Micron Technology, Inc.
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ITEM 1. BUSINESS
Overview
We are an industry leader in innovative memory and storage solutions transforming how the world uses information to enrich life for all. With a relentless focus on our customers, technology leadership, and manufacturing and operational excellence, Micron delivers a rich portfolio of high-performance DRAM, NAND, and NOR memory and storage products through our Micron® and Crucial® brands. Every day, the innovations that our people create fuel the data economy, enabling advances in artificial intelligence (AI) and compute-intensive applications that unleash opportunities — from the data center to the intelligent edge and across the client and mobile user experience.
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, 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.
Business Segments
In the fourth quarter of 2025, we reorganized our business units. All prior-period segment amounts have been retrospectively adjusted to reflect this reorganization. We have the following four business units, which are our reportable segments:
•Cloud Memory Business Unit (“CMBU”): Focused on memory solutions for large hyperscale cloud customers, and HBM for all data center customers.
•Core Data Center Business Unit (“CDBU”): Focused on memory solutions for mid-tier cloud, enterprise, and OEM data center customers and storage solutions for all data center customers.
•Mobile and Client Business Unit (“MCBU”): Focused on memory and storage solutions for the mobile and client segments.
•Automotive and Embedded Business Unit (“AEBU”): Focused on memory and storage solutions for the automotive, industrial, and consumer segments.
7 | 2025 10-K
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. The majority of our DRAM bit production in 2025 was on our leading-edge 1ß (1-beta) node.
High-Bandwidth Memory (“HBM”): A 3D stacked DRAM architecture that utilizes through-silicon via (“TSV”) 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 $28.58 billion in 2025, $17.60 billion in 2024, and $10.98 billion in 2023.
NAND: NAND products are non-volatile, re-writeable 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 2025 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.
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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 $8.50 billion in 2025, $7.23 billion in 2024, and $4.21 billion in 2023.
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.
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 includes 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 the shift of both infrastructure and workloads from on-premises to the cloud. Cloud-native workloads are driving growth through use cases such as AI-enabled intelligent edge devices and augmented reality platforms that store and access data in the cloud or rely on the cloud for compute capability. 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 2024, we began volume production of our 8-high 24GB HBM3E with increased bandwidth and superior power efficiency enabled by our advanced 1β process node. In the fourth quarter of 2025, HBM3E 12-high represented the majority of our HBM shipments. This enhanced version of HBM delivers faster data rates, improved thermal response, and a higher monolithic die density within the same package footprint as previous generations. In 2025, we delivered samples of HBM4 36GB 12-high to multiple key customers to power next-generation AI platforms.
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 2024, we qualified and began shipping our 128GB DDR5 server module, built on a monolithic 32GB DRAM die and powered by our 1ß node. This innovative product provides an industry alternative to existing 3D TSV-based solutions to address the rigorous speed and capacity demands of memory-intensive generative AI applications. In 2025, we began volume production of LPDDR5 in a small outline compression attached memory module (“SOCAMM”) form factor to enable easier server manufacturability and serviceability and to help drive broader LPDDR adoption in the server market.
9 | 2025 10-K
Total reported CMBU revenue was $13.52 billion in 2025, $3.79 billion in 2024, and $1.87 billion in 2023. CMBU sales to the data center market in 2025 consisted primarily of our HBM, DDR5 and DDR4, LPDDR5, and GDDR6 products.
Core Data Center Business Unit (“CDBU”)
CDBU is focused on memory solutions for mid-tier cloud, enterprise, and OEM data center customers and storage solutions for all data center customers, including data center SSDs and NAND components.
Data Center DRAM: CDBU sales to OEM data center customers are driven by server and storage demand to support mid-tier cloud and enterprise customers, and our sales consisted primarily of DDR5 and DDR4.
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 2025, we qualified and began shipping our 9550 series SSD to meet the growing demands of AI, high-performance computing, and many other workloads. This fully integrated solution enables improved performance, power efficiency, and security features for data center operators. In 2025, we also qualified and began shipping our 6550 ION SSD, which delivers lower power while providing better performance and better data center footprint efficiency with more density per rack for data centers. Both products utilized Micron’s G8 NAND and internally designed and vertically integrated engineering capability consisting of a controller, firmware, NAND, and DRAM. We also strengthened our portfolio with our first G9-based data center products, including our PCIe Gen6 SSDs.
