Micron Technology, Inc.
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ITEM 1. BUSINESS
Overview
We are a global leader in semiconductor memory and storage, powering AI and compute-intensive applications from cloud to edge. With a relentless focus on our customers, technology and product leadership, and manufacturing and operational excellence, our comprehensive portfolio of high-performance DRAM, NAND, and NOR solutions deliver the speed, efficiency, and scale today’s workloads demand, accelerating intelligence to enrich life for all.
We manufacture our products at wholly-owned facilities and also utilize subcontractors for certain manufacturing processes. Our global network of manufacturing centers of excellence not only allows us to benefit from scale while streamlining processes and operations, but it also brings together some of the world’s brightest talent to work on the most advanced memory technology. Centers of excellence bring expertise together in one location, providing an efficient support structure for end-to-end manufacturing, with quicker cycle times, in partnership with teams, such as R&D, product development, human resources, procurement, and supply chain. For our locations in Singapore and Taiwan, this is also a combination of bringing fabrication and back-end manufacturing together. We continue to make significant investments to develop proprietary product and process technology, which generally increases bit density per wafer and reduces per-bit manufacturing costs of each generation of product. We continue to introduce new generations of products that offer improved performance characteristics, including higher data transfer rates, higher bandwidth, advanced packaging solutions, lower power consumption, improved read/write reliability, and increased memory density.
We face intense competition in the semiconductor memory and storage markets. To remain competitive, we must continuously develop and implement new products and technologies and decrease manufacturing costs in spite of inflationary pressures, changing technologies, rapid market changes, and regulatory uncertainty. Our success is largely dependent on obtaining returns on our R&D investments, efficient utilization of our manufacturing infrastructure, development and integration of advanced product and process technologies, market acceptance of our diversified portfolio of semiconductor-based memory and storage solutions, and efficient capital spending.
Products, Market, and Sales
Product Technologies
Our product portfolio of memory and storage solutions, advanced solutions, and storage platforms is based on our high-performance semiconductor memory and storage technologies, including DRAM, NAND, and NOR. We sell our products through our business units into various markets in numerous forms, including components, modules, SSDs, managed NAND, multi-chip packages, and wafers. Many of our system-level solutions combine NAND, a controller, firmware, and in some cases DRAM.
DRAM: DRAM products are dynamic random access memory semiconductor devices with low latency that provide high-speed data retrieval with a variety of performance characteristics. DRAM products lose content when power is turned off (“volatile”) and are most commonly used in the data center, client PC, graphics, industrial, mobile, and automotive markets.
In 2025, we began shipping the industry’s first 1γ (1-gamma) production node, which is our first DRAM node incorporating EUV lithography and offers further improvements in power efficiency, performance, and bit density compared to our prior DRAM node products. Our 1γ DRAM node is ramping well and on track to become the highest-volume node in our history. The majority of our DRAM bit production in the fourth quarter of 2026 was on our leading-edge 1γ node.
7 | 2026 10-K
High-Bandwidth Memory (“HBM”): A 3D stacked DRAM architecture that utilizes through-silicon via connections for more efficient communication, giving it the ability to achieve a higher bandwidth while consuming less power compared to other memory types. This makes it ideal for applications that require high data throughput and energy efficiency, such as AI applications and high-performance computing.
Double Data Rate (“DDR”): DDR memory transfers data twice per clock cycle, resulting in improved speeds, power efficiency, and storage density. DDR5 is the fifth generation of this technology and offers the critical improvements in bandwidth and power efficiency necessary to meet the growing needs of high-performance computing, AI, and data-intensive applications.
Low-Power DRAM (“LPDDR”): Engineered for mobile devices and applications requiring low power consumption. LPDDR products generally operate at a lower voltage than standard DRAM products and are beneficial to any power-conscious application. The benefits of LPDDR memory are being realized by many market segments, including mobile, PC, automotive, and data center.
Graphics DRAM (“GDDR”): High-performance memory solution designed for graphics cards, gaming consoles, and high-performance computing applications. GDDR memory is optimized for high-bandwidth workloads encountered by graphics processing units, offering faster data rates and efficient data processing capabilities.
Total reported DRAM revenue was $100.68 billion in 2026, $28.58 billion in 2025, and $17.60 billion in 2024.
NAND: NAND products are non-volatile, re-writable semiconductor storage devices that provide high-capacity, low-cost storage with a variety of performance characteristics. NAND is used in SSDs for the data center, client PC, consumer, and automotive markets, and in removable storage markets. Managed NAND is used in smartphones and other mobile devices, and in the consumer, automotive, and embedded markets. Low-density NAND is ideal for applications like automotive, surveillance, machine-to-machine, automation, printer, and home networking.
In 2024, we began volume production of Micron G9 NAND, representative of the industry's ninth-generation 3D NAND node. The majority of our NAND bit production in 2026 was on leading-edge Micron G8 and G9 NAND nodes. Our NAND flash includes triple-level cell (“TLC”) and quad-level cell (“QLC”), each with varying levels of storage density, performance, and endurance.
Solid State Drives (“SSDs”): SSD storage products incorporate NAND, a controller, and firmware to offer significant performance and features over hard disk drives, including smaller form factors, faster read and write speeds, higher reliability, and lower power consumption needed to address the growing demands of data-centric workloads, ever-increasing expectations of client users, and the stringent requirements of automotive and industrial applications.
Managed NAND: Managed NAND combines NAND flash with a sophisticated controller and firmware in a single package. This integration allows the memory to manage itself, handling tasks like wear leveling, bad block management, and error correction internally, freeing the host system from these tasks. Products such as embedded MultiMediaCards (“e.MMC”) and universal flash storage (“UFS”) offer solutions that are compact and reliable, making them widely used across the mobile, automotive, and industrial markets.
Multi-Chip Packages (“MCPs”): Designed to provide high-performance, compact, and efficient memory solutions by integrating multiple types of memory, generally LPDDR and NAND, into a single package. MCPs are used in embedded internet of things (“IoT”) applications, automotive systems, mobile devices, and industrial devices where space and power efficiency are critical.
