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MU · Forward model · Automotive and Embedded · Contracted case

What has to happen in Automotive and Embedded

Model as of

This page changes Automotive and Embedded inside the complete MU model. Every other vertical, corporate programme and valuation assumption stays in the selected portfolio case.

MU forward model
Horizon
Consolidated fair value $1,521.07 all other verticals held in this portfolio case
Final-quarter revenue $11.76B 14% of company revenue
Explicit segment contribution $70.39B EBITDA less segment capex, before corporate items

Micron's own framing, taken at face value: take-or-pay agreements with floor prices make the trough shallower than any prior cycle, and Micron says margins at floor pricing beat the peak of every past cycle. What it still does not reach on a 3.5x multiple is today's share price — getting there needs the multiple to re-rate to 6x as well, which is the real content of the argument the market is having about Micron.

Automotive and Embedded

Basis quarter$4.63B
Final quarter$11.76B
Implied CAGR+20%
Final revenue mix14%

Memory designed into cars, industrial equipment and robots. Small, slow and by far the most stable line Micron has — design wins last for years and prices move on contracts rather than on spot.

Last four quarters
2025 Q4 $1.43B Reported
2026 Q1 $1.72B Reported
2026 Q2 $2.71B Reported
2026 Q3 $4.63B Reported
Automotive DRAM and UFS NANDIndustrial and embedded memoryRobotaxi and ADAS platformsLong-lifecycle industrial supply
Sequential growth +8.0%/qtr decaying toward +1.5% 8% a quarter to start, carrying the same contract resets the other lines get, from a much smaller base.
Automotive and Embedded

Latest: $11.76B (2031Q3E)

Period Value
2025Q3 $1.13B
2025Q4 $1.43B
2026Q1 $1.72B
2026Q2 $2.71B
2026Q3 $4.63B
2026Q4E $5.05B
2027Q1E $5.45B
2027Q2E $5.83B
2027Q3E $6.19B
2027Q4E $6.53B
2028Q1E $6.87B
2028Q2E $7.20B
2028Q3E $7.52B
2028Q4E $7.84B
2029Q1E $8.17B
2029Q2E $8.49B
2029Q3E $8.82B
2029Q4E $9.16B
2030Q1E $9.50B
2030Q2E $9.85B
2030Q3E $10.21B
2030Q4E $10.58B
2031Q1E $10.96B
2031Q2E $11.36B
2031Q3E $11.76B

Assumptions & reasoning

  • The one line carried on a plain growth rate, and the only one where that is the honest choice: automotive memory is sold on multi-year design wins at contracted prices, so there is no meaningful bit-versus-price tension to model.
  • It has still quadrupled in four quarters, which means it is not as insulated from the spot market as the design-win story suggests. Terminal growth of 1% a quarter says the model does not believe that rate survives.
  • At 11% of revenue this line cannot decide the valuation. It is carried in full because it is a disclosed business unit, and because it is the only part of Micron that would still be growing in a downcycle.
  • Margins here glide down least — 79% to 45% — because contract pricing falls slower than spot in both directions. That is also why this unit's margin was the lowest of the four on the way up.
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