Total reported CDBU revenue was $7.23 billion in 2025, $4.98 billion in 2024, and $2.12 billion in 2023. CDBU sales to the data center SSD market in 2025 consisted primarily of our 5400, 6500 ION, 7450, 7500, and 9550 series SSDs. CDBU sales also included sales of our DDR5 and DRR4 and component NAND sales of QLC and TLC.
Mobile and Client Business Unit (“MCBU”)
MCBU is focused on memory and storage solutions for the mobile and client segments. Additionally, MCBU sales include our Crucial-branded SSDs and DRAM sold to the consumer market and component DRAM and NAND sales of TLC and QLC.
Mobile: Consists of memory and storage products sold into the smartphone and other mobile-device markets, including discrete NAND, DRAM, and managed NAND products. MCBU offers a portfolio of MCPs and managed NAND, including products which combine e.MMC/UFS solutions with LPDDR, along with a suite of unique firmware features designed for next-generation smartphones and to accelerate AI applications in the mobile market.
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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 2. 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 August 28, 2025. 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 contains 53 weeks and fiscal 2025 contains 52 weeks. The third quarter of 2026 contains 13 weeks and the fourth quarter of 2026 contains 14 weeks. All tabular dollar amounts are in millions, except per share amounts.
Overview
Micron Technology, Inc. is an industry leader in innovative memory and storage solutions transforming how the world uses information to enrich life for all. With a relentless focus on our customers, technology leadership, and manufacturing and operational excellence, Micron delivers a rich portfolio of high-performance DRAM, NAND, and NOR memory and storage products. Every day, the innovations that our people create fuel the data economy, enabling advances in artificial intelligence (AI) and compute-intensive applications that unleash opportunities — from the data center to the intelligent edge and across the client and mobile user experience.
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, 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.
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. DRAM products include High-Bandwidth Memory (“HBM”), which is a 3D stacked DRAM architecture that utilizes through-silicon via (“TSV”) connections for more efficient communication giving it the ability to achieve a higher bandwidth while consuming less power compared to other memory types.
NAND: NAND products are non-volatile, re-writeable 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
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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.
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.
Industry Conditions
Memory and Storage Demand
AI-driven memory and storage growth is outpacing industry supply. In the third quarter of 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 as the overall market demand for memory and storage exceeds overall industry supply. Robust overall DRAM and NAND demand and constrained supply has led to increased pricing and improved the profitability across our portfolio.
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 contracted supply assurance and greater pricing visibility, and provide us higher 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 most agreements is either fixed, or is subject to minimum and maximum pricing. The largest agreements generally have a ceiling price for existing products that approximates the market price in the second calendar quarter of 2026, and a floor price through the term of the agreement. A minority of the agreements do not have any fixed pricing or price bands, as pricing for those agreements is subject to market conditions.
We expect gross margins from our strategic customer agreements with price bands, even at floor pricing levels, to yield gross margins well 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.