Total reported NAND revenue was $31.79 billion in 2026, $8.50 billion in 2025, and $7.23 billion in 2024.
NOR: NOR products are non-volatile, re-writable semiconductor memory devices that provide fast read speeds. NOR is most commonly used for reliable code storage (e.g., boot, application, operating system, and execute-in-place code in an embedded system) and for frequently changing small data storage and is ideal for automotive, industrial, and consumer applications.
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Products by Business Unit and Market
Cloud Memory Business Unit (“CMBU”)
CMBU is focused on memory solutions for large hyperscale cloud customers, and HBM for all data center customers. In addition to HBM, CMBU sales include DDR, LPDDR, and GDDR.
Data Center: CMBU sales to the data center end market are driven by server demand across the cloud market and include our portfolio of HBM, high-capacity dual in-line memory modules (“DIMMs”), and low-power server DRAM solutions.
Overall cloud growth continues to be driven by strong demand for generative AI capabilities by enterprises across multiple verticals, sovereign AI, and the shift of both infrastructure and workloads from on-premises to the cloud. Cloud servers supporting AI and data-centric workloads require significantly increasing quantities of DRAM, including HBM, and NAND as the task of turning data into insight becomes increasingly memory-centric.
In 2026, HBM3E 12-high represented the majority of our HBM shipments. In 2026, we began volume production of our HBM4 36GB 12-high with increased bandwidth and superior power efficiency enabled by our 1β (1-beta) process node, and we delivered samples of HBM4 48GB 16-high to multiple key customers to power next-generation AI platforms. Our HBM4 uses advanced complementary metal-oxide-semiconductor (“CMOS”) and advanced metallization process technologies on the base logic die and DRAM core dies, which are designed and manufactured in-house. This, along with our unique HBM design, packaging, and test capability, enables our industry-leading performance and low-power leadership. Development of HBM4E, our next-generation HBM product leveraging our 1γ DRAM technology node, is well underway, and we expect to ramp volume in calendar 2027.
As modern servers pack more processing cores into central processing units (“CPUs”), the memory bandwidth per CPU core has been decreasing. Our DDR5 alleviates this bottleneck by providing higher bandwidth than previous generations, enabling improved performance and scaling. In 2026, we delivered qualification samples of our 256GB DDR5 registered dual in-line memory modules (“RDIMMs”), built on 1γ DRAM technology and advanced 3D die stacking. This module provides capacity, speed, and power efficiency, helping data center architects scale AI infrastructure more efficiently. We also began volume production of LPDDR5X in a small outline compression attached memory module form factor designed to enable higher memory capacity, substantially lower power consumption, and faster performance for a variety of AI and general-purpose computing workloads.
Total reported CMBU revenue was $43.09 billion in 2026, $13.52 billion in 2025, and $3.79 billion in 2024. CMBU sales to the data center market in 2026 consisted primarily of our DDR5, HBM, and LPDDR5 products.
Core Data Center Business Unit (“CDBU”)
CDBU is focused on storage solutions for all data center customers, including data center SSDs and NAND components, and memory solutions for OEM data center, enterprise, and NeoCloud customers. NeoCloud customers are AI-focused cloud service providers that are distinct from traditional hyperscale cloud providers.
Data Center SSDs and NAND: The rapid proliferation of AI, cloud computing, and big data are fueling demand for high-performance and high-capacity storage in data centers. In 2026, we began volume production of our G9 NAND-based PCIe Gen6 high-performance data center SSDs, which accelerate AI training and inference workloads with faster data transfers and improve energy efficiency. In 2026, we also began shipping our 245TB 6600 ION SSD, built with G9 QLC NAND, with improved rack-scale storage density for data centers and designed to support AI, cloud, enterprise and hyperscale workloads, including next-generation AI data lakes and cloud-scale file and object storage.
Data Center DRAM: CDBU sales to OEM data center customers are driven by server and storage demand to support enterprise and NeoCloud customers, and our sales consisted primarily of DDR5 and DDR4.
9 | 2026 10-K
Total reported CDBU revenue was $37.59 billion in 2026, $7.23 billion in 2025, and $4.98 billion in 2024. CDBU sales primarily included sales of our DDR5 and DDR4 RDIMMs, data center SSDs, as well as component NAND sales of QLC. Sales to the data center SSD market in 2026 consisted primarily of our 5400, 6550 ION, 6600 ION, 7450, 7500, 7550, 7600, 9550, and 9650 series SSDs.
Mobile and Client Business Unit (“MCBU”)
MCBU is focused on memory and storage solutions for the mobile and client segments. Additionally, MCBU sales include DRAM sold to the consumer market and component DRAM and NAND (TLC and QLC).
The proliferation of AI-ready devices, from smartphones, tablets, AI PCs, and personal AI workstations, continues to increase demand for higher-capacity, higher-bandwidth, and lower-power memory and storage. On-device AI requires data and models to be processed locally, increasing DRAM and storage content needs and making power efficiency, thermal efficiency, battery life, and responsiveness key market requirements. Our LPDDR portfolio, enabled by our advanced technology process nodes, are a critical enabler of AI at the edge across mobile and client devices.
Mobile: Consists of memory products sold into the smartphone and other mobile-device markets, specifically LPDDR. MCBU offers a portfolio of LPDDR solutions designed for next-generation smartphones to accelerate AI applications in the mobile market.
Our focus is providing memory solutions to the flagship and high-end smartphone segments, leveraging our 1ß and 1γ technology process nodes. In 2026, we began volume shipments of our 1γ 16Gb LPDDR5X product to leading smartphone OEMs and sampled our 1γ 24Gb LPDDR5X product to multiple smartphone customers. We also began shipping qualification samples of our 1γ 16Gb LPDDR6 product, marking a milestone in next-generation memory technology.
