What changed in this filing

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Item 7. Management’s Discussion and Analysis

2025-10-03 compared with 2024-10-04 · 152 added, 142 removed, 167 unchanged (64% of the section changed)

8 unchanged sentences

Industry Conditions

Throughout 2024, we experienced substantial improvements in pricing and margins.

Increasing demand growth, driven in part by deployment of AI and mostly normal customer inventories, combined with industry-wide supply discipline, resulted in an industry supply and demand balance that substantially improved from 2023 conditions.

We executed well on pricing and improved our financial performance significantly from the start of the year.

We are exiting the year with excellent momentum and an industry-leading product portfolio.

In contrast, 2023 was a year of weak memory and storage industry demand in many end markets, stemming from global macroeconomic challenges and customer actions to reduce inventory levels.

These conditions, which began in the fourth quarter of 2022 and persisted into early 2024, led to significant reductions in average selling prices for both DRAM and NAND and reductions in bit shipments for DRAM.

We experienced declines in revenue across all our business segments and nearly all our end markets throughout 2023.

Also in 2023, China’s Cyberspace Administration (the “CAC”) conducted a cybersecurity review of our products sold in China and decided that our products presented a cybersecurity risk.

AI-driven demand is accelerating and is outpacing industry supply.

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, with emphasis on HBM products, 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, has 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.

We continue to prudently manage our NAND business to ensure we align our supply growth and technology node cadence with our projections of the demand environment.

Throughout 2024, we experienced substantial improvements in pricing and margins due to improving market conditions as compared to 2023.

In connection with improved market conditions in 2024, we reinstated our bonuses and phased out certain other temporary cost-saving measures that were implemented in 2023.

In 2023, China’s Cyberspace Administration (the “CAC”) conducted a cybersecurity review of our products sold in China and decided that our products presented a cybersecurity risk.

The CAC determined that critical information infrastructure operators in China may not purchase Micron products.

The CAC decision has impacted our business, particularly in the domestic data center and networking markets in China, and we have been working to mitigate that impact.

Our goal is to retain our worldwide DRAM and NAND market share.

In manufacturing, we have been fully utilized throughout most of 2024 on our high-volume manufacturing nodes where we are maximizing output against our current capacity, which we have proactively, structurally lowered.

Beginning in the latter part of 2022, we reduced capital expenditures and wafer starts for both DRAM and NAND in response to challenging market conditions and increased levels of our inventories.

In addition, to improve capital efficiency, we redeployed equipment from older technology nodes to support conversions to leading-edge nodes.

Since the number of wafer processing steps is higher for leading-edge nodes, this approach has resulted in a meaningful structural reduction in DRAM and NAND wafer capacity.

We believe this approach to node migration and consequent wafer capacity reduction was adopted across the industry.

We recognized period costs from fabrication facility underutilization of $382 million in 2023 and $165 million in the first quarter of 2024 due to wafer start reductions.

Subsequently, fabrication facility underutilization was reduced and principally related to legacy manufacturing capacity.

Accordingly, 2024 period costs beyond the first quarter were not significant.

In connection with improved 2024 market conditions, we reinstated our bonuses and phased out certain other temporary cost-saving measures that were implemented in 2023.

We took significant steps in 2023 to reduce our costs and operating expenses, both on a temporary and ongoing structural basis.

These measures included the 2023 Restructure Plan, as well as implementing productivity programs, suspension of our 2023 bonus, reductions in select product programs, lower discretionary spending, and cuts to 2023 executive salaries.

Under the 2023 Restructure Plan, we reduced our headcount by approximately 15% by the end of calendar 2023, through a combination of voluntary attrition and personnel reductions.

We incurred restructure charges of $171 million in 2023 primarily related to employee severance costs.

The 2023 Restructure Plan, which was substantially completed in 2023, yielded estimated cost savings of approximately $130 million per quarter (approximately 60% in cost of goods sold, 30% in R&D, and 10% in SG&A) subsequent to 2023.