27 | 2026 Q3 10-Q
Results of Operations
Consolidated Results
| Third Quarter | Second Quarter | Third Quarter | Nine Months Ended | |||||||||||||||||||||||||||||
| 2026 | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||
| Revenue | $ | 41,456 | 100 | % | $ | 23,860 | 100 | % | $ | 9,301 | 100 | % | $ | 78,959 | 100 | % | $ | 26,063 | 100 | % | ||||||||||||
| Cost of goods sold | 6,400 | 15 | % | 6,105 | 26 | % | 5,793 | 62 | % | 18,502 | 23 | % | 16,244 | 62 | % | |||||||||||||||||
| Gross margin | 35,056 | 85 | % | 17,755 | 74 | % | 3,508 | 38 | % | 60,457 | 77 | % | 9,819 | 38 | % | |||||||||||||||||
| Research and development | 1,316 | 3 | % | 1,250 | 5 | % | 965 | 10 | % | 3,737 | 5 | % | 2,751 | 11 | % | |||||||||||||||||
| Selling, general, and administrative | 407 | 1 | % | 344 | 1 | % | 318 | 3 | % | 1,088 | 1 | % | 891 | 3 | % | |||||||||||||||||
| Other operating (income) expense, net | 15 | — | % | 26 | — | % | 56 | 1 | % | 43 | — | % | 61 | — | % | |||||||||||||||||
Operating income | 33,318 | 80 | % | 16,135 | 68 | % | 2,169 | 23 | % | 55,589 | 70 | % | 6,116 | 23 | % | |||||||||||||||||
| Interest income (expense), net | 215 | 1 | % | 123 | 1 | % | 12 | — | % | 403 | 1 | % | (3) | — | % | |||||||||||||||||
| Other non-operating income (expense), net | (321) | (1) | % | (98) | — | % | (68) | (1) | % | (559) | (1) | % | (90) | — | % | |||||||||||||||||
| Income tax (provision) benefit | (4,978) | (12) | % | (2,371) | (10) | % | (235) | (3) | % | (8,178) | (10) | % | (695) | (3) | % | |||||||||||||||||
| Equity in net income (loss) of equity method investees | 9 | — | % | (4) | — | % | 7 | — | % | 13 | — | % | 10 | — | % | |||||||||||||||||
Net income | $ | 28,243 | 68 | % | $ | 13,785 | 58 | % | $ | 1,885 | 20 | % | $ | 47,268 | 60 | % | $ | 5,338 | 20 | % | ||||||||||||
Total Revenue: Total revenue for the third quarter and first nine months of 2026 was impacted by the factors described in the section titled “Industry Conditions—Memory and Storage Demand” above.
Total revenue for the third quarter of 2026 increased 74% as compared to the second quarter of 2026, primarily due to increases in sales of both DRAM and NAND products.
•Sales of DRAM products increased 67%, primarily due to a low-60% range increase in average selling prices and a low-single-digit percentage range increase in bit shipments.
•Sales of NAND products increased 99%, primarily due to a mid-80% range increase in average selling prices and a mid-single-digit percentage range increase in bit shipments.
Total revenue for the third quarter of 2026 increased 346% as compared to the third quarter of 2025, primarily due to increases in sales of both DRAM and NAND products.
•Sales of DRAM products increased 343%, primarily due to a low-260% range increase in average selling prices and a low-20% range increase in bit shipments.
•Sales of NAND products increased 361%, primarily due to a mid-310% increase in average selling prices and a low-double-digit increase in bit shipments.
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Total revenue for the first nine months of 2026 increased 203% as compared to the first nine months of 2025, primarily due to increases in sales of both DRAM and NAND products.
•Sales of DRAM products increased 211%, primarily due to an approximate 140% increase in average selling prices and an approximate 30% increase in bit shipments.
•Sales of NAND products increased 183%, primarily due to an approximate 130% increase in average selling prices and a low-20% range 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.” Our consolidated gross margin percentage increased to 85% for the third quarter of 2026 from 74% for the second quarter of 2026 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 continued strong execution and favorable mix.
Our consolidated gross margin percentage improved to 85% for the third quarter of 2026 from 38% for the third quarter of 2025 and improved to 77% for the first nine months of 2026 from 38% for the first nine months of 2025. Improvements in our consolidated gross margins for the third quarter and first nine months of 2026 as compared to corresponding periods of 2025 were due to improvements in margins for both DRAM and NAND products. Margins improved, primarily due to increases in average selling prices and, to a lesser extent, favorable mix and manufacturing cost reductions.