Client: Our memory and storage solutions sold into the client PC market support both commercial and consumer PC unit growth. These products primarily consist of DRAM modules, SSDs, packaged DRAM, and packaged NAND. Next-generation PCs include high-performance neural processing chipsets and AI capabilities, which increase memory and storage requirements. Personal AI workstations are also emerging as a new client category, often leveraging 128GB+ of DRAM to provide powerful on-device AI capabilities. Memory is a critical factor in enabling these systems to run larger models and process data locally, resulting in more responsive AI experiences.
We are focused on providing solutions to the high-end and mainstream client PC segments for both personal and enterprise use. Our memory and storage products are critical to enabling AI, as data is the foundation for training, retrieval, inference, and enabling exceptional user experiences at the edge. Our client SSDs deliver the speed, power efficiency, security features, and capacity required for AI-enabled PCs and workstations. In 2026, we successfully completed qualification with lead customers on our G9 Gen5 QLC-based NAND client SSD, which is designed to expand capacity and improve responsiveness for mainstream PCs and ultra-thin laptops.
Consumer and Components: Our consumer products were sold under the brand name Crucial until an exit of that portion of our business was announced in December 2025. The portfolio consisted of DRAM modules and SSDs that were sold through retail channels. Our ongoing components business supplies DRAM and NAND to channel partners who package and sell DRAM modules and SSDs to other third parties, in addition to electronics manufacturing services companies who deliver fully assembled consumer products.
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Financial statements
data from SEC XBRL filings. Values are as-reported; restatements supersede originals. Values reported in .
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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This discussion should be read in conjunction with the consolidated financial statements and accompanying notes for the year ended September 3, 2026. All period references are to our fiscal periods unless otherwise indicated. Our fiscal year is the 52- or 53-week period ending on the Thursday closest to August 31. Fiscal 2026 contained 53 weeks and fiscal 2025 and 2024 each contained 52 weeks. All tabular dollar amounts are in millions, except per share amounts.
Overview
For an overview of our business, see Part I, Item 1. Business, Overview.
Industry Conditions
Memory and Storage Demand
AI-driven memory and storage demand growth is outpacing industry supply. In 2026, we continued to benefit from substantial improvements in pricing and margins, reflecting strong demand growth, driven in large part by the continued advancement of AI. The AI-driven growth in the data center has accelerated demand for memory and storage at a rate greater than our ability and the industry’s ability to increase supply. This has led to decisions on supply allocation that may impact certain customers and end markets. Robust overall DRAM and NAND demand and constrained supply has led to increased pricing and improved the profitability across our portfolio.
In 2025, we benefited from substantial improvements in DRAM pricing, volumes and margins as compared to 2024, reflecting strong demand growth, driven in part by the continued advancement of AI. During 2025, we shifted a portion of our DRAM supply to the data center and hyperscale cloud markets to meet the strong demand fueled by AI, resulting in a revenue mix weighted more prominently toward segments experiencing higher growth. The pivot to higher-growth segments, together with our strong execution, robust overall industry DRAM demand, and constrained supply, led to improved profitability across our DRAM portfolio. In 2025, NAND revenue increased from 2024 on higher bit shipments due to demand growth. The 2025 NAND gross margin percentage increased from 2024 due to cost reductions.
Strategic Customer Agreements
The evolving industry landscape, characterized by strong long-term customer demand for memory solutions and structurally constrained supply growth, has elevated the strategic importance of memory to our customers’ product roadmaps. As customers increasingly seek to secure committed long-term access to advanced memory technology and committed long-term memory supply, we have experienced increased customer engagement in strategic commitments. In the third and fourth quarters of 2026, we entered into, and expect to continue to enter into, strategic customer agreements. These agreements provide customers with contracted supply assurance and greater pricing visibility, and provide us with greater visibility and improved stability in our business performance.
Strategic customer agreements are structured as take-or-pay agreements, with binding commitments for specific volumes over the multi-year contract terms. Pricing for our contracts is either fixed or periodically negotiated, with the majority of the strategic customer agreements having pricing that is subject to minimum and maximum bands. We expect gross margins from our strategic customer agreements with price bands, even at floor pricing levels, to yield gross margins meaningfully above our peak quarterly margins in any past cycle. Accordingly, we believe these agreements accelerate the transformation of our business model and will significantly enhance the durability and predictability of our financial performance.
55 | 2026 10-K
Results of Operations
Consolidated Results
| For the year ended | 2026 | 2025 | 2024 | |||||||||||||||||
| Revenue | $ | 133,188 | 100 | % | $ | 37,378 | 100 | % | $ | 25,111 | 100 | % | ||||||||
| Cost of goods sold | 25,684 | 19 | % | 22,505 | 60 | % | 19,498 | 78 | % | |||||||||||
| Gross margin | 107,504 | 81 | % | 14,873 | 40 | % | 5,613 | 22 | % | |||||||||||
| Research and development | 5,650 | 4 | % | 3,798 | 10 | % | 3,430 | 14 | % | |||||||||||
| Selling, general, and administrative | 1,947 | 1 | % | 1,205 | 3 | % | 1,129 | 4 | % | |||||||||||
Other operating (income) expense, net | 567 | — | % | 100 | — | % | (250) | (1) | % | |||||||||||
| Operating income | 99,340 | 75 | % | 9,770 | 26 | % | 1,304 | 5 | % | |||||||||||
| Interest income (expense), net | 978 | 1 | % | 19 | — | % | (33) | — | % | |||||||||||
Other non-operating income (expense), net | (647) | — | % | (135) | — | % | (31) | — | % | |||||||||||
Income tax (provision) benefit | (14,761) | (11) | % | (1,124) | (3) | % | (451) | (2) | % | |||||||||||
Equity in net income (loss) of equity method investees | 59 | — | % | 9 | — | % | (11) | — | % | |||||||||||
| Net income | $ | 84,969 | 64 | % | $ | 8,539 | 23 | % | $ | 778 | 3 | % | ||||||||
Total Revenue: Total revenue was impacted by the factors described in the section titled “Industry Conditions—Memory and Storage Demand” above.
Total revenue for 2026 increased 256% as compared to 2025 primarily due to increases in sales of both DRAM and NAND products.
•Sales of DRAM products increased 252% primarily due to an approximate 180% increase in average selling prices and a mid-20% range increase in bit shipments.
