos se aproximaron a los 10.000 millones de dólares, más de 10 veces el nivel del año anterior, y representaron más de dos tercios de los ingresos por NAND de Micron. La empresa prevé que el año de calendario 2026 suponga su quinto año consecutivo de cuota récord de mercado en SSD para centros de datos.

Micron prevé que los envíos de unidades de servidores crezcan en el rango alto del 10% tanto en el año de calendario 2026 como en el 2027. La dirección atribuyó la demanda a modelos de IA más grandes, ventanas de contexto más amplias y una mayor concurrencia, al tiempo que señaló que el ajustado suministro de memorias está moderando el crecimiento del contenido en comparación con las expectativas previas.

La empresa ha firmado 26 acuerdos SCA con 32.000 millones de dólares en compromisos financieros por parte de los clientes, la gran mayoría en depósitos en efectivo. Aproximadamente tres cuartas partes de los ingresos previstos por acuerdos SCA cuentan con un marco de precios definido. La dirección afirmó que más del 75% de la producción de Micron para el año de calendario 2027 ya está comprometida entre clientes con acuerdo SCA y sin él.

Previsiones de la dirección

La dirección prevé que el ejercicio fiscal 2027 vuelva a ser un año récord, con un crecimiento secuencial de los ingresos en cada trimestre. Se espera que el primer trimestre fiscal represente el suelo del margen bruto para el ejercicio, seguido de márgenes más elevados en un contexto de subidas de precios continuadas, aunque más moderadas.

Micron prevé que los gastos operativos del ejercicio fiscal 2027 aumenten en aproximadamente 2.500 millones de dólares, debido principalmente al incremento del gasto en I+D y a la retribución de incentivos. Las inversiones de capital de la primera mitad del año se proyectan en aproximadamente 25.000 millones de dólares, previéndose un gasto superior en la segunda mitad. Se prevé que el gasto de capital destinado a construcción crezca de forma significativamente más rápida que el gasto en equipos.

Para los años de calendario 2027 y 2028, la dirección prevé que los envíos de bits DRAM de la industria crezcan en el rango bajo del 20% y que los envíos de bits NAND aumenten en el rango medio del 20%. La empresa prevé que ambos mercados sigan condicionados por limitaciones de oferta en ambos ejercicios.

Riesgos y puntos de atención

El margen bruto del primer trimestre fiscal se verá afectado por un incremento de costes de unos 1.000 millones de dólares, incluidos la retribución de incentivos absorbida en los inventarios del cuarto trimestre fiscal, costes de puesta en marcha y otros gastos. Se prevé que la mayor retribución de incentivos de fabricación del ejercicio fiscal 2027 comience a afectar a los márgenes de forma más sustancial en el segundo trimestre fiscal.

Micron está acelerando la construcción de salas blancas, pero la dirección subrayó que las nuevas instalaciones requieren plazos de ejecución prolongados y la producción aumenta solo de forma gradual tras la salida inicial de obleas. Las futuras transiciones de nodo también están ofreciendo menores ganancias de productividad por oblea, mientras que la transición hacia HBM4 y HBM4E genera limitaciones adicionales a través de mayores ratios de conversión de capacidad.

La dirección reconoció que algunos clientes están moderando el crecimiento del contenido de memoria para respaldar un mayor envío de sistemas. Sin embargo, la empresa sostuvo que las condiciones de oferta y demanda en los años de calendario 2027 y 2028 deberían seguir siendo más ajustadas que en 2026.

Los días de inventario aumentaron en nueve días intertrimestralmente hasta llegar a 129, en parte debido a la actividad de producción anticipada por el fin de vida útil de nodos y a la retribución de incentivos de fabricación absorbida en el inventario. La dirección prevé que los días de inventario disminuyan en los próximos trimestres.

Puntos destacados de las preguntas y respuestas con analistas

En cuanto a la retribución al accionista, el director financiero Mark Murphy afirmó que Micron prevé alcanzar su nivel objetivo de efectivo al cierre del primer trimestre fiscal. La empresa tiene previsto aumentar la retribución de capital a partir del 9 de diciembre de 2026, principalmente mediante recompra de acciones. Su autorización actual de recompra es de 2.200 millones de dólares y la dirección prevé solicitar autorización adicional.

Sobre la durabilidad del ciclo, el consejero delegado Sanjay Mehrotra afirmó que Micron prevé que la demanda supere a la oferta tanto en el año de calendario 2027 como en el 2028. Mencionó la sólida demanda de servidores, las ratios de conversión de capacidad en la producción de HBM, las menores ganancias de productividad en las transiciones de nodo y las prolongadas rampas de aceleración de las salas blancas como factores de contención del crecimiento de la oferta.

Respecto a los acuerdos estratégicos, la dirección mantuvo su objetivo a más largo plazo de cubrir potencialmente alrededor del 50% de los ingresos hasta 2030 con acuerdos SCA. La empresa también destacó la necesidad de preservar la flexibilidad de suministro entre clientes, mercados y aplicaciones emergentes.

Sobre la intensidad de capital, la dirección afirmó que el gasto se está orientando hacia la construcción a medida que Micron desarrolla capacidad en nuevas instalaciones (greenfield). Los equipos se instalarán en función del comportamiento actualizado de la demanda, insistiendo la dirección en la disciplina inversora y en la obtención de rendimientos adecuados.

