Crucial 2014 Annual Report Download - page 36

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34
SBU sales for 2013 were relatively unchanged from 2012 as increases in gigabits sold were partially offset by declines in
average selling prices. Increases in gigabits sold for 2013 were primarily due to improvements in product and process
technologies. SBU sales of NAND Flash products to trade customers for 2013 increased 22% as compared to 2012 primarily
due to increases in gigabits sold partially offset by declines in average selling prices. On April 6, 2012, we acquired Intel's
interests and supply rights from IM Flash wafer fabrication facilities in Singapore and Virginia, resulting in subsequent
increases in our sales to trade customers. SBU operating income for 2013 declined from 2012 primarily due to decreases in
average selling prices and increases in R&D costs mitigated by manufacturing cost reductions. Manufacturing cost reductions
resulted primarily from improvements in product and process technologies.
EBU
For the year ended 2014 2013 2012
Net sales $ 1,774 $ 1,275 $ 1,097
Operating income 331 227 129
In 2014, EBU sales were comprised of DRAM, NAND Flash and NOR Flash in decreasing order of revenue. EBU sales
for 2014 increased 39% as compared to 2013 primarily due to increased sales volumes of DRAM and NAND Flash products
partially offset by declines in average selling prices. EBU operating income for 2014 improved as compared to 2013 primarily
due to higher margins on sales of DRAM and NAND Flash products as a result of the increase in sales and cost reductions.
In 2013, EBU sales were comprised of DRAM, NOR Flash and NAND Flash in decreasing order of revenue. EBU sales
increased 16% for 2013 as compared to 2012 primarily due to increased sales volumes of DRAM, NAND Flash and NOR
Flash products as EBU continued to expand its customer base, partially offset by declines in average selling prices. EBU
operating income for 2013 improved from 2012 primarily due to manufacturing cost reductions and higher sales volumes
partially offset by declines in average selling prices.
Operating Results by Product
Net Sales by Product
For the year ended 2014 2013 2012
DRAM $11,164 68% $ 4,361 48% $ 3,178 39%
NAND Flash 4,468 27% 3,589 40% 3,627 44%
NOR Flash 505 3% 792 9% 977 12%
Other 221 2% 331 3% 452 5%
$16,358 100% $ 9,073 100% $ 8,234 100%
In order to balance our future product mix in anticipation of the closing of the MMJ Acquisition, in the fourth quarter of
2013, we began to transition production at one of our wafer fabrication facilities in Singapore from DRAM to NAND Flash.
This transition to NAND Flash production is substantially complete. During this period of transition, there was a marginal
reduction in wafer production.
DRAM
For the year ended 2014 2013
(percentage change from prior period)
Net sales 156 % 37 %
Average selling prices per gigabit 6 % (11)%
Gigabits sold 142 % 55 %
Cost per gigabit (20)% (25)%