•Sales of NAND products increased 274% primarily due to an approximate 200% increase in average selling prices and a mid-20% range increase in bit shipments.
Total revenue for 2025 increased 49% as compared to 2024 primarily due to increases in sales of both DRAM and NAND products.
•Sales of DRAM products increased 62% primarily due to a low-40% range increase in average selling prices and a mid-teen percentage increase in bit shipments.
•Sales of NAND products increased 18% primarily due to a high-teen percentage increase in bit shipments.
Consolidated Gross Margin: Our consolidated gross margin has been impacted by the factors described in the section titled “Industry Conditions—Memory and Storage Demand” above. Our consolidated gross margin percentage improved to 81% for 2026 from 40% for 2025 as a result of improvements in margins for both DRAM and NAND products. Margins improved primarily due to increases in average selling prices and also benefited from favorable mix and manufacturing cost reductions due to continued strong execution.
Our consolidated gross margin percentage improved to 40% for 2025 from 22% for 2024 as a result of improvements in margins for both DRAM and NAND products. DRAM margins improved primarily due to increases in average selling prices, an increased mix of higher-margin products, including HBM, and manufacturing cost reductions driven by improvements in product and process technology. NAND margins improved primarily due to manufacturing cost reductions. Our consolidated gross margin for 2024 reflected $987 million of benefit due to lower costs from the sale of inventories written down to their net realizable value in 2023.
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Revenue by Business Unit
| For the year ended | 2026 | 2025 | 2024 | |||||||||||||||||
CMBU | $ | 43,085 | 32 | % | $ | 13,524 | 36 | % | $ | 3,792 | 15 | % | ||||||||
CDBU | 37,592 | 28 | % | 7,229 | 19 | % | 4,984 | 20 | % | |||||||||||
MCBU | 36,601 | 27 | % | 11,859 | 32 | % | 11,667 | 46 | % | |||||||||||
AEBU | 15,886 | 12 | % | 4,753 | 13 | % | 4,631 | 18 | % | |||||||||||
All other | 24 | — | % | 13 | — | % | 37 | — | % | |||||||||||
| $ | 133,188 | $ | 37,378 | $ | 25,111 | |||||||||||||||
Percentages of total revenue may not total 100% due to rounding.
Changes in revenue for each business unit for 2026 as compared to 2025 were as follows:
•CMBU revenue increased 219% primarily due to increases in average selling prices and bit shipments.
•CDBU revenue increased 420% primarily due to increases in average selling prices and bit shipments.
•MCBU revenue increased 209% primarily due to increases in average selling prices, partially offset by lower bit shipments as MCBU product supply was redirected to other business units.
•AEBU revenue increased 234% primarily due to increases in average selling prices and bit shipments.
Changes in revenue for each business unit for 2025 as compared to 2024 were as follows:
•CMBU revenue increased 257% primarily due to increases in DRAM bit shipments and average selling prices driven by accelerating AI demand in cloud server markets for HBM, high-capacity dual in-line memory modules (“DIMMS”), and low-power server DRAM. During 2025, CMBU revenue benefited from a shift of our DRAM supply to meet the strong demand in high-value data center markets.
•CDBU revenue increased 45% primarily due to increases in average selling prices for both data center DRAM and NAND and NAND bit shipments due to increased demand for data center SSDs.
•MCBU revenue increased 2% primarily due to increases in DRAM and NAND revenue. Increases in MCBU DRAM sales due to higher average selling prices were partially offset by decreases in bit shipments as MCBU product supply was constrained to meet demand from higher-value segments. Increases in NAND sales due to higher bit shipments were partially offset by decreases in NAND average selling prices.
•AEBU revenue increased 3% primarily due to increases in DRAM and NAND bit shipments, partially offset by declines in average selling prices for both DRAM and NAND as a result of pricing pressure for certain legacy products.
Operating Income (Loss) by Business Unit
| For the year ended | 2026 | 2025 | 2024 | |||||||||||||||||
CMBU | $ | 31,225 | 72 | % | $ | 6,129 | 45 | % | $ | 244 | 6 | % | ||||||||
CDBU | 29,539 | 79 | % | 2,180 | 30 | % | 255 | 5 | % | |||||||||||
MCBU | 29,208 | 80 | % | 1,981 | 17 | % | (1) | — | % | |||||||||||
AEBU | 11,217 | 71 | % | 557 | 12 | % | 432 | 9 | % | |||||||||||
All other | 2 | 8 | % | (1) | (8) | % | 18 | 49 | % | |||||||||||
| $ | 101,191 | $ | 10,846 | $ | 948 | |||||||||||||||
Percentages reflect operating income (loss) as a percentage of revenue for each business unit.
Operating income was higher for each business unit in 2026 as compared to 2025 primarily due to increases in average selling prices. Operating income for CMBU, CDBU, and AEBU in 2026 also benefitted from higher bit shipments.
57 | 2026 10-K
Changes in operating income or loss for each business unit for 2025 as compared to 2024 were as follows:
•CMBU operating income increased primarily due to higher bit shipments and increases in average selling prices driven by robust AI demand in cloud server markets, particularly for HBM, DIMMs, and low-power server DRAM products. CMBU operating income benefited from a shift of our DRAM supply to meet the strong demand in high-value data center markets. These improvements were partially offset by higher R&D expenses.
•CDBU operating income increased primarily due to increases in data center average selling prices, higher bit shipments, and manufacturing cost reductions.
•MCBU operating income (loss) improved primarily due to increases in DRAM average selling prices, manufacturing cost reductions, and higher NAND bit shipments, partially offset by decreases in NAND average selling prices. MCBU operating income (loss) was also adversely impacted by decreases in DRAM bit shipments as MCBU product supply was constrained to meet demand from higher-value segments.
•AEBU operating income increased primarily due to manufacturing cost reductions and higher bit shipments, partially offset by declines in average selling prices.
