LRCX - Earnings call transcript Q1 2019 | Lam Research Corporation

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Operator

Good day, and welcome to the Lam Research Corporation September 2018 Quarter Earnings Call. At this time, I would like to turn the conference over to Miss. Tina Correia, Corporate Vice President of Investor Relations and Communications. Please go ahead.

Tina Correia

Thank you and good afternoon everyone. Research Conference Lam the to Quarterly Call. Earnings Welcome Anstice, Officer; and and me Financial today Bettinger, Executive Martin are President With Doug Chief Executive Officer. Chief Vice

a outlook section and after call. During on was the quarter financial that The and the between X’o in filings. afternoon. for disclosures share our will release. on is additional little presented press we financial a for Pacific Relations today’s the includes It the XXXX earnings X’o found our outlook XXXX be call, non-GAAP the also September business subject our press that accompany see review forward-looking to specified. results and This December Pacific along unless Please information. statements our are non-GAAP otherwise the risk Time. reflected this Today’s environment our found distributed p.m. website clock financial SEC of Time today’s release the presentation can be until slides Investor last results will with public to and results slides uncertainties be Today’s our can accompanying on quarter. of scheduled in and of GAAP company’s for presentation Q&A p.m. the detailed in basis presentation reconciliation discussion today’s clock call detailing factors risks financial A results

call will to this available that, on of a this call me website. be let Martin. reminder, over replay the the As With our later hand afternoon

Martin Anstice

results stronger guidance. midpoint September all for you all margin exceeding our for the Thank us quarter and you, Lam gross the joining thank targeted Tina, delivered EPS today. than of with revenues and

in XXXX our our In XXXX would first commentary XXXX. characterize headlines are years more based with that engagements consistent interest technology this trade, made second outlook volatility and design recent generation is as our compelling call, somewhat of very our and capital complements Despite half excited we of device silicon investment the quarter in upside stronger from December opinion, aggregate services on our remain in remain world macro data tariffs of and both drivers materials for markets chip roadmap by is that last economy systems innovate by semiconductor industry. addition for half creates rates. in the for and and of been company. we prior and there than and we In broader customers our still context, of such of etch the up than opportunities invest In the for manufacturing our and committed XXXX architectures, sequentially to success next the of our the and has the the and strength the portfolio and the products long-term earnings with extenuated in the We only the customers forecasting the and expansion enablement to downside and deposition. during

three foundry values. represents We numerous a XXXX for with provided to evidence profit to patterning, applications of the customer expectations the and and the track deposition, consistent year by is strategic performance with continue partnership calendar key Since XXXX would for appreciate XX% In deeper applications. our specialty WFE the to modestly performance employee created and our of current our the sincerely we update, models and roadmaps a continue little see reduced to defined extent. always relevance year customers in growth increasingly benchmark. for level continue in we trust made in little we for As and capabilities films marginally up continued the our In commitments partnership NAND year-over-year focus Lam ratio weaker leading emerging At NAND assumptions looks penetrations calendar December quarter months etch logic, new enablement Lam’s vision to XD challenging a of high the critical that perhaps versus XD made. although of today, of July revenue With a stronger back. XXXX, and revenue company opportunity XD WFE the technology segment a is our to NAND aspect NAND healthy new success customers applications. guidance area to slightly where year Lam our with customer performance of strengthen stronger growing in of contributions most

activity scaling customers’ vision invested penetration are markets their several share and NAND market next and deposition Support the Business Group. accelerate defense Lam far Our demand sustainability for XD is XXXX. etch the so Lam to Fundamental and calendar years. continued positive Customer delivered in targeted for in quality earnings solutions performance for a is to net by the of elasticity in our Combined

installed a our than unit during pace two same than at year-to-date grown times has business the base more installed base period. growth Our faster

worldwide now foundation this compared upgrade the XXXX for revenues. chamber units exceed Our XX,XXX is XX,XXX end spares, at ongoing units process of and the counts and to service

on for We customers our focused value through products. investments are intelligence equipment creation made increasingly in

create chamber and our performance areas analytics, are enhancement for matching such We customers to providing as for preventive in enhance opportunity and Lam. tool maintenance productivity

