AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-2: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 6/6 · 19/10/2026
Moat38
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
structural advantage · 2/4 · Capital-intensive manufacturing, shared processes and achieved cost reductions support meaningful capabilities and entry barriers. A sustained relative advantage over incumbent competitors is not demonstrated.
durability · 1/4 · Historical below-cost selling and price declines exceeding cost reductions demonstrate fragile protection across cycles. New multi-year commitments improve visibility but have no supplied downturn record.
customer dependency · 2/4 · Enforceable volume commitments and deposit-related remedies establish finite customer purchasing obligations. Coverage, renewals and technical switching costs remain unestablished.
erosion resilience · 1/4 · Cost reductions and recent pricing gains demonstrate recovery, but realized historical pricing damage and inventory write-downs show weak insulation. Capacity expansion is a prospective erosion risk, not a realized new downturn.
Pricing power44
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
realized pricing · 2/4 · Nine-month 2026 DRAM and NAND average selling prices increased approximately 140% and 130%, respectively, and full-year results benefited from higher prices. Historical severe declines and continuing segment-level price pressure make the overall evidence mixed; industry scarcity does not establish unilateral pricing power.
retention · 2/4 · Higher bit shipments provide indirect demand evidence, while enforceable multi-year commitments and financial security support future repeat purchasing. Neither customer-level retention rates nor completed renewal cycles are supplied.
margin resilience · 1/4 · Recent gross-margin expansion and cost reductions are substantial, but prior below-cost sales and inventory write-downs demonstrate weak through-cycle protection. Recovery is established; resilience during a renewed downturn is not.
contractual freedom · 2/4 · Fixed or periodically negotiated pricing provides some ability to reset terms. Minimum and maximum bands constrain most strategic agreements, and distributor price protection reduces transaction prices. Volume remedies strengthen enforceability rather than unrestricted pricing discretion.
Predictability39
Five consecutive annual periods. Equal weights: nondeclining revenue frequency; revenue-growth volatility (5–40pp); positive FCF frequency; FCF-margin volatility (3–20pp). Stability indicator, not a growth forecast.
- Nondeclining revenue years (%)
- 75.00
- Revenue growth volatility (pp)
- 110.86
- Positive FCF years (%)
- 80.00
- FCF margin volatility (pp)
- 26.65
Financial strength100
Equal-weight grades: debt/FCF (1–8x), net debt/earnings before interest and tax (0–5x), interest service (1–12x), current ratio (0.75–2x). Earnings use reported operating income, or reported pretax profit plus reported interest expense when operating income is unavailable. Interest service uses earnings/interest expense; if unavailable, it uses reported operating cash flow/cash interest paid, without relabeling cash paid as accrued expense. Nonpositive cash flow/earnings score 0 for their service component; reported zero interest with a positive numerator scores 100. Net cash scores 100 for net leverage. Missing disclosures remain unavailable. General nonfinancial-company rubric, not a credit rating; exceptional and nonoperating gains are not normalized out. IFRS finance-cost and cash-flow classifications retain their reported scope.
- debtFcfGrade
- 100.00
- netDebtEbitGrade
- 100.00
- interestCoverageGrade
- 100.00
- currentRatioGrade
- 100.00
- Debt / FCF (x)
- 0.09
- Net debt / operating income (x)
- -0.33
- Interest coverage (x)
- 937.17
- Current ratio (x)
- 3.31
Capital allocation86
Three-year equal-weight indicators: pretax return on average invested capital (0–25%; equity + debt − cash, each year and its prior year), share-count growth (0–5%, lower better), share-based cost/revenue (2–20%, lower better), consolidated FCF/net income (0–1x). Return uses reported operating income or, if unavailable, EBIT calculated from reported pretax profit plus reported interest expense; exceptional/nonoperating gains are not normalized out. Share-based cost uses the reported cash-flow add-back or, if absent, separately reported recognized compensation expense; the latter never becomes an FCF adjustment. Nonpositive net income scores 0 for cash conversion; absent income/FCF stays unavailable. Nonpositive invested capital has no defined return and remains unavailable. Does not establish acquisition quality or buyback timing.