51 | 2025 10-K

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Total Revenue:

Total revenue for 2024 and 2023 was impacted by the factors described in the section titled “Industry Conditions” above.

These conditions drove a recovery of average selling prices throughout 2024 after significant declines in average selling prices throughout 2023.

Total revenue was impacted by the factors described in the section titled “Industry Conditions” above.

These conditions drove substantial improvements in average selling prices throughout 2025 and 2024.

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.

Total revenue for 2024 increased 62% as compared to 2023 primarily due to increases in sales of both DRAM and NAND products.

• Sales of DRAM products increased 60% primarily due to a mid-40% range increase in bit shipments and a low-teen percentage range increase in average selling prices.

• Sales of NAND products increased 72% primarily due to a low-30% range increase in bit shipments and a low-30% percentage range increase in average selling prices.

Total revenue for 2023 decreased 49% as compared to 2022 primarily due to decreases in sales of both DRAM and NAND products.

• Sales of DRAM products decreased 51% primarily due to a high-40% range decline in average selling prices and decreases in bit shipments in the high-single-digit percent range.

• Sales of NAND products decreased 46% primarily due to a low-50% range decline in average selling prices partially offset by increases in bit shipments in the high-single-digit percent range.

Consolidated Gross Margin:

Our consolidated gross margin has been impacted by the factors described in the section titled “Industry Conditions” above and inventory write-downs in 2023 as detailed in the table below.

Our consolidated gross margin percentage improved to 22% for 2024 from negative 9% for 2023, as a result of improvements in margins for both DRAM and NAND products, primarily due to increases in average selling prices, and manufacturing cost reductions, the effects of charges to write down inventories to their NRV in 2023 and lower costs in 2024 from the sale of inventories written down in 2023 (as detailed in “Inventory NRV write-downs” below).

Our consolidated gross margin percentage decreased to negative 9% for 2023 from 45% for 2022 primarily due to declines in average selling prices for both DRAM and NAND, charges to write down inventories, and $382 million of facility underutilization costs in 2023.

Our consolidated gross margin has been impacted by the factors described in the section titled “Industry Conditions” above and the effects of 2023 inventory write-downs on our 2024 and 2023 gross margin, as detailed in the table below.

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 (as detailed in “Inventory NRV Write-Downs” below).

Our consolidated gross margin percentage improved to 22% for 2024 from negative 9% for 2023 as a result of improvements in margins for both DRAM and NAND products, primarily due to increases in average selling prices, manufacturing cost reductions, the effects of charges to write down inventories to their NRV in 2023, and lower costs in 2024 from the sale of inventories written down in 2023 (as detailed in “Inventory NRV Write-Downs” below).

Inventory NRV Write-Downs :

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For the year ended 2025 2024 2023

CNBU $ 9,513 38 % $ 5,710 37 % $ 13,693 45 %

MBU 6,354 25 % 3,630 23 % 7,260 24 %

EBU 4,614 18 % 3,637 23 % 5,235 17 %

SBU 4,592 18 % 2,553 16 % 4,553 15 %

All Other 38 — % 10 — % 17 — %

$ 13,524 36 % $ 3,792 15 % $ 1,872 12 %

7,229 19 % 4,984 20 % 2,124 14 %

11,859 32 % 11,667 46 % 7,394 48 %

4,753 13 % 4,631 18 % 4,139 27 %

13 — % 37 — % 11 — %

$ 37,378 $ 25,111 $ 15,540

Percentages of total revenue may not total 100% due to rounding.

Changes in revenue for each business unit for 2025 as compared to 2024 were as follows:

• CNBU revenue increased 67% driven by increases in bit shipments and DRAM average selling prices.

• MBU revenue increased 75% primarily due to increases in average selling prices and bit shipments for both mobile DRAM and NAND.

• EBU revenue increased 27% primarily due to increases in bit shipments, partially offset by declines in average selling prices.

• SBU revenue increased 80% primarily due to increases in average selling prices and bit shipments.

• 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.