En cuanto a la memoria NAND, Micron señaló que está incrementando las inversiones en I+D de productos y fabricación para respaldar el crecimiento de los SSD para centros de datos, las transiciones a NAND G9 y su nueva planta de Singapur, cuyo inicio de producción está previsto para la segunda mitad del año de calendario 2028.

Transcripción completa de la conferencia de resultados

Transcripción completa de la conferencia de resultados

Comentarios de la dirección

Operator

Hello, everyone. Thank you for joining us, and welcome to Micron's Fourth Quarter 2026 Financial Call. [Operator Instructions]

I will now hand the conference over to Satya Kumar, Corporate Vice President, Investor Relations and Treasury. Satya, please go ahead.

Satya Kumar

Thank you, and welcome to Micron Technologies Fiscal Fourth Quarter 2026 Financial Conference Call. On the call with me today are Sanjay Mehrotra, our Chairman and CEO; and Mark Murphy, our CFO. Today's call is being webcast from our Investor Relations site at investors.micron.com, including audio and slides. In addition, the press release detailing our quarterly results have been posted on the website, along with prepared remarks for this call.

Today's discussion contains forward-looking statements that are subject to risks and uncertainties. These forward-looking statements include statements regarding our future financial and operating performance and our business model as well as trends and expectations in our business, customers, market, industry, products and regulatory and other matters. These statements are based on our current assumptions, and we assume no obligation to update these statements. Please refer to our most recent financial reports on Form 10-K, Forms 10-Q and our other filings with the SEC for more information on the risks and uncertainties that could cause actual results to differ materially from expectations.

Today's discussion of financial results is presented on a non-GAAP financial basis, unless otherwise specified. A reconciliation of GAAP to non-GAAP financial measures can be found on our website.

I'll now turn the call over to Sanjay.

Sanjay Mehrotra

Thank you, Satya. Micron delivered an exceptional fiscal Q4 with significant records in revenue, gross margin and EPS, each exceeding the high end of our guidance. Fiscal 2026 was an outstanding year. Revenue was 3.5x last year's record with data center revenue up fourfold. Micron's DRAM revenue for the fiscal year 2026 surpassed $100 billion. I'm thankful for the above and beyond efforts of our employees around the world that made these extraordinary results possible.

In recognition of these efforts and Micron's strong execution, we increased fiscal 2026 incentive compensation for every global team member, reinforcing our performance-driven culture and aligning team member success with long-term shareholder value creation. As strong as fiscal 2026 was, we expect fiscal 2027 to be even better. Industry demand has strengthened since our last earnings call, and we expect memory and storage supply-demand conditions to be much tighter in fiscal 2027 and 2028 than they were in 2026.

AI is becoming super intelligence and memory enhances this intelligence and the competitiveness of our customers' platforms. AI applications across end markets, whether using open source or closed source models are run on a variety of competing customer platforms. These platforms all share one important characteristic. Their value proposition is enhanced by the performance and capacity of memory and storage. Running an AI application on a platform with greater memory capability enables more scalable growth in usage, improves the end user experience and increases the value users get from AI applications. The strategic importance of memory to our customers also provides greater differentiation opportunities for Micron than at any time in our history. As we address AI-driven demand for an increasingly complex set of products across the memory hierarchy, we have opportunities to deliver differentiated performance and quality, time-to-market advantages and geographically diversified supply, including DRAM made in the U.S.

We also have opportunities for richer product mix relative to our competitors with our focus on higher-value solutions. Micron's technology leadership, strong product portfolio, strategic customer agreements and manufacturing excellence position us to capitalize on these opportunities.

Micron is the industry's technology leader. Our 1-gamma DRAM node and G9 NAND nodes are our largest production nodes today and are on track to become the highest volume nodes in Micron's history. Development of our next-generation DRAM and NAND technology nodes is also progressing well, and they are on track to begin volume production in the second half of calendar 2027. We are leveraging these technology nodes and our advanced packaging capabilities to deliver leadership products across the memory hierarchy such as industry-leading HBM, high-capacity SOCAM, high-capacity and high-performance DDR modules and data center SSD products. We are focused on our global manufacturing expansions to help address customer demand growth through the end of this decade and beyond. Micron is investing to provide long-term U.S.-based supply assurance for DDR, LP DRAM and HBM products through our fabs in Virginia, Idaho and New York to support our customers across a variety of markets, including data center, PC, mobile, automotive, aerospace and defense, medical, humanoids, robotics and other industrial and consumer markets.

During the last quarter, we celebrated a concrete poll milestone for our first New York fab with initial wafer output expected in calendar 2030. Our [ ID.1 ] fab is on track to commence wafer output in mid-calendar 2027, and [ ID. 2 ] is on track to commence wafer output in late calendar 2028. In fiscal Q4, we held a groundbreaking ceremony for our DRAM fab expansion in Japan with initial output expected in late calendar 2028 to support technology node transitions.