- 3-year pre-tax operating return (%)
- 47.07
- 3-year average dilution (%)
- 1.03
- 3-year average SBC / revenue (%)
- 2.31
- cashConversionGrade
- 64.43
Management56
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
capital discipline · 2/4 · Fiscal 2026 operating cash generation comfortably exceeded disclosed capital expenditures, and substantial debt repayments were completed. However, cash generation benefited from liability increases, spending and noncancelable commitments are large, and historical financing needs show cyclicality. These outcomes support a mixed assessment rather than exceptional allocation skill.
incentive alignment · 2/4 · Actual fiscal 2025 performance-based grants, vesting thresholds, paid bonuses and clawback provisions establish alignment mechanisms. Profitability achievement was below target, but the higher-of-two-metrics formula and approved individual multipliers soften discipline. Full executive ownership evidence is missing.
execution · 3/4 · Achieved EUV-node shipments, NAND volume production, repeated manufacturing cost reductions and higher bit shipments demonstrate strong operating execution. This assessment partly uses indirect operating evidence; favorable industry pricing is not attributed entirely to management.
governance · 2/4 · Annual elections, proxy access, independent committees, a lead independent director and audited control processes provide substantive safeguards. Combined chairman and CEO authority and limited evidence of oversight outcomes prevent a stronger whole-governance assessment.
Evidence
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.
Business / customer contract pricing · Filed 09/10/2026
Under the strategic agreements, our customers have provided financial security in the form of cash deposits and letters of credit.
Business / strategic agreement financial security · Filed 09/10/2026
Certain Concentrations.
Competitive Conditions
We face intense competition in the semiconductor memory and storage markets from a number of companies, including Samsung Electronics Co., Ltd.; SK hynix Inc.; Kioxia Holdings Corporation; Sandisk Corporation; ChangXin Memory Technologies, Inc.
Business / Competitive Conditions · Filed 09/10/2026
(“CXMT”); and Yangtze Memory Technologies Co., Ltd.
Business / Competitive Conditions · Filed 09/10/2026
Some of our competitors are large corporations or conglomerates that may operate in jurisdictions with lower labor and compliance costs and may have a larger market share and greater resources to invest in technology, capitalize on growth opportunities, and withstand downturns in the semiconductor markets in which we compete.
Business / competitor resources and costs · Filed 09/10/2026
We, and some of our competitors, have plans to construct new fabrication facilities and/or ramp production at existing fabrication facilities to increase supply in response to a significant increase in demand for memory products across the industry.
Business / industry capacity expansion · Filed 09/10/2026
If competitors are more successful at developing or implementing new product or process technology, their products could have cost or performance advantages.
Business / competing technology · Filed 09/10/2026
Semiconductor manufacturing is capital intensive, requiring large investments in sophisticated facilities and equipment.
Business / Manufacturing · Filed 09/10/2026
Our DRAM, NAND, and NOR products share a number of common manufacturing processes, enabling us to leverage our product and process technology and certain resources and manufacturing infrastructure across these product lines.
Business / shared manufacturing processes · Filed 09/10/2026
Over the past five fiscal years, annual percentage changes in DRAM and NAND average selling prices have ranged from an increase of approximately 200% to a decrease of approximately 50%.
Risk Factors / historical selling-price volatility · Filed 09/10/2026
In recent periods, industry demand has outpaced supply, driving average selling prices higher, but as we and others increase supply, average selling prices may decline, particularly if demand growth slows or declines.
Risk Factors / industry supply and pricing · Filed 09/10/2026
Conversely, in some prior periods, average selling prices for our products have been below our manufacturing costs, and we may experience such circumstances in the future.
Risk Factors / historical sales below manufacturing costs · Filed 09/10/2026
Further, if we are unable to satisfy customer demand and customers are required to purchase products from our competitors, they may shift immediate and future purchases to such competitors, which could harm our customer relationships and adversely impact our access to certain end markets.
Risk Factors / customer purchase switching · Filed 09/10/2026
Efforts by us and our competitors to align supply to long-term customer agreements could contribute to industry supply exceeding demand if customers were to breach their purchase obligations and if overall demand is lower than anticipated.
Risk Factors / long-term purchase obligations · Filed 09/10/2026
In addition, customer purchases in excess of production needs to satisfy their obligations under long-term agreements may result in elevated customer inventories.