Changes in revenue for each business unit for 2024 as compared to 2023 were as follows:

• CNBU revenue decreased 58% primarily due to declines in average selling prices for DRAM and decreases in bit shipments.

• MBU revenue decreased 50% primarily due to declines in average selling prices for both DRAM and NAND and decreases in NAND bit shipments.

• EBU revenue decreased 31% primarily due to declines in average selling prices for both DRAM and NAND and decreases in bit shipments.

• SBU revenue decreased 44% primarily due to declines in average selling prices for NAND partially offset by increases in bit shipments.

• CMBU revenue increased 103% driven by increases in DRAM bit shipments and average selling prices.

• CDBU revenue increased 135% primarily due to increases in NAND and DRAM bit shipments and average selling prices.

• MCBU revenue increased 58% primarily due to increases in DRAM and NAND bit shipments and average selling prices for both mobile and client markets.

• AEBU revenue increased 12% primarily due to increases in DRAM bit shipments, partially offset by declines in average selling prices.

53 | 2025 10-K

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For the year ended 2025 2024 2023

CNBU $ 980 10 % $ (585) (10) % $ 5,844 43 %

MBU 114 2 % (1,750) (48) % 2,160 30 %

EBU 199 4 % 382 11 % 1,752 33 %

SBU (362) (8) % (1,887) (74) % 513 11 %

All Other 17 45 % 8 80 % 12 71 %

$ 6,129 45 % $ 244 6 % $ (768) (41) %

2,180 30 % 255 5 % (563) (27) %

1,981 17 % (1) — % (3,189) (43) %

557 12 % 432 9 % 680 16 %

(1) (8) % 18 49 % 8 73 %

$ 10,846 $ 948 $ (3,832)

Percentages reflect operating income (loss) as a percentage of revenue for each business unit.

Changes in operating income or loss for each business unit for 2025 as compared to 2024 were as follows:

• CNBU operating income (loss) improved primarily due to higher bit shipments, increases in average selling prices, and cost reductions, partially offset by higher R&D expenses.

• MBU operating income (loss) improved primarily due to increases in average selling prices, higher bit shipments, and cost reductions.

• EBU operating income decreased primarily due to declines in average selling prices, partially offset by higher bit shipments and cost reductions.

• SBU operating income (loss) improved primarily due to increases in average selling prices, higher bit shipments, and cost reductions, partially offset by higher R&D expenses.

• 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.

Changes in operating income or loss for each business unit for 2024 as compared to 2023 were as follows:

• CNBU operating income (loss) deteriorated primarily due to declines in average selling prices and lower bit shipments.

• MBU operating income (loss) deteriorated primarily due to declines in average selling prices and lower NAND bit shipments.

• EBU operating income decreased primarily due to declines in average selling prices and lower bit shipments.

• SBU operating income (loss) deteriorated primarily due to declines in average selling prices.

• CMBU operating income (loss) improved primarily due to higher bit shipments, increases in average selling prices, and manufacturing cost reductions.

• CDBU operating income (loss) improved primarily due to higher NAND and DRAM bit shipments, increases in average selling prices, and manufacturing cost reductions, partially offset by higher R&D expenses.

• MCBU operating income (loss) improved primarily due to increases in average selling prices, higher bit shipments, and manufacturing cost reductions.

• AEBU operating income decreased primarily due to declines in average selling prices, partially offset by manufacturing cost reductions and higher bit shipments.

Operating Expenses and Other

Research and Development:

R&D expenses vary primarily with the number of development and pre-qualification wafers processed, the cost of advanced equipment dedicated to new product and process development, and personnel costs.

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 and reliability.

R&D expenses can vary significantly depending on the timing of product qualification.

R&D expenses for 2024 increased 10% as compared to 2023 primarily due to an increase in employee compensation and higher volumes of development and prequalification wafers, partially offset by an increase in government incentives.

R&D expenses for 2023 were relatively unchanged as compared to 2022 as decreases in employee compensation were offset by higher depreciation expense.

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 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.