In Taiwan, we are on track for meaningful product shipments from our [ Tonggu ] facility in mid-calendar 2027. In Singapore, clean room preparation is ahead of plan at our HBM advanced packaging facility with initial output expected in early calendar 2027. Also, construction is on track for our new NAND facility in Singapore to begin output in the second half of calendar 2028. Production from new DRAM and NAND fabrication facilities takes time to ramp and gradually becomes more meaningful starting a few quarters after initial output.

Micron's strategic customer agreements accelerate the transformation of our business. These multiyear take-or-pay agreements sharpen our long-term supply planning and enhance the durability and predictability of our strong financial performance. Further, they provide our customers supply assurance and deepen technology road map collaboration. This, in turn, helps our customers invest more confidently in their business and enables their end consumers to benefit from their products and services.

To date, we have signed 26 SCAs, which we currently estimate to be over 35% of our revenue through 2030. 3/4 of this estimated revenue has a defined pricing framework, a majority of which have pricing bands with floor and ceiling prices. The remaining [ 1/4 ] of this SCA revenue expectation has pricing negotiated periodically based on market prices. Customers want SCA assured supply beyond 2030, and we have now signed SCAs that extend into 2031 as well as 1-year extensions to 2031 for 2 agreements. Any new discussions on SCAs where pricing is involved are negotiated with higher pricing based on prevailing market conditions and outlook. For the 26 signed SCAs and extensions, financial commitments from customers have increased to $32 billion, the vast majority of which are cash deposits. These financial commitments reflect our customers' confidence in their long-term demand for memory and storage.

Turning to our end markets. Please see our earnings press release for highlights across our high-capacity DDR and LP server DRAM, data center SSD, PC, smartphone and physical AI product portfolios. We expect server unit growth in the high teens percentage range in both calendar 2026 and 2027. This strong server unit growth is supported by a modestly lower rate of content growth than prior expectations amid tight memory supply. Growing model parameter size, longer context lens and higher concurrency continue to increase the memory and storage content required to execute AI workloads efficiently. Micron is leveraging our technology leadership and manufacturing excellence to deliver innovative products across the memory hierarchy to data center customers.

In HBM, our revenue for fiscal Q4 2026 grew faster than total company revenue in the quarter as we ramp HBM shipments across a growing number of customers. We have completed agreements for the vast majority of our calendar 2027 HBM bit supply with significant price increases year-over-year, narrowing the gross margin gap with conventional DRAM. We continue to execute well on our ramp of HBM4. We have a strong road map for future HBM products and are proud to be working with NVIDIA on the industry's first custom HBM4E implementation, NVHBM to be adopted on next generation of GPUs and NVLink Fusion platforms.

In NAND, AI context memory storage used for KV cache offload and HDD displacement opportunities are expanding the addressable market for SSDs. Data center SSD revenue in fiscal Q4 was nearly $10 billion, more than 10x the year ago quarter and was over 2/3 of total company NAND revenue. We are on track to deliver the fifth consecutive year of record market share in data center SSD in calendar 2026. This performance is driven by the strength of our NAND technology leadership, end-to-end data center storage portfolio and close collaboration with customers, which has resulted in design wins across the largest data center deployments.

PC and mobile industry revenue remain on track to grow this calendar year, driven by strength at the premium end of the market despite potential double-digit overall unit declines in both markets. OEMs continue to introduce new AI capabilities in flagship PCs and smartphones, driving robust demand for higher-performance devices with increased DRAM and NAND content. Micron is focused on these premium segments and is well positioned to support customers as they expand edge AI capabilities with our industry-leading memory and storage portfolio. Nearly half of MCBU revenue in fiscal Q4 was generated by 1-gamma products as customers accelerate qualifications and adopt our latest technology, which delivers lower power consumption and higher performance.

Autonomous vehicles are the first major deployment of physical AI, which we believe will expand over time to humanoid robots and other intelligent autonomous systems. These increasingly complex systems require substantially higher performance and more power-efficient memory and storage to operate in real time. Memory content in Level 4 and higher autonomous vehicles typically exceeds 200 gigabyte, while storage content reaches multiple terabytes, each more than an order of magnitude greater than in today's Level 2+ and Level 3 semi-autonomous vehicles. Humanoid robots are expected to have comparable memory and storage requirements to autonomous vehicles. With the anticipated increase in both units and memory content, physical AI can become a significant driver of memory and storage demand by the end of this decade. Several physical AI customers are sampling our next-generation products, and we are increasing investments in our technology road map to ensure we are prepared to capitalize on this opportunity.

Now turning to market outlook. We expect memory and storage supply-demand conditions to be much tighter in calendar 2027 and 2028 than they were in 2026. In NAND, for calendar 2026, we expect industry bit shipments to grow in the low 20s percentage range, slightly above our prior expectations. We expect Micron NAND supply to grow less than industry supply growth in calendar 2026. For calendar 2027 and 2028, we expect industry NAND bit shipments to grow approximately in the mid-20s percentage range and the industry to remain supply constrained in both years.

In DRAM, for calendar 2026, we expect industry bit shipments to grow in the mid-20s percentage range. We expect Micron DRAM supply to grow approximately in line with industry supply growth. For calendar 2027 and 2028, we expect industry DRAM bit shipments to grow approximately in the low 20s percentage range and the industry to remain supply constrained in both years. We expect industry HBM bit shipments to grow faster than conventional DRAM through calendar 2028. The structural gap between DRAM supply and demand growth rates is resulting in ongoing supply tightness and clean room additions are required to augment node transition supply growth and help narrow the gap. Even with additional industry DRAM clean room space plans with robust demand trends, including new upside requests from customers, we do not have line of sight to when supply and demand will return to balance.