Risk Factors / customer inventories under long-term agreements · Filed 09/10/2026
If these conditions materialize, they may cause an oversupplied memory and storage market, downward pressure on pricing, and a material adverse effect on our business, results of operations, or financial condition.
Risk Factors / potential oversupply and pricing pressure · Filed 09/10/2026
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.
MD&A / fiscal 2026 consolidated gross margin · Filed 09/10/2026
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.
MD&A / pricing, mix and achieved manufacturing cost reductions · Filed 09/10/2026
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.
MD&A / DRAM manufacturing improvements · Filed 09/10/2026
NAND margins improved primarily due to manufacturing cost reductions.
MD&A / NAND manufacturing cost reductions · Filed 09/10/2026
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.
MD&A / prior inventory write-down effects · Filed 09/10/2026
•AEBU operating income increased primarily due to manufacturing cost reductions and higher bit shipments, partially offset by declines in average selling prices.
MD&A / AEBU realized pricing declines · Filed 09/10/2026
In 2026, we executed strategic customer agreements with a number of customers.
MD&A / executed strategic customer agreements · Filed 09/10/2026
These agreements included binding commitments for specific contractually enforceable volumes over the multi-year contract terms.
MD&A / enforceable multi-year volume commitments · Filed 09/10/2026
Strategic customer agreements often include substantial customer deposits that are returned to the customer if the customer meets the minimum purchase commitments.
MD&A / conditional return of customer deposits · Filed 09/10/2026
61 | 2026 10-K
Table of Contents
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.
MD&A / Cash Flows · Filed 09/10/2026
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.
MD&A / operating cash-flow drivers · Filed 09/10/2026
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.
MD&A / actual capital expenditures and incentive proceeds · Filed 09/10/2026
Commitments
As of September 3, 2026, we had noncancelable commitments with remaining contractual terms in excess of one year of approximately $10.8 billion for purchase obligations, of which approximately $1.3 billion will be due in 2027, $1.8 billion due in 2028, $1.4 billion due in 2029, $1.1 billion due in 2030, $800 million due in 2031, and $4.4 billion due in 2032 and thereafter.
Financial statement notes / noncancelable purchase commitments · Filed 09/10/2026
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.
Financial statement notes / contractual customer recovery rights · Filed 09/10/2026
In addition, the Company generally offers price protection to its distributors, which is a form of variable consideration that decreases the transaction price.
Auditor report / distributor price protection · Filed 09/10/2026
Based on this evaluation, management concluded that our internal control over financial reporting was effective as of September 3, 2026.
Controls and Procedures / management assessment · Filed 09/10/2026
The effectiveness of our internal control over financial reporting as of September 3, 2026 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report, which is included in Part II, Item 8, of this Annual Report on Form 10-K.
Controls and Procedures / independent audit of internal controls · Filed 09/10/2026
In 2025, we began shipping the 1γ production node, which is our first DRAM node incorporating EUV lithography.
Business / Research and Development / achieved DRAM shipments · Filed 03/10/2025
We also began volume production on our Micron G9 NAND node.
Business / Research and Development / NAND volume production · Filed 03/10/2025
Cash Flows
For the year ended
2025
2024
2023
Net cash provided by operating activities
$
17,525
$
8,507
$
1,559
Net cash used for investing activities
(14,087)
(8,309)
(6,191)
Net cash provided by (used for) financing activities
(850)
(1,842)
4,983
Effect of changes in currency exchange rates on cash, cash equivalents, and restricted cash
6
40
(34)
Net increase (decrease) in cash, cash equivalents, and restricted cash
$
2,594
$
(1,604)
$
317
Operating Activities: Cash provided by operating activities reflects net income (loss) adjusted for certain non-cash items, including depreciation expense, amortization of intangible assets, stock-based compensation, inventory write-downs, and asset impairments, and the effects of changes in operating assets and liabilities.
MD&A / historical cash flows and financing · Filed 03/10/2025
Average selling prices for our products that decline faster than our costs have recently had an adverse effect on our business and results of operations, and in future periods could have a material adverse effect on our business, results of operations, or financial condition.
Risk Factors / realized selling-price declines exceeding cost reductions · Filed 04/10/2024
•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.
MD&A / nine-month DRAM pricing and shipment outcomes · Filed 25/06/2026
•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.