R&D expenses for 2024 increased 10% as compared to 2023 primarily due to an increase in employee compensation and higher volumes of development and pre-qualification wafers, partially offset by an increase in government incentives.

Selling, General, and Administrative:

SG&A expenses for 2025 increased 7% as compared to 2024 primarily due to an increase in employee compensation and professional services.

SG&A expenses for 2024 increased 23% as compared to 2023 primarily due to an increase in employee compensation.

SG&A expenses for 2023 were 14% lower as compared to 2022 primarily due to decreases in employee compensation, legal fees, advertising, and professional services.

Interest Income (Expense), Net:

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.

Interest income (expense) deteriorated for 2024 as compared to 2023 primarily due to increases in interest expense as a result of higher interest rates on our debt, partially offset by increases in interest income due to higher interest rates on our cash and investments.

Interest income (expense) improved for 2023 as compared to 2022 primarily as a result of increases in interest income due to higher interest rates on our cash and investments, partially offset by increases in interest expense due to higher debt balances and interest rates on our debt.

Income Taxes:

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Effective tax rate 11.6 % 36.4 % (3.1) %

The change in our effective tax rate for 2024 as compared to 2023 was primarily due to changes in profitability.

The change in our effective tax rate for 2023 as compared to 2022 was primarily due to a pre-tax loss in 2023.

The change in our effective tax rate for 2025 as compared to 2024, and for 2024 as compared to 2023, were primarily due to changes in profitability.

Despite a consolidated pre-tax loss on a worldwide basis in 2023, we had taxes payable in certain geographies due to minimum taxable income reportable in those geographies.

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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.

As a result of the low level of profitability and jurisdictional mix of income, the benefit from tax incentive arrangements was not material for 2024 or 2023.

The effect of tax incentive arrangements reduced our tax provision by $1.05 billion (benefiting our diluted earnings per share by $0.93) for 2025.

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 Model Rules (“Pillar Two”), undertaken by the Organisation for Economic Co-operation and Development (“OECD”).

Nearly all European Union member states have enacted the Pillar Two legislation, which will be effective for us in 2025.

While we do not expect these enacted laws to materially impact our effective tax rate for 2025, additional countries where we operate, including Singapore, have announced plans to adopt Pillar Two legislation.

Enactment of this legislation would become effective for us in 2026 and significantly increase our tax expense.

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 or 2023.

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.

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 Model Rules (“Pillar Two”), undertaken by the Organisation for Economic Co-operation and Development.

On November 27, 2024, Singapore enacted legislation to implement Pillar Two, which will apply to us starting in 2026.

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.

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Other Operating (Income) Expense, Net

• Income Taxes

Other Non-Operating Income (Expense), Net

55 | 2025 10-K

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As of August 28, 2025, $3.50 billion was available to draw under our Revolving Credit Facility.

Funding of certain significant capital projects is also dependent on the receipt of government incentives, which are subject to conditions and may not be obtained.

Funding of certain significant capital projects is also dependent on 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 in 2025 for property, plant, and equipment, net of proceeds from government incentives, to be around mid-30% range of revenue for the year.

We estimate capital expenditures for property, plant, and equipment, net of proceeds from government incentives, to be approximately $4.5 billion in first quarter of 2026.

While quarterly expenditures may fluctuate, this level serves as a reasonable quarterly baseline for the planned capital expenditures for 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 August 29, 2024, we had purchase obligations of approximately $1.17 billion for the acquisition of property, plant, and equipment, of which approximately $1.10 billion is expected to be paid within one year.

As of August 28, 2025, we had purchase obligations of approximately $1.77 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 leases, debt, and commitments, see Item 8.

Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Leases,” “ – Debt,” and “ – Commitments.”

To support projected memory demand in the second half of the decade, we will need to add new DRAM wafer capacity.

Following the enactment of the U.S.

CHIPS and Science Act of 2022 (“CHIPS Act”), we announced plans to invest in two leading-edge memory manufacturing fab facilities in the United States, based on CHIPS Act support through grants and investment tax credits.