Operating Expenses and Other
Research and Development: R&D expenses vary primarily with the number of development and pre-qualification wafers processed and end-product solutions developed, personnel costs, and the cost of advanced equipment dedicated to new product and process development. 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, functionality, and reliability. R&D expenses can vary significantly depending on the timing of product qualification and product specifications.
R&D expenses for 2026 increased 49% as compared to 2025 primarily due to increases in employee compensation, including higher variable compensation expense, and higher volumes of development and pre-qualification wafers, as we ramp R&D investments in support of long-term opportunities in memory and storage. R&D expenses for 2025 increased 11% as compared to 2024 primarily due to increases in employee compensation, depreciation expense, and higher volumes of development and pre-qualification wafers.
Selling, General, and Administrative: SG&A expenses for 2026 increased 62% as compared to 2025 primarily due to increases in employee compensation, including higher variable compensation expense, and community investments. SG&A expenses for 2025 increased 7% as compared to 2024 primarily due to increases in employee compensation and professional services.
Interest Income (Expense), Net: Interest income (expense) improved in 2026 as compared to 2025 primarily due to an increase in interest income due to higher cash and investments balances and a decrease in interest expense due to lower debt balances. Interest income (expense) improved in 2025 as compared to 2024 primarily due to decreases in interest expense as a result of increased capitalized interest driven by higher levels of building construction, partially offset by decreases in interest income due to lower interest rates on our cash and investments.
Income Taxes: Our income tax (provision) benefit consisted of the following:
| For the year ended | 2026 | 2025 | 2024 | ||||||||
| Income before taxes | $ | 99,671 | $ | 9,654 | $ | 1,240 | |||||
| Income tax (provision) benefit | (14,761) | (1,124) | (451) | ||||||||
| Effective tax rate | 14.8 | % | 11.6 | % | 36.4 | % | |||||
The change in our effective tax rate for 2026 as compared to 2025 was primarily due to the 15% minimum tax Pillar Two Model Rules (“Pillar Two”). Singapore enacted legislation to implement Pillar Two, effective for us in 2026, which largely offsets the benefit from our Singapore tax incentive arrangements. The change in our effective tax rate for 2025 as compared to 2024 was primarily due to changes in profitability.
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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. Singapore legislation surrounding Pillar Two largely offset our Singapore tax incentive arrangements, resulting in a net benefit from tax incentive arrangements for our tax provision of $2.21 billion (benefiting our diluted earnings per share by $1.93) and $1.05 billion (benefiting our diluted earnings per share by $0.93) for 2026 and 2025, respectively. As a result of the low level of profitability and the jurisdictional mix of income, the benefit from tax incentive arrangements was not material for 2024.
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 the following notes contained in Item 8. Financial Statements and Supplementary Data, Notes to Consolidated Financial Statements:
•Note 9. Debt
•Note 14. Equity Compensation Plans
•Note 17. Other Operating (Income) Expense, Net
•Note 18. Income Taxes
Liquidity and Capital Resources
Our primary source of liquidity is cash generated from operations. We also receive significant funding from government assistance and customer deposits associated with strategic customer agreements. In prior years, we have obtained significant financing from capital markets and financial institutions. Cash generated from operations is highly dependent on selling prices for our products, which can vary significantly from period to period.
Cash and marketable investments totaled $73.45 billion as of September 3, 2026, and $11.94 billion as of August 28, 2025. Our cash and investments consist primarily of bank deposits, money market funds, and liquid investment-grade, fixed-income securities, which are diversified among industries and individual issuers. To mitigate credit risk, we invest in high-credit-quality issuers and, by policy, generally limit the concentration of credit exposure by restricting the amount of investments with any single obligor. To mitigate interest rate risk, we primarily invest in shorter term securities. As of September 3, 2026, $5.12 billion of our cash and marketable investments was held by our foreign subsidiaries.
In 2026, we executed strategic customer agreements with a number of customers. These agreements included binding commitments for specific contractually enforceable volumes over the multi-year contract terms. Strategic customer agreements often include substantial customer deposits that are returned to the customer if the customer meets the minimum purchase commitments. If the customer does not meet the minimum purchase commitments, we may retain all or a portion of the deposit. In connection with these strategic customer agreements, we received cash deposits of $12.75 billion in 2026. Nearly all of the deposits are scheduled to be repaid between 2029 and 2031. Certain strategic customer agreements also include terms requiring our customers to maintain letters of credit with third-party financial institutions. Our right to access such letters of credit is contingent upon the occurrence of specified events of default or breach by our customers. Letters of credit are not recognized as revenue unless an event of default or breach has occurred. The aggregate amount of letters of credit issued, or contractually committed to be issued, by third-party financial institutions was $7 billion as of September 3, 2026. In the event of customer default or breach, our contractual recovery rights may include proceeds from letters of credit, rights to decrement customer deposits and other contractual remedies.
We continuously evaluate alternatives for efficiently funding our capital expenditures and ongoing operations. As of September 3, 2026, $2.00 billion was available to draw under our Revolving Credit Facility. Funding of certain significant capital projects is also supported by the receipt of government incentives. Our incentives are conditioned upon achieving or maintaining certain outcomes and satisfying compliance requirements and are subject to reduction, termination, or clawback.
59 | 2026 10-K
To develop new product and process technology, support future growth, achieve operating efficiencies, and maintain product quality, we must continue to invest in manufacturing technologies, facilities and equipment, and R&D. We estimate capital expenditures for property, plant, and equipment, net of proceeds from government incentives, to be approximately $11.5 billion in the first quarter of 2027, approximately $25 billion in the first six months of 2027, and higher in the second half of 2027. Actual amounts for 2027 will vary depending on market conditions and may vary from quarter to quarter due to the timing of expenditures and proceeds from government incentives. As of September 3, 2026, we had purchase obligations of approximately $4.18 billion for the acquisition of property, plant, and equipment, substantially all of which is expected to be paid within one year. For a description of other contractual obligations, such as finance leases, debt, and commitments, see Item 8. Financial Statements and Supplementary Data, Notes to Consolidated Financial Statements, Note 9. Debt as well as Note 10. Commitments.
