Micron Technology Inc.'s Proposed Senior Unsecured Notes Rated 'BB+' (Recovery Rating: '3')


NEW YORK (S&P Global Ratings) Feb. 4, 2019--S&P Global Ratings today assigned 
its 'BB+' issue-level rating and '3' recovery rating to Boise, Idaho-based 
semiconductor manufacturer Micron Technology Inc.'s proposed senior unsecured 
notes. The '3' recovery rating indicates our expectation for meaningful 
recovery (50%-70%; rounded estimate: 65%) in the event of a payment default.

The company intends to use a portion of the proceeds to retire its 3% 
convertible senior notes due 2043 and the remainder for general corporate 
purposes. All of our other ratings on Micron remain unchanged.

Our ratings on Micron reflect the firm's growing scale and healthy product mix 
in the cyclical and capital-intensive memory semiconductor industry. We view 
the company's sizable cash and marketable securities of about $7 billion as of 
Nov. 30, 2018, and full revolver availability of $2.5 billion as liquidity 
support for the business because the current downturn in the memory industry 
could substantially reduce its cash flows while it is undertaking heavy 
capital spending for ongoing technology development that is mandatory to 
remain competitive.

The positive outlook reflects our expectation that Micron will maintain cost 
competitiveness and good execution on subsequent process node transitions and 
a sizable liquidity position, despite a material reduction on capex to respond 
to tough memory market conditions. We also expect the company to generate free 
cash flow of at least $3 billion to $4 billion on a rolling 12 months basis 
while undergoing the industry cycle. 

We could raise the rating to investment grade if Micron can maintain EBITDA 
margins of at least 50%, total liquidity (cash and marketable securities plus 
revolver availability) of at least 30% of sales, and a net cash position over 
the coming year.
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