Financial Statements and Supplementary Data, Notes to Consolidated Financial Statements, Note 9.

Leases, as well as Note 12.

Debt and Note 13.

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.

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 meaningful DRAM output projected in 2027.

In addition, in October 2022, we announced plans to build a second leading-edge DRAM manufacturing facility, consisting of up to four fabs to be built over the next 20-plus years, in Clay, New York.

We expect construction site preparation to begin in calendar 2025, with production anticipated to ramp in the latter half of the decade.

We expect these new fabs to be key to meeting our requirements for additional wafer capacity starting in the second half of the decade and beyond, in line with industry demand trends and to maintain an objective of stable bit share.

We have signed a non-binding preliminary memorandum of terms with the U.S.

Department of Commerce for up to $6.1 billion in direct funding under the CHIPS Act for our planned fab in Boise, Idaho and the first two planned fabs in Clay, New York.

We are also eligible for federal loans up to $7.5 billion.

In addition, we receive a 25% investment tax credit on qualified investments in U.S.

Construction of the fab began in October 2023, with first DRAM wafer output projected in the second half of 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.

Our announced 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.

We continue to work with state and federal authorities for approval to start ground preparation, and anticipate production to ramp after the completion of the second Idaho fab.

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 from the $6.1 billion grants previously awarded to the second planned Idaho fab.

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 U.S.

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 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.

Additionally, we began enablement of cleanroom space within our existing manufacturing fab in Hiroshima, Japan, that will support production of DRAM using EUV lithography.

We also continue to advance our global back-end assembly and test network in order to support our product portfolio and extend our ability to deliver on global customer demand in the future.

We have started construction to expand our existing assembly and test facility in Xi’an, China, to provide space to add more product capability, to allow us over time to serve more of the demand from our customers in China.

Construction is also progressing for the assembly and test facility in Gujarat, India to address demand in the latter half of this decade.

Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Government Incentives.”

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 U.S., 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:

our construction is progressing for the assembly and test facility in Gujarat to address demand in the latter half of this decade;

we are modernizing our Hiroshima manufacturing facility to support the production of DRAM using EUV lithography;

we broke ground on an HBM advanced packaging facility to meaningfully expand our total advanced packaging capacity beginning in calendar 2027;

we are modernizing our production capacity for DRAM and HBM products to meet rising market demand.

Financial Statements and Supplementary Data, Notes to Consolidated Financial Statements, Note 20.

Government 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.

The repurchase authorization has no expiration date, does not obligate us to acquire any common stock, and is subject to market conditions and our ongoing determination of the best use of available cash.

Through August 29, 2024, we had repurchased an aggregate of $7.19 billion of the authorized amount.

Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Equity.”

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.

Through August 28, 2025, we had repurchased an aggregate of $7.19 billion under the authorization.

Financial Statements and Supplementary Data, Notes to Consolidated Financial Statements, Note 15.

Equity, as well as Note 20.

Government Incentives.

On September 23, 2025, our Board of Directors declared a quarterly dividend of $0.115 per share, payable in cash on October 21, 2025, to shareholders of record as of the close of business on October 3, 2025.

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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, expected funding from government incentives, and available financing will be sufficient to meet our requirements at least through the next 12 months and thereafter for the foreseeable future.

We expect that our cash and investments, cash flows from operations, funding from government incentives, and available financing will be sufficient to meet our requirements at least through the next 12 months and thereafter for the foreseeable future.

For the year ended 2025 2024 2023

Net cash provided by operating activities $ 17,525 $ 8,507 $ 1,559

Net cash provided by (used for) investing activities (8,309) (6,191) (11,585)

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

2 unchanged sentences

Operating Activities:

Cash provided by operating activities reflects net income (loss) adjusted for certain non-cash items, including depreciation expense, amortization of intangible assets, inventory write-downs, asset impairments, and stock-based compensation, and the effects of changes in operating assets and liabilities .

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 .

57 | 2025 10-K

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.