Given the need for DRAM clean room space and supported by greater visibility from SCAs into our demand through the end of the decade and beyond, we plan to increase our CapEx in fiscal 2027 versus prior plans. A majority of the increase is for construction CapEx, most of which is to help accelerate clean room space availability in late calendar 2028 and beyond. We are also working to optimize production from available clean room space, which is resulting in some pull forward of equipment spending. Mark will provide more details on CapEx.

As we make these clean room space investments, we will remain disciplined in our approach and anticipate ramping equipment capacity appropriately with our demand in the market environment. To further accelerate execution and innovation across the company, last month, we announced leadership appointments. Manish Bhatia has been appointed to President and Chief Operating Officer; and Scott DeBoer has been appointed to President and Chief Technology and Product Officer. Manish leads Micron's business units and global operations with accountability for our operating P&L. In his role as COO, Manish has end-to-end responsibility for demand through supply, enabling faster, more integrated decision-making and stronger alignment across the organization to meet our customers' evolving needs.

Scott leads Micron's innovation, technology and products organization. In his role as Chief Technology and Product Officer, Scott is responsible for advancing Micron's industry-leading memory and storage road maps, accelerating innovation to meet customers' rapidly evolving requirements and overseeing Micron Research Labs, a global flagship research hub dedicated to breakthrough memory and compute technologies.

I'll now hand it over to Mark for our fiscal Q4 financial results and outlook.

Mark Murphy

Thank you, Sanjay, and good afternoon, everyone. Micron delivered exceptional results to close out the fiscal year with fiscal Q4 revenue, gross margin and EPS all exceeding the high end of our guidance.

For the full year, we achieved record revenue of $133.2 billion, up 256% year-over-year. Fiscal 2026 gross margins expanded to 81.1%, a 40 percentage point improvement from fiscal 2025, and EPS increased 811% year-over-year to $75.52. To date, we have signed 26 SCAs in total, and our remaining performance obligations, or RPO, is approximately $150 billion. All SCAs have take-or-pay contracted volumes, and RPO reflects the contract value for only SCAs that have a determined pricing framework, which can be either a fixed price or subject to a pricing floor and ceiling. RPO is based on committed volumes and minimum pricing and is inherently conservative. As mentioned in our last earnings call, even at floor prices, we expect margins mainly above any prior cycle peak margins. We expect revenue to well exceed the associated RPO over the terms of the agreements.

Consolidated fiscal Q4 revenue was [ $54.2 ] billion, up 31% sequentially and up 379% year-over-year. Fiscal Q4 revenue was sixth consecutive quarterly revenue record. Fiscal Q4 DRAM revenue was a record $39.8 billion, up 343% year-over-year and represented 73% of total revenue. Sequentially, DRAM revenue increased 27%. Bit shipments were up mid-single-digit percentage range. Prices increased high teens percentage range, driven by tight DRAM industry conditions. Fiscal Q4 NAND revenue was a record $14.1 billion up 526% year-over-year and represented 26% of total revenue. Sequentially, NAND revenue increased 42%. Bit shipments increased approximately 10%. Prices increased approximately 30%, driven by tight NAND industry conditions. Consolidated gross margin for fiscal Q4 was 87%, up 210 basis points sequentially. This improvement was driven primarily by higher pricing and strong execution, partially offset by mix.

Now turning to quarterly financial performance by business unit. Cloud Memory business unit revenue was a record $16.3 billion and represented 30% of total company revenue. [ CMBU ] revenue was up 18% sequentially driven by higher pricing and bit shipments. CMBU gross margins were 83%, flat sequentially, driven by higher pricing, offset by higher HBM mix. Core data center business unit revenue was a record $18 billion and represented 33% of total company revenue. [ CBU ] revenue was up 56% sequentially driven by higher pricing and bit shipments. [ CDBU ] gross margins were 90%, up 290 basis points sequentially and driven by higher pricing and favorable mix.

Mobile and Client business unit revenue was a record $13.1 billion and represented 24% of total company revenue. CBU revenue was up 14% sequentially, driven by higher pricing, partially offset by lower bit shipments. MCBU gross margins were 90% up 260 basis points sequentially, driven primarily by higher pricing and favorable mix. Automotive and Embedded Business Unit revenue was a record $6.8 billion and represented 13% of total company revenue. [ AEBU ] revenue was up 47% sequentially, driven by higher pricing and higher bit shipments. [ ABU ] gross margins were 84%, up 470 basis points sequentially driven by higher pricing.

Operating expenses in fiscal Q4 were $2.6 billion, up $1.1 billion quarter-over-quarter. The sequential change was primarily due to the increase in incentive compensation for every global team member, along with our decisions to contribute $300 million to community investments. We generated operating income of $44.6 million in fiscal Q4, resulting in an operating margin of 82.3%, up 110 basis points sequentially and 47 percentage points year-over-year.