Revenue by Business Unit
| Third Quarter | Second Quarter | Third Quarter | Nine Months Ended | |||||||||||||||||||||||||||||
| 2026 | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||
CMBU | $ | 13,769 | 33 | % | $ | 7,749 | 32 | % | $ | 3,386 | 36 | % | $ | 26,802 | 34 | % | $ | 8,981 | 34 | % | ||||||||||||
CDBU | 11,524 | 28 | % | 5,687 | 24 | % | 1,530 | 16 | % | 19,590 | 25 | % | 5,652 | 22 | % | |||||||||||||||||
MCBU | 11,521 | 28 | % | 7,711 | 32 | % | 3,255 | 35 | % | 23,487 | 30 | % | 8,099 | 31 | % | |||||||||||||||||
AEBU | 4,634 | 11 | % | 2,708 | 11 | % | 1,127 | 12 | % | 9,062 | 11 | % | 3,319 | 13 | % | |||||||||||||||||
All other | 8 | — | % | 5 | — | % | 3 | — | % | 18 | — | % | 12 | — | % | |||||||||||||||||
| $ | 41,456 | $ | 23,860 | $ | 9,301 | $ | 78,959 | $ | 26,063 | |||||||||||||||||||||||
Percentages of total revenue may not total 100% due to rounding.
Changes in revenue for each business unit for the third quarter of 2026 as compared to the second quarter of 2026 were as follows:
•CMBU revenue increased 78%, primarily due to increases in average selling prices and bit shipments.
•CDBU revenue increased 103%, primarily due to increases in average selling prices and favorable mix.
•MCBU revenue increased 49%, primarily due to increases in average selling prices, partially offset by lower bit shipments.
•AEBU revenue increased 71%, primarily due to increases in average selling prices and bit shipments.
Changes in revenue for each business unit for the third quarter and first nine months of 2026 as compared to the corresponding periods of 2025 were as follows:
•CMBU revenue increased 307% and 198%, respectively, primarily due to increases in average selling prices and bit shipments.
•CDBU revenue increased 653% and 247%, respectively, primarily due to increases in average selling prices and bit shipments.
•MCBU revenue increased 254% and 190%, respectively, primarily due to increases in average selling prices, partially offset by lower bit shipments.
•AEBU revenue increased 311% and 173%, respectively, primarily due to increases in average selling prices and bit shipments.
29 | 2026 Q3 10-Q
Operating Income by Business Unit
| Third Quarter | Second Quarter | Third Quarter | Nine Months Ended | |||||||||||||||||||||||||||||
| 2026 | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||
CMBU | $ | 10,793 | 78 | % | $ | 5,127 | 66 | % | $ | 1,573 | 46 | % | $ | 18,804 | 70 | % | $ | 3,959 | 44 | % | ||||||||||||
CDBU | 9,519 | 83 | % | 3,809 | 67 | % | 307 | 20 | % | 14,218 | 73 | % | 1,789 | 32 | % | |||||||||||||||||
MCBU | 9,873 | 86 | % | 5,836 | 76 | % | 482 | 15 | % | 17,726 | 75 | % | 877 | 11 | % | |||||||||||||||||
AEBU | 3,493 | 75 | % | 1,682 | 62 | % | 126 | 11 | % | 5,802 | 64 | % | 265 | 8 | % | |||||||||||||||||
All other | 3 | 38 | % | 1 | 20 | % | 2 | 67 | % | 5 | 28 | % | 1 | 8 | % | |||||||||||||||||
| $ | 33,681 | $ | 16,455 | $ | 2,490 | $ | 56,555 | $ | 6,891 | |||||||||||||||||||||||
Percentages reflect operating income as a percentage of revenue for each business unit.
Changes in operating income for each business unit for the third quarter of 2026 as compared to the second quarter of 2026 were as follows:
•CMBU operating income was higher, primarily due to increases in average selling prices and higher bit shipments.
•CDBU operating income was higher, primarily due to increases in average selling prices.
•MCBU operating income was higher, primarily due to increases in average selling prices and favorable mix, partially offset by lower bit shipments.
•AEBU operating income was higher, primarily due to increases in average selling prices, higher bit shipments, and favorable mix.
Changes in operating income for each business unit for the third quarter and first nine months of 2026 as compared to the corresponding periods of 2025 were as follows:
•CMBU operating income was higher, primarily due to increases in average selling prices, higher bit shipments, and manufacturing cost reductions.
•CDBU operating income was higher, primarily due to increases in average selling prices, higher bit shipments, and manufacturing cost reductions.