The increase in cash provided by operating activities for 2024 as compared to 2023 was primarily due to net income in 2024 adjusted for non-cash items, the effect of an increase in accounts payable and accrued expenses, and an increase in other current liabilities largely due to customer prepayments to secur e p roduct supply, partially offset by an increase in receivables.

The decrease in cash provided by operating activities for 2023 as compared to 2022 was primarily due to a net loss in 2023 adjusted for non-cash items and the effect of an increase in inventories and a decline in accounts payable and accrued expenses, partially offset by a decrease in receivables.

Investing Activities:

For 2024, net cash used for investing activi ties 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 contributions of $315 million received from government incentives to offset capital expenditures.

For 2023, net cash used for investing activities consisted primarily of $7.68 billion of expenditures for property, plant, and equipment;

partially offset by contributions of $710 million received from government incentives to offset capital expenditures;

and $868 million of net inflows from maturities, sales, and purchases of available-for-sale securities.

53 | 2024 10-K

For 2022, net cash used for investing activities consisted primarily of $12.07 billion of expenditures for property, plant, and equipment;

partially offset by contributions of $115 million received from government incentives to offset capital expenditures;

$888 million of net inflows from the sale of the Lehi, Utah fab;

and $155 million of net outflows from purchases, maturities, and sales of available-for-sale securities.

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 activi ties 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 offse t by $315 million of proceeds from government incentives to offset capital expenditures.

For 2023, net cash used for investing activities consisted primarily of $7.68 billion of expenditures for property, plant, and equipment, partially offset by $710 million of proceeds from government incentives to offset capital expenditures, and $868 million of net inflows from maturities, sales, and purchases of available-for-sale securities.

Financing Activities:

$513 million for paym ents of dividends to shareholders;

$300 million for the acquisition of 3.2 million shares of our common stock under our share repurchase authorization;

an d $149 million of payments on equipment purchase contracts, partially offset by approximately $1.00 billion of proceeds from the issuance of the 2031 Notes.

For 2023, net cash provided by financing activities consisted primarily of $3.20 billion of proceeds from our 2025, 2026, and 2027 Term Loan A borrowings;

$1.27 billion from the issuance of the 2029 B Notes;

$896 million from the issuance of the 2033 B Notes;

$749 million from the issuance of the 2033 A Notes;

and $599 million from the issuance of the 2028 Notes.

Cash used for financing activities included $761 million for repayments of debt;

$504 million for payments of dividends to shareholders;

$425 million for the acquisition of 8.6 million shares of our common stock under our share repurchase authorization;

and $138 million of payments on equipment purchase contracts.

For 2022, net cash used for financing activities included $2.43 billion for the acquisition of 35.4 million shares of our common stock under our share repurchase authorization;

$2.03 billion of repayments of debt primarily to redeem the 2023 Notes and 2024 Notes;

$461 million of cash payments of dividends to shareholders;

and $141 million of payments on equipment purchase contracts.

Cash used for financing activities was partially offset by aggregate proceeds of $2.00 billion from the issuance of the unsecured 2032 Green Bonds, 2041 Notes, and 2051 Notes.

Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Debt.”

For 2025, net cash used for financing activities consisted primarily of $4.62 billion of repayments of debt, which included the prepayment of the 2026 Notes, 2026 Term Loan A, 2027 Notes, 2027 Term Loan A, and a portion of the 2029 Term Loan A borrowings;

and $522 million for payments of dividends to shareholders;

partially offset by approximately $4.43 billion of proceeds from the issuance of the 2029 Term Loan A, 2032 Notes, 2035 A Notes, and 2035 B Notes.

Financial Statements and Supplementary Data, Notes to Consolidated Financial Statements, Note 12.

For 2024, net cash used for financing activi ties consisted primarily of $1.90 billion of repayments of debt, which included the prepayment of the 2024 Term Loan A and the 2025 Term Loan A borrowings, $513 million for paym ents of dividends to shareholders, $300 million for the acquisition of 3.2 million shares of our common stock under our share repurchase authorization, an d $149 million of payments on equipment purchase contracts, partially offset by approximately $1.00 billion of proceeds from the issuance of the 2031 Notes.