Fiscal Q4 taxes were $6.8 billion on an effective tax rate of 15%. Non-GAAP diluted earnings per share in fiscal Q4 was $33.42, up 33% sequentially.

Turning to cash flow and capital expenditures. In fiscal Q4, operating cash flows were $44 billion. Capital expenditures were $10.8 billion, resulting in free cash flow of $33.2 billion. As noted in previous disclosures, customer cash deposits associated with the SCAs are reported within financing activities and, therefore, do not affect our free cash flow. Customer cash deposits received during fiscal Q4 were $12.3 billion. Ending inventory for fiscal Q4 was $10.4 billion, with days of inventory at 129, an increase of 9 days sequentially. The increase in DIO includes the effect of node end-of-life related build ahead and manufacturing-related incentive compensation in fiscal Q4 that was absorbed into inventories. Our inventory levels and supply remain extremely tight and we expect DIO to decline in the coming quarters.

We reached record levels of cash and investments of $73.5 billion at quarter end. Customer cash deposits on our balance sheet at the end of fiscal Q4 were $12.7 billion. SCA cash deposits are unrestricted and will be returned to customers over time towards the latter half of each agreement's term assuming minimum purchase requirements are met.

During fiscal Q4, we reduced debt by approximately $500 million, including a note redemption that reduced senior notes by approximately $300 million. The weighted average maturity on our outstanding debt is approximately 9 years. We closed the quarter with $5.2 billion of debt and a net cash balance of $68.3 billion. During the quarter, we received 2 credit rating agency upgrades and are now rated at BBB+ or equivalent with all 3 major credit rating agencies. Our balance sheet has never been stronger, and we expect it to strengthen further even as we increase investment in technology and needed capacity. As noted previously, we intend to increase our capital return from December 9, 2026, the second anniversary of the signature of our definitive chips agreements. Over time, we expect to return 100% of our excess cash to shareholders.

Now turning to guidance. We expect fiscal Q1 revenue to be a record $61.5 billion, plus or minus $1.5 billion. Gross margin to be approximately 86.25%, operating expenses to be approximately $2.06 billion. Based on a share count of approximately 1.15 billion shares, we expect EPS to be $38.15 per share plus or minus $1. We expect fiscal 2027 to be another record year with sequential revenue growth each quarter. Consistent with projected strong execution and record company financial performance, we expect fiscal 2027 to have higher incentive compensation levels. We anticipate fiscal Q1 to be the floor for gross margins in fiscal 2027. As Sanjay mentioned, we made a decision to increase fiscal 2026 incentive compensation in fiscal Q4. Most of the increase in fiscal 2026 incentive compensation pertaining to manufacturing was absorbed into inventories in fiscal Q4.

As a result, the effects from the sale of these higher cost inventories principally impact fiscal Q1 gross margin. Fiscal Q2 benefits from less of this fiscal Q4 related compensation expense, but this benefit is offset by the impact of higher fiscal 2027 incentive compensation. We expect higher gross margins beyond fiscal Q1 for the remainder of fiscal 2027 with a more moderate rate price increases.

We project operating expenses to increase by approximately $2.5 billion in fiscal 2027, primarily from higher R&D to support an unprecedented set of opportunities in memory and storage and from higher incentive compensation plans. We expect that fiscal Q1 and fiscal 2027 tax rate of around 15.5%.

Micron continues to invest in a disciplined manner across our global footprint to address customer demand. As a reminder, our CapEx is net of anticipated government incentives. In fiscal Q1, we project CapEx of around $11.5 billion and anticipate first half fiscal 2027 CapEx to be approximately $25 billion. We project CapEx to be higher in the second half of fiscal 2027. We expect a meaningfully higher growth rate in construction CapEx as compared to equipment CapEx in fiscal 2027.

Before I close, I would also like to add my thanks to all Micron global team members for their focus on technology and product innovation and disciplined execution that makes these strong results and outlook possible.

I'll now turn it over to Sanjay to close.

Sanjay Mehrotra

Thank you, Mark. Super Intelligence is creating the most compelling opportunity for Micron in its history. Fiscal 2026 was an outstanding year, and we expect fiscal 2027 to be even better. As we celebrate the 48th anniversary of Micron's founding, I would like to acknowledge the nearly 5 decades of innovation disciplined execution and perseverance that have prepared Micron for this moment.

We will now open for questions.

Operator

[Operator Instructions] Your first question comes from the line of Timothy Arcuri from UBS Securities LLC. Please go ahead.

Preguntas y respuestas

Timothy Arcuri

Mark, I wanted to ask about capital return. I know you don't want to front run yourself. But can you give us any milepost here? Like what are you thinking of minimum cash balance you have pretty much double the cash that Apple or NVIDIA have. So sort of what's enough cash? Do you think -- do you want to keep $100 [ million ] in cash and you return everything beyond that. Can you give us -- I know you don't want a front runner so you're but can you give us some sense of what the mile toes are?

Mark Murphy

Sure, Tim. I'm happy to provide some perspective. Yes. The market conditions, Micron's Technology and product position and operational execution, all combined to deliver very strong free cash flow. We had $33 billion as reported here in fiscal Q4. We expect a strong free cash flow growth to continue on the market conditions and disciplined execution. Even while we invest in more R&D and CapEx, as you've heard today.

