MUMicron Technology

In 2025, 2026, over half of our total revenue came from our top ten customers. Among our end markets, approximately one-half 60% of our total revenue was concentrated in the data center end market. A disruption in our relationship with any of our top customers or a significant decrease in demand for our data center products, including due to disruptions or delays in the build-out of data centers by our customers and partners, or in the overall data center end market, could adversely affect our business. We could experience fluctuations in our customer base Particularly with respect to data center build outs, supply constraints or the mix of availability issues with respect to any one component have had and may continue to have a broader revenue by customer or end market, as markets and strategies evolve. Demand for our products may fluctuate due to factors beyond our control. Our inability to qualify our products to meet customer or end market requirements could adversely impact our revenue. A meaningful change in inventory strategy by our top customers or in certain end markets could impact our industry bit demand growth outlook. In addition, any consolidation of our customers or consolidation of significant end markets could limit the opportunity for sale of our products. The loss of, or restrictions on impact. For example, our ability to sell to, one or more certain products has been and could be impeded if components necessary for the finished products are not available from third parties. In addition, the build-out of data centers by our major customers or in certain end markets, and partners requires significant energy capacity, water, and capital, and any shortage of these and other necessary resources, any stakeholder opposition to data center development, or any significant reduction delays in orders the build-out of data centers, could impact our future revenue and financial performance. In addition, access to capital for our customers could be constrained, which may cause companies to face difficulties securing financing for large-scale infrastructure projects. These limitations could delay customer and partner deployments or a shift in product mix, could have a material adverse effect on our business, results reduce the scale of operations, or financial condition. See Part II, Item 8. Financial Statements and Supplementary Data, Notes to Consolidated Financial Statements, Note 28. Certain Concentrations.

AI-driven memory and storage demand is accelerating and growth is outpacing industry supply. In 2025, 2026, we benefited continued to benefit from substantial improvements in DRAM pricing, volumes pricing and margins as compared to 2024, margins, reflecting strong demand growth, driven in large part by the continued advancement of AI. During 2025, we shifted a portion of our DRAM supply to The AI-driven growth in the data center has accelerated demand for memory and hyperscale cloud markets storage at a rate greater than our ability and the industry’s ability 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, increase supply. This has led to decisions on supply allocation that may impact certain customers and end markets. Robust overall DRAM and NAND demand and constrained supply has led to increased pricing and improved the 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.

Revenue is primarily recognized at a point in time when control of the promised goods is transferred to our customers in at an amount that reflects the consideration we expect to be entitled to in exchange for those goods. Contracts with certain of our customers are generally short-term in duration at fixed, negotiated prices duration. We also have strategic customer agreements structured as take-or-pay agreements, with payment binding commitments for specific contractually enforceable volumes over the multi-year contract terms. 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. For all of our contracts, payments are generally due shortly after delivery. We estimate a liability for returns using the expected value method based on historical returns. In addition, we generally offer price protection to our distributors, which is a form of variable consideration that decreases the transaction price. We use the expected value method, based on historical price adjustments and current pricing trends, to estimate the amount of revenue recognized from sales to distributors. Differences between the estimated and actual amounts are recognized as adjustments to revenue.

On November 9, 2023, Yangtze Memory Technologies Company, Ltd. (“YMTC”) May 19, 2025, Netlist filed a patent infringement complaint against Micron Micron, MSP, and MTEC in E.D. Tex. alleging that one of its subsidiaries in U.S. patent is infringed by our HBM products. On March 6, 2026, the E.D. Tex. transferred the case to the U.S. District Court for the Northern District of California (“N.D. Cal.”). The Delaware (“D. Del.”) pursuant to a motion by Micron to dismiss or transfer for improper venue. On July 28, 2025, Netlist filed an additional complaint alleges against Micron, MSP, and MTEC in E.D. Tex. alleging that eight one U.S. patents are patent is infringed by certain of our 3D NAND products. The DIMMs.