Micron Technology

exIM

In stock-market psychology, I'd describe the mindset in that PistonHeads thread as persistent loss-aversion expressed as perma-bearishness.

This made me chuckle

I'm always amazed the amount of time/effort this type put into that mindset !

Adam Kay

There are others ...There is something faintly absurd about an investment forum obsessively marking our homework and service while apparently declining to mark its own. Markets have the useful habit of eventually replacing rhetoric with arithmetic.

Adam Kay

Micron’s $35 Billion Share Buyback: The Beginning of an Extraordinary Capital Return Programme?

Micron Technology’s announcement of a $35.16 billion share repurchase authorisation could prove to be one of the most significant developments in the company’s history. However, it is not simply the size of the announcement that matters. It is how the figure was calculated that offers perhaps the most compelling indication of what shareholders might expect over the coming quarters.

On 8 October, Micron’s board approved approximately $33 billion of additional repurchase capacity, bringing the total authorisation to $35.16 billion. Crucially, Micron’s SEC filing confirms that the increase was calculated using 100% of the previous quarter’s adjusted free cash flow, less specified deductions for dividends and government incentives.
The maths is striking. Micron generated $33.199 billion of adjusted free cash flow during its fiscal fourth quarter, with the resulting $33.025 billion, after dividends, forming the basis of the additional authorisation. This is not a coincidence. It establishes a direct relationship between the cash Micron generates and the amount its board is prepared to authorise for shareholder returns.

The implications could be enormous.
Micron’s management has already signalled its intention to return substantially all excess cash to shareholders. With restrictions governing repurchases under its CHIPS Act funding arrangements entering a new phase from 9 December 2026, the company is approaching an important turning point in capital allocation.
My central speculation is that this $35 billion announcement represents the first instalment of a much larger, recurring repurchase programme, rather than a one-off event.
If Micron continues to follow the same approach, future quarterly authorisations could increasingly reflect the free cash flow generated in each preceding quarter. This is not yet a formal commitment to quarterly increases or immediate execution, and each expansion requires board approval. Nevertheless, the precedent is unusually clear.
The potential scale becomes particularly interesting when considering fiscal 2027.

Under a bullish scenario in which Micron generates approximately $150 billion of annual free cash flow, the company would have the financial capacity to authorise extraordinarily repurchases. That represents an average of $37.5 billion per quarter, although actual cash generation will almost certainly fluctuate.
A series of quarterly authorisations broadly matching eligible free cash flow could therefore result in repurchase capacity expanding by well over $100 billion during the financial year, potentially approaching $150 billion after the relevant deductions.

Ducati996R

I’m sure that your are across this Adam …
How many shares does that buy back and then leave out there in people’s hands

2BToo

@Ducati996R said in Micron Technology:

I’m sure that your are across this Adam …
How many shares does that buy back and then leave out there in people’s hands

And another (possibly very stupid question): who's shares are being bought back? Are some investors getting out of MU?

Adam Kay

there are sales every day. MU(Treasury) is no different to any other buyer. It's all on the open market, no difference. $35B is circa 3% but the point is they are clearly signally that this is a quarterly proposal. 10%+ per annum

2BToo

Thanks Adam. That makes sense.

Slow Horses

What on earth is going on with MU stock, its all over the place!

Adam Kay

MU has become a trader's playground. The underlying fundamentals remain exceptionally strong, with DRAM supply tight, pricing rising and AI-driven demand continuing to accelerate. The market seems unable to decide whether to focus on short-term volatility or the extraordinary earnings and cash flow potential over the next several years. Personally, I'm focused on the latter. The daily price swings are largely noise.

Ducati996R

Did i see some news about another Chinese memory chip etc thingy thats the best thing since sliced bread earlier this week

Adam Kay

CXMT's DRAM 'breakthrough': a paper tiger dressed up as a Micron killer.

Another week, another breathless headline suggesting China's CXMT is about to threaten Micron's dominance in advanced memory. Apparently, announcing a new manufacturing process is now equivalent to successfully producing billions of reliable chips at competitive costs.

Rosenblatt analyst Kevin Cassidy described the supposed threat as a "paper tiger". That seems rather generous.

Let's deal with the facts.

CXMT's much-publicised 4F² architecture promises a theoretical 33% reduction in memory-cell area. Wonderful. A good analogy is the gap between climbing a ladder and climbing Everest . Where are the independently verified yields? Manufacturing costs? Customer qualifications? Commercial production volumes? There aren't any publicly demonstrated figures establishing that this process can compete with Micron.

And CXMT hasn't even demonstrated cost leadership with its existing DDR5. Industry estimates suggest its current manufacturing cost per bit is over 30% higher than that of the established DRAM leaders.

So we're supposed to believe that a manufacturer still playing catch-up on conventional DRAM is suddenly going to leapfrog Micron with an entirely new, considerably more complex architecture? On what evidence?

But here's what makes the entire scare story particularly ridiculous.

Even if CXMT somehow achieved technological parity tomorrow, it wouldn't magically solve the industry's capacity constraints. Advanced DRAM and HBM demand is absorbing enormous manufacturing resources, new capacity takes years to build and qualify, and the supply environment isn't transformed by a laboratory announcement.

And where exactly are the hyperscale customers lining up to install unproven Chinese DRAM in their multibillion-dollar AI data centres?

Microsoft? Amazon? Google? Meta?

These companies demand exceptionally high reliability, exhaustive qualification, proven supply continuity and strict security and procurement compliance. Geopolitical restrictions add another formidable obstacle.

Chinese DRAM achieving meaningful penetration of leading Western AI data centres is a prospect measured in years, if it happens at all. CXMT announcing a new cell architecture does absolutely nothing to change that.

Meanwhile, Micron is already manufacturing and shipping advanced memory at scale, investing in successive technology generations and benefiting from extraordinary structural demand.

CXMT isn't a credible near-term threat to Micron's advanced DRAM or HBM business. It is a potential longer-term competitor in parts of the commodity memory market, which is an entirely different proposition.

The bottom line: No proven commercial yields. No demonstrated cost advantage. No established hyperscaler qualifications for the new process. No evidence of meaningful near-term supply disruption.

Just a theoretical density improvement, an ambitious timetable and another round of market hysteria.

All bark, no benchmark.
CXMT increasingly resembles a Chihuahua barking at three Rottweilers: Micron, Samsung and SK Hynix.
Plenty of noise about technological breakthroughs, but where is the independently verified evidence of competitive yields, production costs, operating margins and sustained high-volume manufacturing?
Announcing a process is easy. Producing billions of reliable DRAM chips at competitive yields and margins is an entirely different proposition.
And with a public-market valuation to justify, there's every incentive to keep the good-news machine running.