Micron Technology, Inc. (NASDAQ:MU) Q2 2020 Earnings Conference Call - Final Transcript
Mar 25, 2020 • 04:30 pm ET
Thank you. [Operator Instructions] Our first question comes from the line of Joe Moore of Morgan Stanley. Your line is open.
Great, thank you, David, in the prepared remarks, you talked about inventory accumulation potentially masking weakness of customers. Where specifically might you have that anxiety. It seems like you think conditions are pretty strong and your customers don't seem to have a lot of recent [Phonetic] product inventory. So when -- is that just a precautionary mark on your side or is there something you're seeing that creates anxiety?
[Speech Overlap] I'm sorry, I was just going to say, let me address that first and then I will definitely have Dave expand on that. So it is an environment where there can be supply shortages and of course underlying demand trends in the markets we are participating continue to be strong. There can be supply shortages given the fluid situation related to the spread of coronavirus in various countries. The rate and pace is different and ultimately it will depend upon the rules and regulations that different governments may impose that can potentially impact supply in the industry. So just like we are accumulating some inventory ourselves to make sure that we don't have supply disruption, it is legitimate to think that our customers can also be building some inventory to make sure that their supply chain is under control. So I think this is the part that we are just mindful off, although when you look at work from home economy and study from home economy for students, that is certainly driving greater demand in the enterprise PC side and certainly placing -- addressed quite a bit of constraints and stress on the infrastructure. So the cloud infrastructure, the enterprise infrastructure definitely is driving increased demand as well. So in that backdrop, I think we are just being mindful in terms of making those comments, but I will let Dave further elaborate on it.
Yeah, I think what you covered, Sanjay, is good. The only thing I'd add is, I think we believe the strength in the data center market is real and that the inventory levels are normal in that market.
Great, thank you.
Thank you. Our next question comes from Timothy Arcuri of UBS. Your line is open.
Thanks a lot. I guess Sanjay, there was some language in the release that -- and you guys have talked about the fact that you're lagging indicator relative to demand, can you just help parse through that. I guess it sounds like maybe you're suggesting that the fiscal fourth quarter could be maybe down sequentially, which is typically up, I know that it's very difficult to tell what's going on right now, but maybe can you just help us walk through what the puts and takes look like into Q4. I know you don't want to guide Q4 but it sounds like it's possibly down. So can you just help us think about that. Thanks.
So certainly, as you