In addition to the supply capacity we generate through our proprietary product and process technology that increases bit density per wafer, we will need to add new DRAM wafer capacity to support projected memory demand in the second half of the decade and beyond. Following the enactment of the CHIPS Act, we announced plans to invest in leading-edge memory manufacturing sites in Idaho and New York, based on CHIPS Act support through grants and investment tax credits.
As part of this plan, in September 2022, we broke ground on a leading-edge memory manufacturing fab in Boise, Idaho. Construction of the fab began in October 2023, with first DRAM wafer output projected in mid-calendar 2027. In June 2025, in connection with certain amendments to our CHIPS Act agreements, we announced plans for a second leading-edge memory manufacturing fab in Idaho to serve growing market demand fueled by AI. Construction activities for the second Idaho fab began in 2026, and we expect initial wafer output by late calendar 2028.
Our investment plan for New York includes construction of a leading-edge DRAM memory manufacturing site, consisting of up to four fabs to be built over the next 20-plus years, in Clay, New York. In January 2026, we broke ground on our first New York fab. In July 2026, we achieved the first concrete pour for the foundation of that fab, marking the transition from site preparation into vertical construction. We expect initial wafer output in calendar 2030. We expect these new fabs to be key to meeting our requirements for additional wafer capacity, in line with industry demand trends and our objective of maintaining stable bit share.
In 2026, we launched first production starts of our 1α (1-alpha) DDR4 technology in our Manassas, Virginia, fab, which will add to our capability to support the legacy product needs of our customers in auto, industrial, medical, aerospace and defense markets.
In December 2024, we entered into direct funding agreements with the U.S. Department of Commerce for up to $6.1 billion in direct funding pursuant to the CHIPS Act for a planned fab in Boise, Idaho, and two planned fabs in Clay, New York. In June 2025, we entered into amendments to the direct funding agreements to add a second planned fab in Boise, Idaho, and allocate certain award funding to the second planned Idaho fab from the $6.1 billion grants previously awarded under the December 2024 direct funding agreements. The direct funding for up to $6.1 billion remains unchanged. In June 2025, we also entered into a direct funding agreement with the U.S. Department of Commerce for up to $275 million in direct funding to expand and modernize our fab in Manassas, Virginia. The grants under the funding agreements represent total CHIPS Act grants of up to $6.4 billion in connection with our U.S. manufacturing expansion and modernization projects. In addition, we announced plans to bring advanced HBM packaging capabilities to the United States.
In addition to the CHIPS Act direct funding, we receive a 35% investment tax credit on qualified investments in U.S. semiconductor manufacturing under the CHIPS Act. We have also signed a non-binding term sheet with the State of New York that provides for up to $5.5 billion in funding for the planned four-fab facility over the next 20-plus years through a combination of tax credits for qualified capital investments and incentives for eligible new job wages.
In August 2026, we announced the establishment of Micron Research Labs, a long-horizon research institution headquartered in Boise, Idaho, supported by a planned investment of approximately $10 billion over the next decade to advance memory, compute and semiconductor manufacturing technologies.
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Outside the United States, we are investing in manufacturing technologies, facilities and equipment, and R&D, and advancing our global back-end assembly and test network. These investments support our product portfolio and extend our ability to meet global market demand in the future. Planned investments and those underway include the following:
•India: Our assembly and test facility in Gujarat commenced commercial shipments and started ramping production in 2026;
•Japan: We broke ground in July 2026 on a new cleanroom project at our Hiroshima manufacturing facility as part of our ongoing modernization efforts to support future DRAM technology transitions, including HBM and other AI-driven memory products. The project will expand available cleanroom space and we expect initial output in late calendar 2028, enhancing our advanced memory manufacturing capabilities and supporting future customer demand;
•Singapore: We broke ground in January 2025 on an HBM advanced packaging facility to meaningfully expand our total advanced packaging capacity beginning in early calendar 2027. In January 2026, we broke ground on an additional advanced wafer fab facility located within our existing NAND manufacturing complex. This facility will provide additional cleanroom space when it becomes operational in the second half of calendar 2028, helping address growing market demand for NAND technology driven by the rapid expansion of AI and data-centric applications; and
•Taiwan: We are modernizing and expanding our existing production capacity for DRAM and HBM products to meet rising market demand. In March 2026, we completed the acquisition of a wafer fabrication facility in Tongluo, Miaoli County, Taiwan, from Powerchip Semiconductor Manufacturing Corporation for cash consideration of $1.8 billion. We expect this site to support meaningful product shipments from the existing fab beginning in mid-calendar 2027. Adding to the existing fab, we have begun construction of a similar-sized second cleanroom at this site.
In certain countries outside of the United States, we receive or expect to receive, government incentives related to our investments. The amounts of these government incentives generally offset a portion of our planned investments and require us to meet certain conditions in order to receive such incentives.
See Item 8. Financial Statements and Supplementary Data, Notes to Consolidated Financial Statements, Note 15. Government Incentives.
In 2018, our Board of Directors has authorized the discretionary repurchase of up to $10 billion of our outstanding common stock through open-market purchases, block trades, privately-negotiated transactions, derivative transactions, and/or pursuant to Rule 10b5-1 trading plans and on October 8, 2026 our Board of Directors authorized an increase in the maximum amount of discretionary repurchases of our outstanding common stock to be made from December 9, 2026 to $35.16 billion. Any repurchases made will be in accordance with our CHIPS Act direct funding agreements. Our stock repurchase program and the new authorization have no expiration date, do not obligate us to acquire any common stock, and are subject to market conditions, restrictions applicable under our CHIPS Act direct funding agreements, and our ongoing determination of the best use of available cash. See Item 8. Financial Statements and Supplementary Data, Notes to Consolidated Financial Statements, Note 12. Equity, as well as Note 15. Government Incentives.
On September 30, 2026, our Board of Directors declared a quarterly dividend of $0.15 per share, payable in cash on October 29, 2026, to shareholders of record as of the close of business on October 14, 2026. The declaration and payment of any future cash dividends are at the discretion and subject to the approval of our Board of Directors. Our Board of Directors’ decisions regarding the amount and payment of dividends will depend on many factors, including, but not limited to, our financial condition, results of operations, capital requirements, business conditions, debt service obligations, contractual restrictions, industry practice, legal requirements, regulatory constraints, and other factors that our Board of Directors may deem relevant.
