Micron Technology, a memory-chip manufacturer (NASDAQ:MU), just announced a quarterly dividend strategy. Although the payouts are small at first, I believe that the company will gradually increase its dividend yield. Let's find out what Micron's payouts mean for us shareholders.What's new?Micron declared Monday night a quarterly dividend at $0.10 per share. Micron will pay the first dividend to shareholders who have been registered as of Oct. 18.If the three next payouts are at the same level, it would give a 0.5% annualized return at current share prices. Micron will spend about $115 million on dividend checks during the third quarter. This is $460 million more than the first year.This policy will be funded directly by the company's free cash flows which amounted to $1.5 billion during the third quarter. Micron also increased its capital expenses budget due to strong third quarter results. Micron's cash management strategy is about to enter a new era.Since memory chip prices increased in 2018, Micron's credit ratings are in investment-grade territory. Credit rating agencies praised management's ambitious capital allocation plan. Micron's financial situation will be strained by the dividend policy, however strong market trends should ensure that the payout budget is within the company's cash flow coverage.What is the big idea?Micron has become a cash machine thanks to solid unit pricing and growing demand of memory chips. The company is reorganizing its cash management policies.When Micron's stock trades at bargain bin valuations, which it did often between 2014 and 2019, buybacks can make sense. The fact that the market has finally figured out that the sector of memory chips is not at the edge of another major oversupply, means that the price-to earnings ratio has stabilised at a reasonable double-digit level. In these conditions, dividends may be a better way to return excess cash to shareholders.What's next?David Zinsner, Micron's CFO, stated that while the payouts will increase over time and that Micron will continue to pay out dividends to shareholders, Micron's first and most important tool for cash returns will be an opportunistic purchaseback strategy.You might be wondering what is wrong with Micron’s growth plans when you suddenly see dividend checks. It is right that a healthy tech company should be capable of reinvesting its cash flow into growth-boosting innovation rather than giving cash checks to investors. It turns out that you can have both.Apple (NASDAQ:AAPL), a tech giant, raised eyebrows in 2012 when it established a dividend policy. This was less than five years after the era of iPhone-based growth. The effective dividend yield of Cupertino was 0.4% at the time, which is below Micron's initial yield. Did this mean Apple's growth ambitions were over? You can decide for yourself:Micron is not the next Apple. Micron can both send out dividend checks and also explore healthy business growth even in the highly competitive semiconductor sector. This unexpected announcement seems to be another useful tool in Micron’s financial toolbox. Long-term investors will appreciate the benefits of serious dividend policies.