So with these demand drivers and supply factors and long-term and committed agreements that you heard about today, plus Micron's technology position and execution. We think this free cash flow strength is more durable. So near term, based on our Q1 guide and including the CapEx number that you heard you will see free cash flow is significantly higher than $33 billion we reported in fiscal Q4. On target cash, we expect to be around a target cash level by the end of fiscal Q1. Now over time and with the rate and pace determined by various factors, we plan to return excess primarily done through share repurchase. We intend to increase capital return, as we've talked about before and in the script today from December 9.

And then finally, I'll just add that our current authorization that you can see from our previous filings, for share repurchase stands at $2.2 billion. And you can assume that we will seek additional authorization in the near term on more authorization.

Timothy Arcuri

And then just a follow-up. So CapEx, you're not guiding the full year, but it sounds like maybe it's going to be [ 55% ], maybe a little higher this year which seems like it's maybe in the high teens as a percent of revenue for fiscal '27. I know that revenue is a lot higher, so it's going to take time for the CapEx to kind of catch up. But how do we think about capital intensity over the longer term for the business. I know you used to talk about mid-30s. That seems a little high, probably given what's going on now, but is like [ 20% to 25% ] the new norm. Can you kind of walk us through that.

Mark Murphy

Yes, Tim, I would just comment that you captured correctly that we gave you a first half CapEx number we indicated second half would be higher. Importantly, that mix of capital spend is shifting to more construction. And we gave you some commentary on that versus equipment. And we would expect that trend to continue here next few years. Now as it relates to capital intensity, I think as you point out, the capital intensity is low on historic levels, and that is reflective of the strategic asset that memory and storage has become and the industry is structurally reset and we will continue to work to add capacity in a very disciplined manner, ensuring that we're getting adequate return on that capacity investment going forward.

Operator

Your next question comes from the line of C.J. Muse at Cantor Fitzgerald.

Christopher Muse

I guess first question on gross margins. within the guide for November, can you quantify the impact from the higher ASP inventory? And are there other sort of mix shifts that we should be thinking about that are impacting the sequential?

Mark Murphy

Yes, C.J., I will -- this is Mark. I will I will take this opportunity to just provide a bit more perspective on fiscal Q4 and fiscal Q1 to help walk you through the puts and takes on margin.

In fiscal Q4, we made the decision to increase incentive compensation. And you can see that most clearly in actually the OpEx number. And that you can see it clearly in the third quarter to fourth quarter OpEx. Now in manufacturing expense, most of these costs, they're absorbed into inventories in Q4. So there was only a small effect in Q4. The higher cost inventories as a result of the increase in incentive comp booked in the fourth quarter, the impact of that, you'll see -- you see in the fiscal Q1 guide. And we also have some start-up costs, which I've talked about previously and some other costs, but incentive comp is a big driver to that gross margin outlook.

And in total, these factors in the first quarter are roughly $1 billion of higher cost in Q1. So that gives you a sense of the margin impact. Now I think it's important to note that we also have significantly increased fiscal '27 incentive compensation. And you'll -- you see the effect of that in first quarter again, in the OpEx number in the fiscal Q1 OpEx guide.

On manufacturing, most of the higher FY '27 incent comp, will start to impact margins in fiscal Q2. Now beyond the normal cost increases from higher volume and depreciation you have this roughly $1 billion of ongoing costs from incentive comp, higher start-up and some other costs in fiscal '27. So while it's a headwind in the first quarter and there is some sustained costs through the year, I just -- it's important to keep in mind how structurally different the business is as far as profitability and return or operating at a much stronger level and have talked about how '27, '28, we expect to be stronger market conditions in '26 and long-term agreements give us and take-or-pay agreements give us visibility beyond that. And I think it's important to also note that these costs -- these -- some of these costs can be considered variable or temporal.

So for '27, we also discussed how we expect Q1 to be the floor and gross margin and we expect higher gross margin for the balance of the year as we have continued price increases and strong operating performance.

Christopher Muse

Very helpful. I guess as a follow-up, could you speak to, I guess, HBM, you talked about raising pricing to be closer to conventional DRAM. Should we assume that's a Jan 1st increase? And how should we think about the relative growth of that business overall? Is there sort of a percentage that you're comfortable sharing?

Sanjay Mehrotra

So I can take that question, C.J. So as you know, for 2026, our prices for HBM were negotiated with our customers last year. And we mentioned that now or 2027, a large part of the volume is already sold out for 2027 for HBM and the prices are much higher than 2026 prices. And of course, that is helping us narrow the margin gap with the non HBM memory there. So overall, our HBM is on a very good trajectory. We indicated that over for the industry. We expect HBM to be outgrowing the DRAM in terms of the demand growth. So HBM is on a strong trajectory. Our portfolio is very well positioned. Our HBM3, [ HVMI ] products late next year with HBM4E products. So we continue to see strong momentum with our HBM products and well positioned to address the opportunities ahead.

So I hope I answered your question regarding the growth here, strong growth, strong products and with the price increases starting in calendar year 2027, narrowing the margin gap with non-HBM part of the DRAM market.

Operator

Your next question comes from the line of Vivek Arya from Bank of America Securities. Please go ahead.