We expect that our cash and investments, cash flows from operations, funding from government incentives, customer deposits under strategic customer agreements, and available financing will be sufficient to meet our requirements at least through the next 12 months and thereafter for the foreseeable future.
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Cash Flows
| For the year ended | 2026 | 2025 | 2024 | ||||||||
| Net cash provided by operating activities | $ | 89,675 | $ | 17,525 | $ | 8,507 | |||||
Net cash used for investing activities | (61,641) | (14,087) | (8,309) | ||||||||
| Net cash provided by (used for) financing activities | 630 | (850) | (1,842) | ||||||||
| Effect of changes in currency exchange rates on cash, cash equivalents, and restricted cash | 81 | 6 | 40 | ||||||||
| Net increase (decrease) in cash, cash equivalents, and restricted cash | $ | 28,745 | $ | 2,594 | $ | (1,604) | |||||
Operating Activities: Cash provided by operating activities reflects net income adjusted for certain non-cash items, including depreciation expense, amortization of intangible assets, and stock-based compensation, and the effects of changes in operating assets and liabilities.
The increase in cash provided by operating activities for 2026 as compared to 2025 was primarily due to higher net income in 2026, adjusted for non-cash items, an increase in accounts payable and accrued expenses mostly related to income and other taxes and salaries, wages, and benefits, an increase in other current liabilities resulting mainly from higher consideration payable to customers for pricing adjustments, and an increase in noncurrent liabilities largely due to higher noncurrent income taxes payable related to the implementation of Pillar Two. These increases were partially offset by a significant increase in receivables due to higher revenue in 2026.
The increase in cash provided by operating activities for 2025 as compared to 2024 was primarily due to higher net income in 2025 adjusted for non-cash items, the effect of changes in receivables and accounts payable and accrued expenses, and a decrease in inventory, partially offset by a decrease in other current liabilities.
Investing Activities: For 2026, net cash used for investing activities consisted primarily of $32.88 billion of net outflows from purchases, maturities, and sales of available-for-sale securities, $30.71 billion of expenditures for property, plant, and equipment, and $1.05 billion of purchases of non-marketable equity securities, partially offset by $3.32 billion of proceeds from government incentives to offset capital expenditures.
For 2025, net cash used for investing activities consisted primarily of $15.86 billion of expenditures for property, plant, and equipment and $192 million of net outflows from purchases, maturities, and sales of available-for-sale securities, partially offset by $2.01 billion of proceeds from government incentives to offset capital expenditures.
For 2024, net cash used for investing activities consisted primarily of $8.39 billion of expenditures for property, plant, and equipment and $205 million of net outflows from purchases, maturities, and sales of available-for-sale securities, partially offset by $315 million of proceeds from government incentives to offset capital expenditures.
Financing Activities: For 2026, net cash provided by financing activities consisted primarily of $12.75 billion of proceeds from customer contract liability deposits on strategic customer agreements; partially offset by $10.04 billion of repayments of debt; $1.13 billion for the repurchases of common stock for withholdings on employee equity awards; $650 million for the acquisition of 2.5 million shares of our common stock under our share repurchase authorization; and $610 million for the payments of dividends to shareholders. See Item 8. Financial Statements and Supplementary Data, Notes to Consolidated Financial Statements, Note 16. Revenue and Customer Contract Liabilities and Note 9. Debt.
For 2025, net cash used for financing activities consisted primarily of $4.62 billion of repayments of debt; $522 million for the payments of dividends to shareholders; and $340 million for the repurchases of common stock for withholdings on employee equity awards; partially offset by approximately $4.43 billion of proceeds from the issuance of debt.
For 2024, net cash used for financing activities consisted primarily of $1.90 billion of repayments of debt; $513 million for the payments of dividends to shareholders; $300 million for the acquisition of 3.2 million shares of our common stock under our share repurchase authorization; and $233 million for the repurchases of common stock for withholdings on employee equity awards; partially offset by approximately $1.00 billion of proceeds from the issuance of debt.
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Critical Accounting Estimates
The preparation of financial statements and related disclosures in conformity with U.S. GAAP requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, expenses, and related disclosures. Estimates and judgments are based on historical experience, forecasted events, and various other assumptions that we believe to be reasonable under the circumstances. Estimates and judgments may vary under different assumptions or conditions and involve a significant level of uncertainty. We evaluate our estimates and judgments on an ongoing basis. Our management believes the accounting policies below are critical in the portrayal of our financial condition and results of operations and require management’s most difficult, subjective, or complex judgments.
Contingencies: We are subject to the possibility of losses from various contingencies. Significant judgment is necessary to estimate the probability and amount of potential losses. An accrual is made when a potential loss is both probable and reasonably estimable. When accounting for the resolution of contingencies, significant judgment may be necessary to determine whether losses pertain to prior, current, or future periods, which affects the timing of recognition in the results of operations.
Government incentives: We receive incentives from governmental entities related to capital expenditures, expenses, and other activities. The government incentives we receive may require that we meet or maintain specified spending levels and other operational metrics and may be subject to reimbursement if such conditions are not met or maintained. Failure to comply with these terms and conditions could result in termination of incentive programs or clawbacks of incentive amounts received.
Government incentives are recognized in the financial statements based on the underlying principal criteria for earning the incentives when there is reasonable assurance that the conditions of the government incentives are met and the incentive will be received. Incentives related to the acquisition or construction of property, plant and equipment are recognized as a reduction in the carrying amounts of the related assets and as a reduction of subsequent depreciation expense over the useful lives of the assets. Incentives related to specific operating activities are offset against the related expense in the period the expense is incurred. For each project, we estimate the total expected project costs and recognize a proportionate benefit as qualified project costs are incurred. As the estimated total expected qualified project cost changes, we adjust our estimate of the recognized proportionate benefit.