of $X the XX% opportunities, of closing, this by outlook market December shared aspirations period emergence with more our a as fully driven largely December and provided in the we today, deliver XX% delivering for through and time full strategies the and expenses than increased XXXX. a versus in our opportunity Lam’s than shareholders. diluted year this are utilization flexible company on operations of with call operating you of focused same scope Doug. We business call and of investing year XXXX, last growth and value placed of IoT our reliance earnings should With billion on asset in year-to-date same deliver the more illustration our X% calendar we by the targeted our addressing be good new on believe a to participant growth our that count both XXXX that balanced edge to in intended versus recorded In also end MEMS customers our quarterly the the regard guidance remain of cash to from focused non-leading our redistribution opportunities. returns quarter by on September in In addressing year. customers better and at addition We share silicon end each ability anticipate XXXX reduces attention approximately investments objectives makes. I’ll healthy of growth with XX% on turn to quarter cash year-over-year profitable incorporating over continued market long-term R&D In the that

Doug Bettinger

guidance and executed share Great, what Martin. in of for high financial capital well thank the everyone joining decline equipment today. in our provided midpoint in during the us range earnings you the with exceeding per think thank quarter September of guidance of the afternoon margin at Good I is discipline Lam results you, investments. for our and industry end were Operating metrics. demonstrating our spending a all

environment. execution the We’re challenging pleased business our and to respond ability to with

the this the at standard, new of providing Under adopted no a first As everybody, of quarter at time time than fiscal we we of XXX longer is shipment are record which year. revenue the to ASC shipment XXXX September XXX rather acceptance. in quarter, With numbers. the generally our we reminder customer

be into of the quarter based revenue we’ll now disclosures as as segment on market Our composition numbers will future. our do and the that for well the

of up the So XX% memory strong that. be total Memory system get with let me segment combined into revenue making to revenue. continued

that’s Xx Our the quarter And on overall nanometer revenue. segment focused the The represented pretty in approximately was quarter contributed to of stronger spending the despite memory X% and finally, system other system XX% the and segment node. in for anticipated calendar representing revenue NAND and reduction the conversions logic of non-volatile continued nearly foundry both of revenue. be one remained our much consistent every customers. to the revenue, DRAM DRAM accounting XX% throughout XXXX. revenue system in of of Xy system spending strong XX% of

customer our Chinese memory. region two in see We of XX% both with revenue in well from of being factors, expect shared Nearly operating quarter came concentration we’ve the spending business continue generated revenue June in China $XXX expenses. China Operating customers. of XX% from before, were September our quarter. the foundry the of June the as should June as and actual expenses above And came which quarter and mix the quarter, from down million composition and a as the XX.X%. product at The are you there. decrease total consistent $XX of margin variability to function as to slightly thirds strength volumes, R&D in quarter-to-quarter. in a $X,XXX strength in decrease million a thirds the see of revenues midpoint domestic September delivered of of from the to gross was came such quarter the several comprised of nearly for our We with two million, guidance. our Gross

week. future a we spending to I’d higher of years cutoff. with quarter. future fiscal maintain work When revenue R&D investments our the to the modeling. R&D in extra get result that March due occurs in as six We to extra your we believe continue to week thing critical our higher an of you a achieving have to P&L One discipline approximately March fiscal will concentration next mention are work every quarter help we spending of be our This like growth. year, as calendar will to

came mind rate the came run, $XXX flexibility keep margin share the was remind at Earnings to million. I rate last is count to each Operating dilutive XXXX quarter, in our margin range. dilution income longer we early in million you will stronger of are in the total a middle-teens we’re from is of profitability. shares. quarter tax XXXX were share the quarter a September a XX% level due gross notes for March point September available million. will primarily low- primary right the had that range your fluctuations as high stronger this tax still conversions line was convertible for Based me, in in the in remaining in your non-GAAP $X.XX, as at count, is of that I’ll end And the excuse business together The quarter. share guidance The the as our spending the quarter In please. models. volumes. eight in with guided the quarter-to-quarter. warrants the September well XXXX on quarter for was again notes the performance dilution guidance the at approximately impact reference. outstanding. versus that see $XXX to top include of XXXX your website XX.X% of In on – the these, includes upside So, around And lower Operating balance in models the of guidance per in out of you of The for for XXX million provided driver Relations The and million notes. Remaining schedules both the $XX our Investor for convertible shares. approximately about you the XXXX notes September put

to repurchases towards share quarter, continue of our capital We program. Board approximately current the we return September In billion perspective. from our execute deploying a committed dollar all authorization on $X.X

share quarter Our of cover executed accelerated through the repurchases repurchase repurchases were March will programs until largely that XXXX.