•MCBU operating income was higher, primarily due to increases in average selling prices and manufacturing cost reductions, partially offset by lower bit shipments.
•AEBU operating income was higher, primarily due to increases in average selling prices, higher bit shipments, and manufacturing cost reductions.
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 the third quarter of 2026 increased 5% as compared to the second quarter of 2026, primarily due to increases in employee compensation. R&D expenses for the third quarter and first nine months of 2026 both increased 36%, as compared to the corresponding periods of 2025, primarily due to higher volumes of development and pre-qualification wafers, as we ramp R&D investments in support of long-term opportunities in memory and storage, and increases in employee compensation.
Selling, General, and Administrative: SG&A expenses for the third quarter of 2026 increased 18% as compared to the second quarter of 2026, primarily due to increases in employee compensation. SG&A expenses for the third quarter and first nine months of 2026 increased 28% and 22%, respectively, as compared to the corresponding periods of 2025, primarily due to increases in employee compensation.
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Interest Income (Expense), Net: Interest income (expense) improved in the third quarter of 2026 as compared to the second quarter of 2026 and for the third quarter and first nine months of 2026 as compared to the corresponding periods of 2025, primarily due to a decrease in interest expense due to lower debt balances and an increase in interest income due to higher cash and investments balances.
Income Taxes: Our income tax (provision) benefit consisted of the following:
| Third Quarter | Second Quarter | Third Quarter | Nine Months Ended | ||||||||||||||
| 2026 | 2026 | 2025 | 2026 | 2025 | |||||||||||||
Income before taxes | $ | 33,212 | $ | 16,160 | $ | 2,113 | $ | 55,433 | $ | 6,023 | |||||||
| Income tax (provision) benefit | (4,978) | (2,371) | (235) | (8,178) | (695) | ||||||||||||
| Effective tax rate | 15.0 | % | 14.7 | % | 11.1 | % | 14.8 | % | 11.5 | % | |||||||
The change in our effective tax rate for the third quarter of 2026, as compared to the second quarter of 2026 was primarily due to changes in profitability, which reduced the relative impact of discrete tax benefits. The change in our effective tax rate for the third quarter and first nine months of 2026, as compared to the corresponding periods of 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.
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted, introducing broad changes to the U.S. tax code, including modifications to corporate and international tax provisions, which primarily are effective for us beginning in 2026 and 2027. The aggregate impact of the OBBBA remains uncertain. We will continue to monitor future developments, including regulatory guidance and interpretations, which could have a material impact on our income tax provision. Further changes in the tax laws of foreign jurisdictions could arise as a result of the base erosion and profit-shifting project, including Pillar Two, undertaken by the Organisation for Economic Co-operation and Development. We continue to monitor for additional guidance and legislative changes related to Pillar Two in the jurisdictions where we operate.
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 1. Financial Statements, Notes to Consolidated Financial Statements:
•Note 9. Debt
•Note 13. Equity Compensation Plans
Liquidity and Capital Resources
Our primary sources of liquidity are cash generated from operations and financing obtained 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 $30.13 billion as of May 28, 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 through high-credit-quality financial institutions and by policy generally limit the concentration of credit exposure by restricting the amount of investments with any single obligor. As of May 28, 2026, $5.40 billion of our cash and marketable investments was held by our foreign subsidiaries.
31 | 2026 Q3 10-Q
We recently executed certain strategic customer agreements, including agreements executed subsequent to May 28, 2026. These agreements include binding commitments for specific volumes over the multi-year contract terms. Strategic customer agreements often include substantial customer deposits and related financial commitments. In connection with these strategic customer agreements, we expect to receive cash deposits and related financial commitments of $22 billion for agreements concluded to date. Approximately $18 billion of these commitments will be in the form of cash deposits.
We continuously evaluate alternatives for efficiently funding our capital expenditures and ongoing operations. As of May 28, 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.
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 $27 billion in 2026. Actual amounts for 2026 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 May 28, 2026, we had purchase obligations of approximately $2.93 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 and debt, see Item 1. Financial Statements, Notes to Consolidated Financial Statements, Note 9. Debt.