For 2023, net cash provided by financing activities consisted primarily of $3.20 billion of proceeds from our 2025, 2026, and 2027 Term Loan A borrowings, $1.27 billion from the issuance of the 2029 B Notes, $896 million from the issuance of the 2033 B Notes, $749 million from the issuance of the 2033 A Notes, and $599 million from the issuance of the 2028 Notes.

Cash used for financing activities included $761 million for repayments of debt, $504 million for payments of dividends to shareholders, $425 million for the acquisition of 8.6 million shares of our common stock under our share repurchase authorization, and $138 million of payments on equipment purchase contracts.

Critical Accounting Estimates

7 unchanged sentences

We are subject to the possibility of losses from various contingencies.

Significant judgment is necessary to estimate the probability and amount of a loss, if any, from such contingencies.

An accrual is made when it is probable that a liability has been incurred or an asset has been impaired, and the amount of loss can be reasonably estimated.

In accounting for the resolution of contingencies, significant judgment may be necessary to estimate amounts pertaining to periods prior to the resolution that are charged to operations in the period of resolution and amounts related to future periods.

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 previous, current, or future periods impacting the recognition timing to results of operations.

We test goodwill for impairment in our fourth quarter each year, or more frequently if indicators of an impairment exist, to determine whether it is more likely than not that the fair value of the reporting unit with goodwill is less than its carrying value.

4 unchanged sentences

If the carrying value of the reporting unit exceeds its fair value, we recognize an impairment loss up to the difference between the carrying value and implied fair value.

We recognized a charge of $101 million in 2023 to impair all of the goodwill assigned to our SBU reporting unit based on our quantitative assessment for impairment.

We performed a qualitative assessment for the current year and have not identified any impairment indicators for our reporting units.

We recognized a charge of $101 million in 2023 to impair all of the goodwill assigned to our former Storage Business Unit reporting unit based on our quantitative assessment for impairment.

As a result of reorganizing our segments in the fourth quarter of 2025, we performed a quantitative goodwill impairment assessment for each of our reporting units immediately before and after our business unit reorganization.

We concluded based on both our pre- and post-reorganization impairment tests that goodwill was not impaired.

Determining when to test for impairment, the reporting units, the assets and liabilities of the reporting unit, and the fair value of the reporting unit requires significant judgment and involves the use of significant estimates and assumptions.

5 unchanged sentences

Actual future results may differ from those estimates.

We assess the reasonableness of our methodology, forecasts, and assumptions by comparing the aggregate calculated fair value for our reporting units to our market capitalization.

We assess the reasonableness of our methodology, forecasts, and assumptions by comparing the aggregate calculated fair value of our reporting units to our market capitalization.

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.

59 | 2025 10-K

Income taxes:

3 unchanged sentences

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 the assessment of our performance and other relevant factors.

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 Japan, the United States, Malaysia, Taiwan, and other jurisdictions.

Our income tax provision or benefit is dependent, in part, on our ability to forecast future taxable income in Japan, Malaysia, the United States, 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.

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.

2 unchanged sentences

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 with historical results and consider known changes in our cost structure as applicable.

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.

3 unchanged sentences

For example, a 5% decrease in future average selling prices would have changed the estimated net realizable value of our finished goods and work in process inventories by approximately $750 million as of August 28, 2025.

55 | 2024 10-K

GAAP provides for products to be grouped into categories in order to compare costs to net realizable values.

13 unchanged sentences

Differences between the estimated and actual amounts are recognized as adjustments to revenue.

Recently Adopted Accounting Standards

Financial Statements and Supplementary Data, Notes to Consolidated Financial Statements, Note 2.

Recently Adopted Accounting Standards.

Recently Issued Accounting Standards

Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Recently Issued Accounting Standards.”

Financial Statements and Supplementary Data, Notes to Consolidated Financial Statements, Note 3.

Recently Issued Accounting Standards.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis