KLAC - Earnings call transcript Q2 2018

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Operator

Good afternoon. My name is Magen and I will be your conference operator today. At this time, I would like to welcome everyone to the KLA-Tencor's Second Quarter Fiscal Year 2018 Conference Call. [Operator Instructions] Thank you. Ed Lockwood with KLA-Tencor Investor Relations, you may begin your conference.

Ed Lockwood

Magen. you, Thank and everyone, our call. conference Good welcome afternoon, to

to today Wallace, and period our Joining here Higgins, me results and ended Rick afternoon call our today We're We Officer. Officer on December President XX, for released are Chief at Chief X:XX Financial quarterly Time. XXXX. discuss results our these the Bren this Executive Pacific

non-GAAP following and SEC including A be release, of today's filings, calendar can find If found also can the be future find website. demand year-ended conferences as you'll links earnings website. seen accessible There, could A financial our for results non-GAAP In will call the XX-K on of factors our impact you on unless completion presented well events, and Investor simulcast find June haven't our be the this detailed otherwise Investor that you report a website. on of relations of to results. will the on Relations XX, KLA-Tencor's our specified. risk in those presentations its filings, on of it reconciliation basis, a financial section results discussion Today's GAAP release XXXX. as in our KLA-Tencor's press annual investor on you'll Form of descriptions investor future presentation to

those are to Any including those statements statements, subject forward-looking we forward-looking come and know, you risks. guarantee true. the are future our call on to As will KLA-Tencor those today, subject results make cannot risks,

turn from to the statements. may our that, Our I'll forward-looking Rick. significantly differ in over projected results actual those call With

Rick Wallace

KLA-Tencor including for patterned will markets The for inspection, levels begin same by strong acceptance in partially consecutive in with products, both the revenue grew wafer calendar following we three challenges. of devices. expansion their performing of across platform, plasma in number layers seeing implemented flagship Gen defect our of for is our yield major solving critical being customers and most is an inspection for pattern inspection core in year experiencing and second the memory broadband to are XXXX, which optical by advanced inspection grew segments and un-patterned The results per free XX% off customer as the XXXX. in also quarter, systems. Gen all new logic results these for orders is KLA-Tencor quarter demonstrate execution dedication XXXX cash company's metrics dynamics I'd year Good joining December our runs earnings like the gross Ed. these share the momentum afternoon highs thank of objectives. reported to you, generated are as throughout some everyone record in as the another each I us Full and to of that our generation. delivering our today. today. as to value outstanding well well of the take organization calendar opportunity results revenues, customers experiencing highlight underlying quarterly period. this successful strategic long-term non-GAAP we records in These you for record X, expectations optical in X are stockholders Leading to and driven growth and performance for set with the our the serving and margin, Thank our Total in record inspection shipments, ramp delivering in of we flow deployed highlights, production, our XXXX. to marketplace and the XX% are increasing

meet the Gen and inspection production current to and performance X inspection broadband continue to quality cost most the scanning plasma Puma addition, effective platform requirements. yield platforms the In provide wafer laser

process manufacturers more meet have specifications process been new technologies. products tool wafer number customers Additionally, experiencing support while flatness are in control our today. wafer demand, or un-patterned also to wafer advanced new adding and for and capability inspection a of to record demand metrology IC bare bear products layers cleanliness strong are adding greater stringent Wafer wafer

industry. Next, playing wafer to in with and every applications. by and EUV requalification, and The believe that process positioned mask unique qualification present the control. issues suite bringing product EUV These most defectivity along applications technology inspection to in resist enabling EUV with manufacturing collaborating of is critical to customer current control comprehensive technology market the yield associated EUV market, in technology lithography uniquely development with mainly opportunities an role patterning inherent mask with for the and KLA-Tencor lie learning technologies is to address scanner we and accelerate sourced the KLA-Tencor

China, the to and growth an of come. for Chinese is And of inflection as leader to out in to years for KLA. growth technology a equipment the meaningful semiconductor catalyst in growth demand generating is wafer investment advanced the in a driving global currently build EUV finally expected We industry major revenue early already promises process factor positive from the market the be And new industry underlying for are control and market. this China future adoption fab for market be

innovation the from calendar As customer nearly in results market Chinese demonstrate in leadership. KLA-Tencor's share leader native of strong, China both is customers into XXXX. XXXX In technology and conclusion, in December XXXX expected quarter tripled KLA-Tencor's and the continue momentum process this in an position strong to and company's terms control, and is adoption. Orders

of of position we on strength, growth expected from stockholder embark a year another operating strong are and We returns. as

WFE XXXX, we today, the outperform our high in strong and growth. revenue to momentum expected record levels digits be in are single to the the positioned for year ahead backlog and to marketplace experiencing overall given industry is the growth is Looking

in Bren? comments. XXXX over expect the will process to turn always, year momentum now The in our on our what growth and our on of focus the XXXX. to leadership, be record we for another the strong continued of market by control performance delivered stage performance operations and be calendar Higgins customers' nature critical exciting deliver I Bren call his and As to set execution. and fueled build success KLA-Tencor's is will relative

Bren Higgins

Rick everyone. good Thanks, afternoon, and

remarks, XXXX. gross non-GAAP came his in was records outstanding in each in guidance another new performance margin opening and diluted the in the and of highlighted above KLA-Tencor the been and the non-GAAP for new tax operational related US largely quarter quarter transition revenues, you release, year. December non-GAAP XXX Revenue our loss cumulative to share in $X.XX delivered and asset in for the financial and law. quarter in execution earnings tax liabilities revaluation GAAP Shipments, period in and and the earnings Rick end the per resulting historical December In or rate quarter upper As XX% charge will million. Non-GAAP on calendar both the quarter. share range of find of was at earnings and the the calendar achieved diluted per diluted tax at of earnings share per taken per for reconciliation was $X.XX the of December, $X.XX would a have outside from to the diluted share. GAAP tax press a guided

be explicitly results, the exclude results, adjustments the commentary refer the of will GAAP to on focused exception which non-GAAP press With I in my release. when the covered

for tool in were pull shipments. of and in the above to shipments sequentially highlights product terms the across deliveries of Total to the turning customer quarter, guided demand for up finishing the upside December, X% portfolio range billion the December X.XXX quarter. environment as drove quarter Now,

million shipments be X.XXX to March quarter in Looking XXX forward, range of we to the billion. modeling are

calendar low the half growth the compared of shipment Our the of expectation with have the XXXX be roughly is for for half to have first levels calendar single in mid of second second planned to digit flat half 'XX and to year. to

with XXXX. For Memory XX% quarter of total. the quarter with split December of to Demand and to to X% of was full continue shipments and shipments March. in December, shipments shipments year, system be shipments single XX% NAND. and was digits Memory expected March. mix and for XX% quarter dominate about forecasted of expected will expected the forecasted in is shipments to with to in forecast line the as grow quarter. was between Foundry shipment XX% March are in in approximately in is of in the the our the roughly the be Logic evenly DRAM compared was currently XX% be memory Foundry high

was product reticle non-semi the patterning was Service further inspection of details for approximately includes inspection. and was XX%. now X%. I'll Patterning of the by income orders of In wafer shipments terms XX% approximate shipments; was of to distribution group, statement. XX% turn

I revenue mentioned my was As highlights, in XXX in million December.

be the expect the range revenue in billion of We March X.XX to million quarter. in to XXX

the result a we currently to the mix. Non-GAAP year. was are half In in to of company revenue of modeled margin a than to half XX% year the versus stronger half the modeling of the above low largely for terms gross grow for of new XX%, as half calendar in first the mid-single the record second of digits expectations guided XXXX, range a product and to XX.X%,

of be the provided key based XXXX execution our in business margin acceptance margin in range mix October, gross XX.X% calendar year. for earnings system year XX.X% on expectations revenue and the We growth, to for we expect of In in quarter. last and of the products, customer March the gross XX% call XX% the to to expectations cost of management

advanced quarter expected Looking the expenses up range programs development technology in higher expenses Non-GAAP ahead, of the for due we to lithography. were at XXXX. operating related end million towards compared our bias XXX Total as QX guided was likely gross operating to non-GAAP XX.X%. believe will to flat with this in margins EUV September QX, margin compared

We million levels XXX March currently quarter. are approximately be expense in to sizing operating the

$XXX business the throughout high calendar revenue is outlook growth published the based digit for and model. with that, consistent year expectations Beyond operating our range our expenses be for year million our single to in XXXX quarterly for on

margin at gross - we the above profile higher Given margins future. should the or the foreseeable the referenced, operating end to upper this strong model for deliver or I continue

XXX estimated approximately US. to ending of rate the for and is to law effective late January the non-GAAP from million fiscal associated in tax the vast required 'XX, of majority in our for of the XX%, reduction the the in Congress rate charge transition outside the effective tax tax quarter, historical President US related with XX% by earned results tax X. the the tax the charge December. in earnings estimate the is accumulative passed due company by rate year signed new of resulting GAAP the from true-up Our to was in federal an June Included XX.X% The

incurred lower available. tax related and deferred the and the becomes to interpretation addition, next quarters additional revaluing be adjusted charge tax over few assets as based a guidance This In our regulatory on US rate. will tax we also financial information charge

based on IP the manufacturing for stockholders, US of the beneficial as approximately opportunities the to indicate additional the will business, irrespective analysis initial points expected preliminary by KLA-Tencor, impact on the In worldwide and compelling ongoing access liability geographical to free in stockholders generated, ownership US to decrease mix to the new pursue terms tax will October, of planning our of productively lower. tax be expected will and cash we and any XXX growth cash XX% to in liability. the the invest changes new flexibility us Furthermore, all company the repatriate and territorial of expect last allow our law access XXXX cash future overall flow Based tax system strategic business foreign law to the provided tax enable rate on meaningfully without annual the allow return be to basis tax tax company of or modeling, additional location. in earnings to our

the As purposes modeling going result, new a recommended for rate tax forward, XX%. is

with compared bonds from reduction free repayment billion, in quarter maturity Finally, primarily the now XXX million flow the turn of outstanding. XXX bank XXX to Cash was December shares net was the quarter the and we flow quarter million ended due diluted balance and to million and quarter, for and operations a XXX was of XXX and decrease with public XX in September investments approximately in at our cash the fully X.XX quarter the million. the XXX cash net statement. loans. from of Cash highlights and million I'll ended million million income sheet a

of For is when cash unallocated free deployed. returning stockholders, record the we is believe track it full that flow valued year our in cash X.XX cash flow billion. was free Consistent productively to XXXX, only with proactive

additional Going to forward, of company's this company optimize fundamental afford flexibility the new will the to the environment aspect continue strategy. tax

billion these revenue of setting, stronger for single the relative the The $XX approximately industry say on stock we to grow than vested program. paid in to XXXX. market the of December equivalents of position million with expected with weeks. mid-single high leadership We the repurchase target results model. year, will in the coming business repurchased share more strong 'XX. in our remaining levels grow conclusion, in company December, market versus Against leading quarterly common calendar have of year company reflect operating repurchase ending our and This has pursuant wafer dividends the stock In our revenue million in equipment topic the forecasts X.X modeling our we XX.X growth digits the to aggregate our company in to X.X restricted an and and backlog this share industry regular market the digits under are in approximately WFE broader are for million for high performance KLA-Tencor's the range of In and shares this total at model. authorization. market fab units dividend fully end coupled Current

per back over that, the billion; So for diluted between million March the concludes remarks in our million XXX of will $X.XX X.XX $X.XX EPS I Ed diluted range our shipments to $X.XX reiterate Q&A. and GAAP share. now and on with the XXX This quarter to non-GAAP to EPS to revenue to the turn of to begin per guidance $X.XX is, with call quarter. share the of X.XXX billion

Ed Lockwood

Thank Bren. brief per you always, that yourself you. follow-up firm and is many as we questions can so we possible. as ask to that limit question accommodate one And a

for ready we're Magen, first question. Okay. the

Operator

Credit question Farhan comes Suisse. Ahmad [Operator with from first Our Instructions]

Farhan Ahmad

shareholders. just about about taking My more question. Thanks thinking for a is said think that first about Can question back are overall always you prior on you've if about giving think if reform, you strategy the commentary, capital the you deployment. And it's talk my how for to [indiscernible]. would tax I your

that, would So if be you on can comment that helpful. just really

Bren Higgins

Bren. M&A record think given going our returns the or either question. flexibility adds investing we It's Thanks exciting track the opportunity for opportunities or to look can what to It's business in we forward. the in an for at Sure, cash Farhan. historical time an certainly the how that business, how think deploying about we and shareholders, it's I company additional around certainly do

said say we philosophically, our the I prepared more no would As on the the although, don't topic in expect we have any different. weeks. update have coming in is to do remarks, say I today, to position

great a pretty capital not a and cash strong intensive business, the It's have free business margin model. so We flow is strong.

think, And course process that amount so, to if we have the ability this to significant fair been return, not a year. where our doing any over to do of We've takes We're de-levering. I of at that the point is shareholders, us. cash compelled the

in the We place the the leverage for have company. right

have and And calls. the to alternatives going we I so forward, look think make at those

going growth XX% the and ratio cycle feelings that's we're the to target to Our rate We're somewhere with company the the dividend earnings consistent haven't payout of in going XX%. in grow through changed. over to flow. certainly And, or cash the time, a

that more far cash the strategy sheet, few reserves well think I in as we'll say coming about balance on as is to of weeks. next that the the the And have So understood. part

Farhan Ahmad

a a And threat then, versus There second business. can That to is high the holistic just, ASML talk a lithography. you my technology? just to that ramping the can Can inspection in a optical to about you as how talk competitor that regards concern you the market question, be is their e-beam in about see do your at optical. level,

Rick Wallace

of really we've in advanced as you leading X DRAM, both in good in we've memory, deploying really also seen, been edge that. our has and Farhan, board customers NAND, the the logic across tool Gen terms with but but advanced of in for also Sure. know the We've adoption been seen

see said the development in the - Gen capabilities and of prepared product we As remarks, lot has that X to continue we leveraging legs. being of a

for roadmap there's and recently you that quite was As introduced know, a that.

So, a been want There e-beam, and be the X to continue capable, delivered they relative optical, the only for customers to coverage is place to have able definitely leverage performance e-beam. price there's optical Gen a to record really we suspect by want just year years for basis, But e-beam place expect a continue. a continue on in XXXX. that in inspection in wafer to many and we will that and XXXX we relative for had

Operator

from of comes question line the next Your JPMorgan. Sur Harlan with

Harlan Sur

to it generation of of or before memory guys the and We're hearing for just are addition print some looking in your be next given is this just manufacturing early logic actually X also these X and use with associated across that to production, check for Gen even that technologies some also with is this seeing that using may year Gen some for for Is technologies. learning of customers? and foundry yield of high this something you EUR, volume based your EUV defect actually your some challenges customers customers

Rick Wallace

Harlan, great question.

introduce new in, and the to the to typical, is and tend a the on production. first of As tool, understand particular in leverage user ability some their when to value deploy early users depending we

We are capabilities more some provides on typically are from layers the layers. where they before. production a it There in pronounced benefit seeing had critical it

also We see prior line, detect where end recent were as they have missed e-beam. able they could experience only of to inline defects not customer now they're before detectable optical had that tools by and by

logic some we've those structures, really of memory So It is a with being memory more the seen. and perhaps applications are little line. that in tools deployed both surprising in

to and we're by those that signs we So encouraged fully expect continue.

Bren Higgins

customer the a the we look bigger that base so. last only line. Gen add product year-to-year to performance a is contribution reception strong been or part that XXXX, from months from And of company's by driven X Gen is, is at I'll The over perspective Bren. XX value thing X, with XX to as it's the really Harlan, has the

seeing also adoption there. competes saw so So, place course where But the what in print product some layers, we're confident growth e-beam you has it year. that's reasons we discovery we then excited checks. for where as still opportunities in a over mentioned there's to higher Rick of segments, it earlier. these and Certainly, made and high a pretty value and the inroads production all level the of difficult we're this lot the really with across the really against of the end opportunities get early Defect forward move about significant demonstrated of where there talked is there

Harlan Sur

EUV high EUV here, platform. the traction generation then And then on conjunction for guys inspection, X the Teron been more for lead mask alpha importantly, inspection, as What's in customers your platform update feedback ramp to check, starts inspection just question. with your volume what's And like early first with next you EUV here? multi-beam of kind can the from mask us an mask give on been print

Rick Wallace

Sure. for isn't it's development. Teron really mask check, The for used print used the

demand seeing that's, players, that simply activity EUV terms of So in a - mask and we're great across production. because increased of of for the number

right the, for So that's [indiscernible]. terms the workhorse in for of, really the now industry

and of is, well some have a interest work Gen multi-beam. with platform to lot think, likely going suited through, and they print scenarios. that inspection to Right road. really ways inspection it's the the needed said will We that in as terms X think in there preparing are I volume, will still discussing for we support in e-bean The a a of most we're check that be we first of people volume when front. customers, when there'll engagements contemplate said, market we've couple intercept started had I be that check, of the out, interest got the that's heavy lot print it's of customer they high and I there's a level and do think as I volume. the down now, tool, a multi-beam we as But on

Operator

comes with question from Your of ISI. C.J. next Muse Evercore the line

C.J. Muse

the your I and it the you're drivers at uplift Lam's, it WFE lighter guide DRAM of and was I them. first little compare to bit principal question, for least one I sounds guess about coming when a in like think of

logic off we DRAM as calendar upside contemplating the your here from are of thoughts question of model you which love being that I structures would So guess adopted, some is, are that move as your more a you within to on to related think 'XX, particularly hear XX-nanometer, that in about front.

Rick Wallace

about, a don't of the talking beginning we're far few in I think that we're where the Yes. is, off Lam C.J., at percentage year points.

about there's margin a probably this place. on that in for So the error puts same all this

talk think foundry our around bit strength, segments we the the down We fundamentally, at think see it'll I be more business. looks in strength DRAM flash little way about I year. NAND a from memory, was, around understand And, like with what logic strength some. least they

add intensity seeing type from in digit up single all up, of DRAM terms a rates. by We're So it growth X% perspective. mid we're in process what encouraged you in end this control adoption X%,

logic process in in more dynamics intensity for the are good have You happening devices, that well. have you that the also as control China are adoption

least stories So line we in about - least really we've at to strong little and the better. as is the I that good this strong a now, given right is the wanted, the bit a in improvements memory with have think way position perhaps at have the intensity and year market company in around perform company to of the seen one a

all we're problems, unique us. encouraged seeing in I we're So front and that really solve technology by across the for are opportunities given to think what us of there's segments transitions

C.J. Muse

as correct follow I'm there, second up, be in making my that greater me would which I percentage think as wrong guess you if upside think guess I'm foundry I shipment I would rise will about to gross half assumption, and logic deliver And margin. the

through you margins year gross guys. to uplift an the contemplating be we should So for

Bren Higgins

second the the the think pretty it's mean, mix does I logic strong foundry of half. the to way course half up you're segment is it terms but to half in pick through memory modeling still the I year, of in right. So

December foundry. order strong in is that pretty in one profile quarter I wildcards into and the time think, year around the of is frame the the

those way actually opportunity does Right orders haven't not. to there's So materialize, end the in that when the create four these QX. those that or a do in, slotted pull ship orders at we that of the depending year tools on with we now,

bias So different the not - we remarks, margin The the our to the very across higher way issues of gross company quarters most will end smaller the so remarks. the gross consistent the of quarters the range And of driven I in I'm I any the XX% value by expect mix consistent to segments the prepared movement is share and the over margins, mix but product operating of gross within margin customers, understood, ROI and the be range changes different. in XX% mentioned be year, bit, with to the value largely prepared that I course pricing with mentioned. around there, is that a some products here profile sometimes delivers is around the little modeling and but

Operator

Company. comes Needham & question with Edwin line the of next Mok Your from

Edwin Mok

question fall a on China. Just

Do we seeing do any a that in pickup it's terms chip possible we now talking of 'XX. of spending? increased just really I'm some like the base is kind have more that curious this I where on your stand an that? year will be think makers spending peers very investor memory or cadence be the of of strong for think KLA. and I from update Are domestic you that historically

Bren Higgins

Yes.

mentioned with 'XX. and the Rick new a calendar saw calendar bookings versus given times, So Those locations. in of orders new China region, fabs, China, also nature lead segment longer a it's a in good comments, for 'XX we not of his just been tend native business tripling to as us. but of fabs come new as

and the infrastructure to part requirements always are equation other something that up there's So of and get running.

at see any don't in 'XX, momentum. change we As I calendar look

I was think seems memory perspective, the contribution in roughly it 'XX foundry calendar foundry 'XX. little bit, bit the is from in order little more a where Again, an this heavy. But the shifts the a range. same calendar same mix in more XX-XX

as next up to of I of speed going next round seeing these good. to in and over progress, So timing by we're the come coming and happen what's investment we're of what start pretty or But there to front very the they projects influence think years. that phases encouraged looks us the make that's

Edwin Mok

be does mix factor you're level, a shift kind correct? kind to you Just comp there. digit Is sounds a of in in like not single basically and not that of it similar low clear, China really so but growth growth expect

Bren Higgins

we'll My what, ship commentary 'XX focused than on 'XX. we more in the know in You shipped was mix. order

So in there's of numbers native contribution in and calendar more there yeah, revenue, terms shipment China the than from 'XX calendar 'XX. in was China

Edwin Mok

my you market, inspection right is changed but there then the pattern wafer they that give it's is strong the question follow-up bigger now, on cycle. market And tend structurally that go really Is confident historically that more, be for business to anything demand sustainable?

Bren Higgins

A have. couple of things

there's based by to a driven new strong I the when a reinvestment the but things, of is but and one - and on a course - think, new be couple specs drives it there can is are other relative particularly one and rules. very of couple design is when of true of be volume first of all that cycle, to those businesses that there technology happen to,

The wafer did the NAND. an XD well additional very part is market growing, we're being ago driven the inside flatness bare years seeing flatness lot requirements, market wafer acquisition we driven by by other in doing a thing and to is measure that's

driving new addition new purchases seeing of to specs, volume traditional and so tool sensitivity. drivers And in we're the

Operator

next Nomura Your with of comes Shah line the Instinet. question Romit from

Romit Shah

say a and for inflects growing XX Nvidia's that they of performance billion high has the just Rick. rate. seems got had is as hardware at powers you, tremendous that It fairly one a just computing AI silicon demand also GPU question like the size I server/ VXXX north for transistors. of that functionality

byproduct that demand the GPEs, are like talk equipment for that. could that seem great. is that and hoping process this of I CPEs top high and implication performance these would was be but is yields And so control got the very here you've from tier it And not the about you benefit trend should stronger

Rick Wallace

Sure. Yes, absolutely.

performance a mask high of One, plays drivers push main for the are just also drives us. category drives we of drives really which it and the the designs, which computing additional on our as for a seeing places is One couple and in mask, business. and general AI it

are seeing fab, advanced we die a the also and defectivity everything with of metrology associated because So larger benefit. chips in requirements complexity, And drives very then complexity requirements the it. the those including about additional

us for one. So it just it foundries multiple is a well, positive to not be is going in inflection a and as overall

So there in are that. other players

to drive that to be the for forward. we expect we go that continues something So as control need process

Romit Shah

this your say trend, margins over fair gross blended then Is to ASPs for is time. as it and your good it that consequently accelerates

Rick Wallace

the Bren certainly the we're of margin tends percentage gets mentioned, customer to we customer tools. toward tooling as as gross are mix process more but go complex, as mix, the more on use really dependent advanced case the Well, not of

in we business benefit advanced kind, level based devices of sure, on forward. terms of would So see pushing any a overall demand our profitability and

us. driver yes, it's for So a absolutely

Operator

[Operator next question Nicolaus. line of Instructions] Stifel Your comes the Ho from Patrick with

Patrick Ho

of percentage seeing intensity, to marketplace, but going at one a the helped think time? layer you've we How the know, reached you new X-D at NAND about X-D the terms process Rick, maybe control in the help do or increases lot look we're and go early the control has said and I two go leveling we the how capital gain manufacturing at transition. XXX, ramp of just XX past process challenges increase or we more are to in devices in have as to you've in with I it the intensity layers? that you we're talked of intensity continue as kind points a this to capital of memory in XX-layer there intensity.

Rick Wallace

in drive and answer there is that when having defectivity even intensity more significantly all than make would can the to more out they're problems two bring existing and we market. we actually don't adoption higher, I NAND ways targeting NAND One on pipeline new the and XX, XD is have be if do, address And is increased can the cases. in impact deployment technologies, we there's Great we going to if for more think And and that. us XD new address continued in tools those those support in new online right but question and solve to something these those of come are now. that's to XX the There then do we're of which tools, and drive opportunity. on to can we get in tools advanced an next metrology based starting the use are for and

So drive that up. yeah, intensity will

Patrick Ho

been able and for turn And supply the a tools seeing as Bren of pretty demand rest industry, trends question at around even the today chain, you're equipment and in rapid rate, obviously Great. to to managing demand record rise. a you've yourself of terms continue

to You're and also and you've couple the ability your demand well. over AR of for guess strict quarters, managing as timelines in your of last this especially done given to really What continue customers, I tool inventories you to tight have deliveries. the and seen their rise deliver kind

Bren Higgins

in done to this the is teams the Yeah. lot we've operational do products of a Well, time whether pretty the effectively long and more a the to and our parts of of materials we're flexibility across it that more buying think little mean, us gives to lifting we're buying time execute be lead deliver. A all one time materials, lead lot environment. I supplier shortens to lead hasn't bit heavy I things hedging that by assembled easy. of able - our or long been

be to we've things be to So able stronger to we're further out got the their that doing. one make certainly obviously, is supplier capacity I of support in cases sure we're ramping us. able mean to commitments making the some

things to deliver our of with of So deliver our able to to processes suppliers better guys own needs. out spending lot to sending time sometimes, to yields on We're parts to improve some there be our their so able work that. be a tactical meet to and

of on So everybody small a lot there. a we're lot putting the of chain. else, Like pressure things

to are of in unique our Some suppliers supply and only us this space.

doing across we're it us. leverage okay it's pleased really the some and the I'm challenge, so with but and that So helps for cases, operational in a execution world in the the factories with far but

Operator

comes question with from Citigroup. final Malik Your Atif

Atif Malik

intensity, XX% capital your longer Rick, down low earnings with - on flattish a Within obviously a coming can declining then to see XX% EUV from talk them. I have intensity term to foundry about call opportunity. capital talked TSMC that that for CapEx, question its on And is within for growing do have CapEx, you you talk you but a I just opportunity PDC I assume for about you? how opportunity PDC guys? about just opportunity the follow-up.

Rick Wallace

Sure.

intensity XX% customer, upside XX%. the are on the in the that see order We capital think but of and somewhere EUV. in the XD it's we to where as foundry we depending cycle terms are I get as especially of capability in we provide are earlier to discussed and that, to problems if can foundry in unsolved There ranges we NAND. that more

the toward to that'll course that to and minimize their going of to and control. their investment try try range. are So And process in end we capital investment of think optimize high customers head in

share constantly in that for the way then in we the value terms showing created that we're and So we value of we market. them have deploy

modeling range. be we're that XX% it forward, to as to XX% think I in So it continues

Atif Malik

expecting foundry your this And there a prior flattish change then has or that. last you Bren, logic are be year, like to comments Great. plus year over been to opportunity

Bren Higgins

a statement, As look breadth I the and of at I as probably more shipment of are at foundry it foundry a investing bit. shipments think and I across down little look the customers

as we're little So and well. around I said strong strong up, NAND be logic think would bit, a expectations foundry, obviously as our I earlier, foundry down - DRAM

to get you how provided that's we for WC. guidance So the

Operator

presenters I'll closing further are no remarks. questions time. back for this There call turn the at to

Ed Lockwood

you, your day. Magen. Thank rest enjoy Thank the all Okay. for of you today us joining and

Operator

call. This today's conference concludes

disconnect. now may You

KLA (KLAC) 25 Jan 182018 Q2 Earnings call transcript