Income taxes: We are required to estimate our provision for income taxes and amounts ultimately payable or recoverable in numerous tax jurisdictions around the world. These estimates involve significant judgment and interpretations of regulations and are inherently complex. Resolution of income tax treatments in individual jurisdictions may not be known for many years after completion of the applicable year. We are also required to evaluate the realizability of our deferred tax assets on an ongoing basis in accordance with U.S. GAAP, which requires an assessment of our performance and other relevant factors. Realization of deferred tax assets is dependent on our ability to generate future taxable income. Our income tax provision or benefit is dependent, in part, on our ability to forecast future taxable income in the United States, Japan, Malaysia, and other jurisdictions. Such forecasts are inherently difficult and involve significant judgments including, among others, projecting future average selling prices and sales volumes, manufacturing and overhead costs, levels of capital spending, and other factors that significantly impact our analyses of the amount of net deferred tax assets that are more likely than not to be realized.
63 | 2026 10-K
Inventories: Inventories are stated at the lower of cost or net realizable value, with cost being determined on a first-in, first-out (“FIFO”) basis. Cost includes depreciation, labor, material, and overhead costs, including product and process technology costs. Determining net realizable value of finished goods and work in process inventories involves significant judgments, including projecting future average selling prices, future sales volumes, and future cost per part. To project average selling prices and sales volumes, we review recent sales volumes, existing customer orders, current contract prices, industry analyses of supply and demand, and general economic trends. To project cost per part, we review trends and historical results and consider known changes in our cost structure as applicable. Actual selling prices may vary significantly from projected prices due to the volatile nature of the semiconductor memory and storage markets. When these analyses reflect estimated net realizable values below our manufacturing costs, we recognize a charge to cost of goods sold in advance of when inventories are actually sold. As a result, the timing of when product costs are charged to costs of goods sold can vary significantly. Differences in future average selling prices used in calculating lower of cost or net realizable value adjustments can result in significant changes in the estimated net realizable value of finished goods and work in process inventories and accordingly the amount of write-down recognized.
U.S. GAAP provides for products to be grouped into categories in order to compare costs to net realizable values. The amount of any inventory write-down can vary significantly depending on the determination of inventory categories. We review the major characteristics of product type and markets in determining the unit of account for which we perform the lower of cost or net realizable value analysis and categorize all inventories (including DRAM, NAND, and other memory) as a single group.
Property, plant, and equipment: We periodically assess the estimated useful lives of our property, plant, and equipment based on technology node transitions, capital spending, and equipment re-use rates. We also review the carrying value of property, plant, and equipment for impairment when events and circumstances indicate that the carrying value of an asset or group of assets may not be recoverable from the estimated future cash flows expected to result from its use and/or disposition. In cases where undiscounted expected future cash flows are less than the carrying value, an impairment loss is recognized equal to the amount by which the carrying value exceeds the estimated fair value of the assets. The estimate of future cash flows involves numerous assumptions which require significant judgment by us, including, but not limited to, future use of the assets for our operations versus sale or disposal of the assets, future selling prices for our products, and future production and sales volumes.
Revenue: We estimate a liability for returns using the expected value method based on historical returns. In addition, we generally offer price protection to our distributors, which is a form of variable consideration that decreases the transaction price. We use the expected value method, based on historical price adjustments and current pricing trends, to estimate the amount of revenue recognized from sales to distributors. Differences between the estimated and actual amounts are recognized as adjustments to revenue.
Recently Adopted Accounting Standards
See Item 8. Financial Statements and Supplementary Data, Notes to Consolidated Financial Statements, Note 2. Recently Adopted Accounting Standards.
Recently Issued Accounting Standards
See Item 8. Financial Statements and Supplementary Data, Notes to Consolidated Financial Statements, Note 3. Recently Issued Accounting Standards.
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Recent insider activity
| Date | Insider | Role | Action | Shares | Price | Value |
|---|---|---|---|---|---|---|
| 2026-10-16 | Deboer Scott J | Pres. & Chief Tech & Prod Offr | Sell | -28,545 ×3 | $900.00 | -$25,690,216 |
| 2026-10-14 | RAY MICHAEL CHARLES | SVP, Chief Legal Officer | Sell | -6,328 ×28 | $929.75 | -$5,883,460 |
| 2026-08-21 | MEHROTRA SANJAY | President and CEO | Sell | -40,000 ×27 | $968.90 | -$38,756,162 |
| 2026-08-18 | Sadana Sumit | EVP and Chief Business Officer | Sell | -15,000 | $934.29 | -$14,014,350 |
Source: SEC Form 4 filings.
Next expected filings
- ~2026-12-17 10-Q expected by 2027-01-05 (in 50 days)
- ~2027-03-18 10-Q expected by 2027-04-06 (in 141 days)
- ~2027-06-24 10-Q expected by 2027-07-13 (in 239 days)
- ~2027-10-08 10-K expected by 2027-11-01 (in 345 days)
Predicted from historical filing cadence; not an SEC commitment.
Recent SEC filings
- 2026-10-09 10-K Annual Report
- 2026-09-30 8-K Earnings Release; Financial Statements and Exhibits
- 2026-08-26 8-K Officer/Director Change; Financial Statements and Exhibits
- 2026-06-25 10-Q Quarterly Report
- 2026-06-24 8-K Earnings Release; Financial Statements and Exhibits
- 2026-06-09 8-K Officer/Director Change; Financial Statements and Exhibits
- 2026-04-17 S-8 Employee Benefit Plan Registration
- 2026-04-01 8-K Other Events; Financial Statements and Exhibits
- 2026-03-25 8-K Other Events; Financial Statements and Exhibits
- 2026-03-19 10-Q Quarterly Report
- 2026-03-18 8-K Earnings Release; Financial Statements and Exhibits
- 2025-12-18 10-Q Quarterly Report
- 2025-12-17 8-K Earnings Release; Financial Statements and Exhibits
- 2025-10-21 8-K Officer/Director Change; Financial Statements and Exhibits
- 2025-10-03 10-K Annual Report