Micron Technology, Inc.

Data and privacy · Data protection and privacy laws

New and evolving laws and regulations relating to cybersecurity, data privacy, and AI impose requirements for information confidentiality, integrity, availability, personal and proprietary data collection, storage, use, sharing, deletion, and AI solutions that must be safe, transparent, fair, secure, human-focused, and accountable.

Industry regulation · Safety and environmental regulations

The manufacture of our products requires the use of facilities, equipment, chemicals, and materials that are subject to a broad array of laws and regulations. This includes increasing regulations on a class of chemicals known as per- and polyfluoroalkyl substances (PFAS).

Tax and financial reporting · Tax compliance and changes in tax law

Our provision for income taxes and cash tax liabilities in the future could be adversely affected by changes in the geographic mix of our earnings among jurisdictions, challenges by tax authorities to our tax positions, and changes in tax laws and regulations. Nearly all European Union member states have enacted Pillar Two legislation, which will be effective for us in 2025.

Legal and litigation · Intellectual property disputes

From time to time others have asserted, and may in the future assert, that our products or manufacturing processes infringe upon, misappropriate, misuse, or otherwise violate their intellectual property rights. Any of these types of claims could subject us to significant costs to defend or resolve such claims.

Human capital and workforce · Skills shortage and training requirements

Semiconductor fabs are complex, capital-intensive projects requiring specialized knowledge and expertise. Our construction projects are highly dependent on available sources of materials, specialized equipment, labor, and skilled sub-contractors. Concurrent semiconductor expansion projects across the industry introduce significant competition for the limited pool of construction talent.

Human capital and workforce · Talent acquisition and retention

To remain competitive, we must maintain a highly skilled, diverse workforce and effectively manage succession for key roles. Hiring, retaining and motivating qualified executives and other skilled talent is critical to our business and competition can be intense.

Supply chain and procurement · Supplier operation and dependance

Only a limited number of suppliers are capable of delivering certain materials, components, and services that meet our standards, and in some cases, materials are provided by a single or sole source. Shortages or increases in lead times have occurred in the past and may occur in the future. China is the predominant producer of rare earth elements, minerals, and metals.

Customer and revenue · Customer concentration and key customer dependence

Approximately one-half of our total revenue comes from our top ten customers. A disruption in our relationship with any of these customers could adversely affect our business. The loss of, or restrictions on our ability to sell to, one or more of our major customers could have a material adverse effect on our business.

Strategic execution · Merger acquisition and divestiture risks

Acquisitions and the formation or operation of alliances involve numerous risks, including integrating the operations, technologies, and products of acquired or newly formed entities, increasing capital expenditures, increased debt levels, and the assumption of unknown or underestimated liabilities.

Market position and competition · Pricing pressure and margin compression

In the past five years, annual percentage changes in DRAM average selling prices have ranged from plus low-teen percentage range to a minus high-40% range. In the past five years, annual percentage changes in NAND average selling prices have ranged from plus low-30% to a minus low-50% range.

Market position and competition · Competitive pressure and market share loss

We face intense competition from companies including Kioxia Holdings Corporation, Samsung Electronics Co., Ltd., SK hynix Inc., and Western Digital Corporation. Some of our competitors are large corporations or conglomerates that may have a larger market share and greater resources to invest in technology.

Innovation and product development · Intellectual property protection and infringement

Despite our system of controls over our intellectual property, it may be possible for our current or future competitors to obtain, copy, use, or disclose, illegally or otherwise, our product and process technology or other proprietary information. The laws of some foreign countries may not protect our intellectual property to the same degree as do U.S. laws.

Credit and liquidity · Debt service and covenant compliance

As of August 29, 2024, we had debt with a carrying value of $13.40 billion and may incur additional debt. Our debt obligations could require us to use a large portion of our cash flow to pay principal and interest on debt, which will reduce the amount of cash flow available to fund our business activities.

Credit and liquidity · Credit risk and customer defaults

We have numerous arrangements with financial institutions that subject us to counterparty default risks, including cash deposits, investments, and derivative instruments. Additionally, we are subject to counterparty default risk from our customers for amounts receivable from them.

Capital structure and performance · Dividend policy and capital allocation

The declaration and payment of any dividend is subject to the approval of our Board of Directors and our dividend may be discontinued or reduced at any time. There can be no assurance that we will declare cash dividends in the future in any particular amounts, or at all.

Reputation and brand · Esg environmental social governance performance

There has been an increased focus from stakeholders on environmental, social, and governance matters, including greenhouse gas emissions and climate-related risks, sustainability, renewable energy, water stewardship, waste management, diversity, equality and inclusion. Achieving these goals may entail significant costs.

Reputation and brand · Corporate social responsibility

We and many of our customers have adopted responsible sourcing programs that require us to meet certain environmental, social and governance criteria. Some of our customers may elect to disqualify us as a supplier if we are unable to verify that our performance or products meet the specifications of our customers' responsible sourcing programs.

Geopolitical and trade · Trade policies tariffs and sanctions

International trade disputes, geopolitical tensions, and military conflicts have led to new and increasing export restrictions, trade barriers, tariffs, and other trade measures. The U.S. government has in the past and continues to restrict American firms, including us, from selling products and software to certain of our customers.

Economic and market conditions · Economic recession and downturns

Downturns in regional or worldwide economies, due to inflation, geopolitics, major central bank policy actions including interest rate increases, or public health crises, have harmed our business in the past and current and future downturns could also adversely affect our business.

Digital transformation and innovation · Artificial intelligence and automation

We are increasingly incorporating AI capabilities into the development of technologies and our business operations, and into our products and services. AI technology is complex and rapidly evolving, and may expose us to significant competitive, legal, regulatory, and other risks. The implementation of AI can be costly and there is no guarantee that our use of AI will enhance our technologies.