Vivek Arya

For the first one, Mark, I wanted to go back to cash returns. At this space, Micron could generate over $100 [ billion ], I think, from Q2 to Q4. So even if, let's say, Q1, you're building cash to get to your target balance sheet your cash generation from Q2 onwards should get you to at least $100-plus billion. So if that is the case, why shouldn't we expect that level of cash return in fiscal '27? So I know you're not providing a specific number. But what am I missing in that high-level analysis, right, beyond just going through the outline of sales and margins and CapEx estimates that you're providing?

Mark Murphy

Yes. Vivek, all I can add is that and hopefully made it clear in the prior response that we have the ability and the intent to increase our capital return and we -- you can expect us to seek to increase our authorization and commence stronger capital return from December 9 in accordance with the agreements we have with on chips.

Vivek Arya

Okay. For my follow-up, maybe one for Sanjay, when we look, Sanjay, at just the valuation of memory stocks, right, very depressed, would suggest that people feel that next year might be a peak for pricing might be a peak for earnings in the cycle either because the industry is bringing on incremental capacity or there is an additive that maybe some of your customers even in the data center might despec products because either because of the shortages of memory or just because, right, it's such a bigger part of [ pillar ] material.

So I know you don't talk about specific pricing. But as you were to think about conceptually in 2028 for the industry, what is the potential for industry pricing to continue to stay favorable to even potentially increase versus '27 given these headwinds from either incremental capacity coming online or some customers wanting to despec their products to cope with market conditions.

Sanjay Mehrotra

As we noted, calendar year -- in calendar '27 as well as 2028, we see demand exceeding supply. And in fact, we see greater tightness in the industry in '27 and in '28 versus '26. So overall, supply-demand environment is only getting tighter. And of course, even as we work hard to bring up the capacity, as I shared in my prepared remarks, even with any new clean room space coming up in 2028, we see continuing tight supply conditions because, first of all, clean rooms take a long while to build, even after they are built, even after first wafer output, production ramps up only gradually in the clean rooms. That's just the nature of what it takes to bring up production and with HBM going from 3E to a greater mix of 4 and 4E and with the trade ratio that exists, that again, creates headwinds with respect to supply growth node transitions of the future gave less productivity gain per wafer as well. So there are a lot of factors, these key factors that are headwinds to the supply growth.

And even in 2028, even as some of the new clean rooms start ramping up, the supply is tight. And that is in the backdrop of strong demand. While some level of content growth may be moderately lower in some of the servers compared to prior expectations. Overall, unit demand for servers continues to increase '26 as well as '27, we expect high teens in terms of server unit shipments and that sets the stage well for data center growth of shipments for DRAM in 2028 as well. So it's a strong demand environment and customers work with -- they fully understand this extremely tight supply outlook that we have. We have shared with you that we do not see line of sight when supply catches up with demand because the demand trends of larger models, growing context, more current currency, greater agents across enterprise and consumer only continue to drive greater need for memory, greater need for memory content as well as for higher performance memory.

So when customers reduce their content growth versus prior expectations as I refer to in certain platforms, that really is to enable them to ship more units as reflected in the strong server growth in '26 as well as '27, which sets the stage up well for 2028 time frame. So I see healthy demand supply environment here. Going forward for the factors related to demand as well as for supply, and that obviously bodes well for the industry pricing environment as well.

And I'll just add here that our SCAs gave us tremendous visibility with our customers. And we mentioned here that our customers are actually coming to us, asking for more supply, SCA customers are asking for more supply non-SCA customers. I mean we are getting POs. I'll tell you that 2027 more than 75% of our output is already committed for 2027. And a majority of discussions with our customers today are already around 2028. So overall, the industry demand supply environment and the outlook is in a very healthy place here. And we do not have -- in this strong demand environment, we do not have a line of sight to when supply and demand will get in balance. And customers want assurance now even beyond 2030 time frame. I mean, we mentioned that we concluded some extensions to our SCAs as well as the 2021 time frame as well as new SCAs for extending out to 2021 time frame.

Operator

Our next question comes from the line of Krish Sankar from TD Cowen.

Sreekrishnan Sankarnarayanan

I had 2 to Sanjay, there's been talk of a 1 large customer [ despecking SBM ]. I'm kind of curious what your view on that is. And also implications given the fact that HBM higher trade ratio, if those wafers get reallocated to DDR with an increased DDR supply quite a bit? And then I have a follow-up.

Sanjay Mehrotra

So as we mentioned, we actually see the overall HBM supply -- I mean, HBM demand outpacing the industry demand in '27 as well as in '28. And we continue to see tight memory conditions in both '27 and '28 time frame. And the latent nature of a need for more memory in the applications continues to be strong because AI platforms in order to deliver their maximum capabilities and potential just need more and faster memory to again address the growing context, concurrency and of course, the larger [indiscernible] as well. So overall, the demand trends are in a very strong place.

And then customers make optimizations, they make these optimizations mainly to be able to ship more units to drive their own more growth as well as to address the end market opportunity of growing scaling up AI and these optimizations, when they occur, they do not take away from the latent nature of need for more memory in the systems. And these optimizations also have diminishing -- diminishing return for any further optimizations and if you contrast optimizations with actually the secular demand and the value proposition of memory in the platforms, you will see that the overall demand trend continues to be very healthy for memory and storage. And again, we see '27 and '28 tighter than '26. And HBM continues to grow faster than conventional DRAM through 2028.