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. We plan to begin construction of the second Idaho fab in 2026, and 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, which will provide supply in 2030 and beyond. 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.
On December 9, 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. On June 11, 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. On June 11, 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.
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
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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 will start ramping production in 2026;
•Japan: We are modernizing our Hiroshima manufacturing facility to support future DRAM nodes and AI memory production;
•Singapore: We broke ground in January 2025 on an HBM advanced packaging facility to meaningfully expand our total advanced packaging capacity beginning in the first half of 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 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 U.S, 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.
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. Through May 28, 2026, we had repurchased an aggregate of $7.84 billion under the authorization. The repurchase authorization has no expiration date, does not obligate us to acquire any common stock, and is 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 1. Financial Statements, Notes to Consolidated Financial Statements, Note 11. Equity.
On June 24, 2026, our Board of Directors declared a quarterly dividend of $0.15 per share, payable in cash on July 21, 2026, to shareholders of record as of the close of business on July 6, 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.
Cash Flows
| Nine Months Ended | May 28, 2026 | May 29, 2025 | ||||||
| Net cash provided by operating activities | $ | 45,702 | $ | 11,795 | ||||
Net cash used for investing activities | (19,688) | (8,889) | ||||||
Net cash provided by (used for) financing activities | (10,646) | 214 | ||||||
| Effect of changes in currency exchange rates on cash, cash equivalents, and restricted cash | 8 | (3) | ||||||
| Net increase in cash, cash equivalents, and restricted cash | $ | 15,376 | $ | 3,117 | ||||
33 | 2026 Q3 10-Q
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 the first nine months of 2026 as compared to the first nine months of 2025 was primarily due to higher net income in the current year adjusted for non-cash items, an increase in accounts payable and accrued expenses mostly related to property, plant and equipment and income and other taxes, 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 the first nine months of 2026.
Recent insider activity
| Date | Insider | Role | Action | Shares | Price | Value |
|---|---|---|---|---|---|---|
| 2026-07-24 | MEHROTRA SANJAY | President and CEO | Sell | -40,000 ×42 | $932.25 | -$37,290,091 |
| 2026-07-23 | ALLEN SCOTT R. | CVP, Chief Accounting Officer | Sell | -879 | $1,000.00 | -$879,000 |
| 2026-07-01 | ARNZEN APRIL S | EVP and Chief People Officer | Sell | -40,000 ×18 | $1,083.94 | -$43,357,473 |
| 2026-06-30 | Dugle Lynn A | Director | Sell | -1,300 | $1,150.43 | -$1,495,559 |
| 2026-06-26 | MEHROTRA SANJAY | President and CEO | Sell | -40,000 ×49 | $1,158.38 | -$46,335,292 |
| 2026-05-29 | MEHROTRA SANJAY | President and CEO | Sell | -40,000 ×36 | $961.35 | -$38,454,116 |
| 2026-05-11 | GOMO STEVEN J | Director | Sell | -2,000 ×2 | $787.03 | -$1,574,070 |
| 2026-05-01 | MEHROTRA SANJAY | President and CEO | Sell | -40,000 ×27 | $536.26 | -$21,450,555 |
| 2026-05-01 | RAY MICHAEL CHARLES | SVP, Chief Legal Officer | Sell | -7,601 ×25 | $534.30 | -$4,061,207 |
Source: SEC Form 4 filings.
Next expected filings
- ~2026-10-02 10-K expected by 2026-10-26 (in 64 days)
- ~2026-12-17 10-Q expected by 2027-01-05 (in 140 days)
- ~2027-03-18 10-Q expected by 2027-04-06 (in 231 days)
- ~2027-06-24 10-Q expected by 2027-07-13 (in 329 days)
Predicted from historical filing cadence; not an SEC commitment.
Recent SEC filings
- 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
- 2025-09-23 8-K Earnings Release; Financial Statements and Exhibits
- 2025-06-26 10-Q Quarterly Report
- 2025-06-25 8-K Earnings Release; Financial Statements and Exhibits