MD&A / nine-month NAND pricing and shipment outcomes · Filed 25/06/2026
Financing Activities: For the first nine months of 2026, net cash used for financing activities consisted primarily of $9.38 billion of repayments of debt, which included the prepayment in full of the 2028 Notes, 2029 Term Loan A, 2029 A Notes, 2029 B Notes, and 2030 Notes and the partial prepayments of the 2031 Notes, 2032 Notes, 2033 A Notes, 2033 B Notes, 2035 A Notes, and 2035 B Notes; $762 million 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 $437 million for payments of dividends to shareholders.
MD&A / actual debt repayments and shareholder distributions · Filed 25/06/2026
As of February 26, 2026 and August 28, 2025, our future performance obligations beyond one year, which included customer prepayments and other contract liabilities, were not material.
Revenue recognition / February 2026 longer-term performance obligations · Filed 19/03/2026
BOARD LEADERSHIP STRUCTURE
Our Board is currently led by Sanjay Mehrotra, as our Chairman, President and Chief Executive Officer, and Lynn A.
Corporate Governance / combined chairman and CEO roles · Filed 25/11/2025
■Maintain a compensation recoupment ("clawback”) policy that provides for recoupment of incentive compensation paid to current and former executive officers in the event of an accounting restatement due to material noncompliance
■No excessive perquisites
■Maintain executive stock ownership guidelines
Compensation program / clawback and ownership guidelines · Filed 25/11/2025
Profitability goal achievement is based on the higher of adjusted non-GAAP net income or non-GAAP operating margin percent achievement.
Executive Compensation / fiscal 2025 profitability goal calculation · Filed 25/11/2025
Despite a year of record revenue, the Fiscal 2025 profitability goal achieved below target at 95%, which was based on the non-GAAP operating margin performance.
Executive Compensation / actual below-target profitability achievement · Filed 25/11/2025
Mehrotra, Bhatia, DeBoer and Sadana at 1.10 in recognition of their successful efforts in their respective areas.
Executive Compensation / approved individual performance multipliers · Filed 25/11/2025
Grant Date Fair Value of Stock (or Units)(4)
Threshold
Target
Max
Threshold
Target
Max
Sanjay Mehrotra
$
1,595,000
$
3,190,000
$
6,380,000
10/13/24
33,264
143,613
287,226
$
16,484,065
10/13/24
83,015
8,875,964
Mark Murphy
533,975
1,067,950
2,135,900
10/13/24
9,081
39,205
78,410
4,499,991
10/13/24
42,088
4,500,049
Manish Bhatia
572,400
1,144,800
2,289,600
10/13/24
9,585
41,382
82,764
4,749,878
10/13/24
44,426
4,750,028
Scott DeBoer
491,400
982,800
1,965,600
10/13/24
8,324
35,938
71,876
4,125,008
10/13/24
38,580
4,124,974
Sumit Sadana
584,719
1,169,438
2,338,875
10/13/24
9,585
41,382
82,764
4,749,878
10/13/24
44,426
4,750,028
(1)Represent estimated possible payouts for Fiscal 2025 under the STI plan.
Compensation tables / actual fiscal 2025 award grants · Filed 25/11/2025
Unless the threshold targets are achieved or exceeded, the vesting conditions will not be met and the awards will be forfeited.
Compensation tables / performance vesting thresholds · Filed 25/11/2025
Performance-Based Cash Awards
Bonuses were paid to the Named Executive Officers for Fiscal 2025 as a result of achievement of certain goals.
Compensation tables / bonuses actually paid · Filed 25/11/2025
Our bylaws provide a proxy access right permitting certain of our shareholders who have beneficially owned 3% or more of our common stock continuously for at least three years to submit director nominations via our proxy materials for up to 20% of the directors then serving.
Corporate Governance / existing proxy access right · Filed 25/11/2025
Our bylaws provide for the annual election of directors.
Corporate Governance / annual director elections · Filed 25/11/2025
Ninety percent of our Board is independent, and all of our standing committees are fully independent as well.
Corporate Governance / board and committee independence · Filed 25/11/2025
Dugle as our Lead Independent Director, providing strong independent leadership to our Board.
Corporate Governance / lead independent director · Filed 25/11/2025