Sreekrishnan Sankarnarayanan

Got it. Thanks for that Sanjay. And Mark, just a quick follow-up. I know clearly, like FY '27 CapEx higher than $50 billion, and it looks like your free cash flow is going to be over $100 billion. And higher growth rate in construction CapEx versus equipment. I'm just wondering, is that because you are constrained in getting semi equipment next year? Or is it not an issue? I'm just trying to wonder if there is a natural cap on CapEx next year because you're constrained in securing equipment.

Mark Murphy

Krish, it's related to just the strong supply demand and balance that we have and the lead time it takes to get greenfield capacity in place. So that -- we've talked through many fabs that we're building out and coming [ ID1, ID2 ], Japan, Singapore, [ Tong Low ]. And so -- and we've got now the visibility through these strategic customer agreements to build out this greenfield capacity. And then we will equip those fabs as appropriate, given our most current views on demand.

Operator

Our next question comes from the line of Harlan Sur at JPMorgan.

Harlan Sur

Last earnings with 16 SCAs secured, your view was the potential for 50% plus kind of SCA coverage on forward revenues given the pipeline of SCA signed in a new negotiation. Fast forward to this quarter, 26 SCAs are now secured on the coverage. And you and your customers have an updated industry view that is even further supply constrained in calendar '27 and calendar '28. So what do you think your forward revenue coverage will be if all of your current SCA negotiations are completed, I think, Sanjay, you said 70% of revenue is covered in fiscal '27 by customer commits, including SCAs, but would the team actually see 60%, 70% SCA coverage on forward revenues over the next few years when all of your negotiations are completed?

Sanjay Mehrotra

So regarding my comment on '27 that more than 75% of our output is already committed. As I have said, that is, of course, between the SCA customers as well as non-SCA customers. Keep in mind that we have certain large customers, where we, of course, are doing business with them on annual basis as well. So that volume coverage comment, I just wanted to clarify, it is across our customer base, SCAs as well as non-SCAs and given the strong demand trends, we are getting purchase orders for 2027 from non-SCA customers as well early on here.

And regarding your question on where could SCAs ultimately reach to. So that basically is still around 50% of our revenue through the 2030 time frame that we had previously commented on, that comment still remains about the same, that we could reach around 50% of our revenue to be covered by SCA. Of course, that could be less to, depending upon the revenue of all the rest of the business, right? So -- but overall, that objective remains by and large the same. And of course, we are always managing the mix of the business. It is important for us to be able to maintain flexibility in terms of managing our supply across our customer base, across the end market segments, across new customers, too, that may be evolving over the course of the next few years, particularly given the dynamic nature of our industry, the tremendous amount of innovation that's just happening across the board, we want to be in a position to basically remain in that position.

So basically, I think we are really making very good progress in this regard. And the benefit of SCA is to give us visibility into the demand out there in the future, and it really helps us plan our investments and that really is a fundamental change to the nature of this industry when you think about it, that it helps us manage our investments, manage our supply expectations with a long lead time, long time horizon, that is really good for the health of the industry versus the past when you would experience more volatility in our industry.

Harlan Sur

I appreciate that. And then on the NAND side of the business, relative to your competitors in the Micron team, I think total bit supply share puts you sort of in that #4, #5 sort of global market share regime, right? Yes? The team continues to drive this very, very strong like #2 market leadership position in data center and enterprise [indiscernible] is the strong performance differentiation is required here, right? It's not just you've got this great base G9 technology, but it's also the controller technology firmware customization. You're also a part of the NVIDIA [ SCADA ] initiative for direct [indiscernible] access to storage. And it seems like more and more of the inferencing related KV cash functionality is being offloaded to storage, right? And so with the expansion of memory curing to include more and more flash-based architectures, like has that changed the team's view on your R&D and CapEx investments in your NAND franchise?

Sanjay Mehrotra

So certainly, as you noted, the memory hierarchy from HBM to DRAM to SSD, I mean it continues to be leveraged as context of windows grow and as AI advances, and we are very pleased with our product portfolio position. And as we noted, I mean, our portfolio is in the best position ever in the industry, particularly to capture these huge growing market opportunities with AI. And of course, very proud of our team's strong execution on the side of SSD, which is critical for data center SSDs, which are absolutely critical in the memory hierarchy that is needed to drive the growth of AI.

And you're seeing the results of that 5 consecutive years now of share growth in the data center market, revenue reaching $10 billion in fiscal Q4 for data center SSD, data center SSD coming 2/3 of our total NAND revenue. So we are, of course, continuing to invest in R&D related to the products as well as making the investments on the manufacturing side, our investments related to NAND as part of our overall CapEx certainly are increasing as well. And we are -- as you know, we have talked about the next fab for NAND that we are also building in Singapore, which is currently on track for late calendar 2028 time frame. And our CapEx is supporting our G9 NAND tech transition, of course, driving toward equipment productivity optimization, NAND R&D and other aspects of our Singapore operations as well.

Operator

This concludes the Q&A session and today's call. Thank you for attending. You may now disconnect.