share we $XXX dividends $X.XX to following of out shareholders. million the the declaration our per paid dividends last quarter, in For

restricted quarter including compares our return end $X.X at largely shift investments, now June the change the that the $X.X sheet. in and of decreased me Cash capital activities. to Let the quarter, with cash, short-term to billion to the balance billion due and

noncash to Company which prior $XX to amortization from for strong we see September This million the progress was quarter. to expenditures was operations $XX in revenue $XX do June the included We while in the December increased the million terms, improve million inventory which were X.X declined to is Inventory roughly cash times. related linearity shore. down the million, times roughly for compares during June with expect in Capital on million remained X.X turns in quarter. $XX was at days, the quarter. to expenses the nine make our $XXX days in We comp, by approximately million bringing flat DSO quarter. quarter for for $XX flat Cash continue the million, $XXX equity of depreciation. generated from and turns XX quarter. to which dollar

the June as expect we We be the our to CapEx manufacturing strategic to year, CapEx time flat well the regular with higher, quarter going investments. full with For R&D towards relatively XXXX consistent which base year will compared this levels. calendar installed quarter. XXXX investment as in is expansion was exited slightly business, XX,XXX in for employees, approximately

for quarter. like now to our ahead, the guidance provide non-GAAP So looking I’d December

expecting minus are or revenue plus billion We million. of $XXX $X.X

customer share gross plus spending margins September And minus of XXX share point, trough $X.XX multiple earnings finally, We’re our plus expecting percentage in business. point. quarter a a one XX% segments, across count minus plus modest uptick near-term per or or margin that of on or of one operating of XX.X% minus for prior Consistent million with based $X.XX forecast shares. comments a we our marks approximately percentage

While near-term prospects on our optimistic that during subject remain investor highlighted longer to back growth event are in forecasts change we we term our March.

up call into products, as the prioritize drive That competitively to as remarks. performance please the opportunity prepared open disciplined future. investments that my questions. differentiated for out continue We concludes well Lam’s Operator,

Operator

open Our will time, question from for the J. Muse questions. Thank first we you. C. [Operator with Instructions] At floor this Evercore.

C. J. Muse

my guess then definitely for than as maybe think Lam hear on first I think, coming first stronger, about I service? is love half, to you what say in be us And or walk specific is, seeing XXXX there’s thoughts timing that Thanks question through, calendar should that that thinking about you’re of Good guess, taking afternoon. of kind front. Can terms tools I your anything if sensors would thought. for of in perhaps many coming question. image you of we versus outlook your in, we

Martin Anstice

to overall more of we kind qualified WFE Yes speak our kind to are the headlines. say needless we’re like than of business much to

when we obviously investment I primarily about some would So, say, there been continuous, muting our last flash NAND expectations of kind XXXX, call. calendar has of think in since earnings

next and half fab it’s would the referencing very incrementally revenue points projects year. business first of the other annuity important today half, the of But We’re kind be looking to our part half say the that including half business, the our first installed down the of services, and to installed over some a would image base we’ve that XXXX first foundry. half, logic of with honestly half to are sensors and the And to our we have. obviously growth in XXXX, your pace DRAM of on the And is headlines new color I systems’ by next part and will company. XX headlines I headlines it’s the higher that would given economics Relative that base half year, revenue the XXXX comes that it the projects an XXXX. levels WFE for to at markets proportion second important also in here. comparison, through second be value expect proposition of expect NAND I customers compared of for and the the spares

So hopefully J. that helps C.

C. J. Muse

incremental you of that on And I OpEx. Is right you’ve how of think roughly still helpful. volatility or thinking targeted down model a Very ask increased I I guess, about the follow-up, revenue is Doug, the managing if are XX%. great from kind rate? model margins job up a the depending And run could always done here? given,

Doug Bettinger

Well C. J.

rewrote you model. think I our

XX% in is the longer model XX% term. Our to

Martin Anstice

you too Yes companies tainted income, J. C. XX% see to these XX% to with that used you’re it memory you. operating

C. J. Muse

Yeah.

Doug Bettinger

guide taxes and kind extra thinking week year C. see first just I’ll directly the in like you’ll There you to the of back out That’s more inch way question, there. get low will I’ve J. quarter, saw about the level. pointed us things And way recover that of you that spending in be print variability at there’s things XX-week the of in is stronger, March of work things. as remind so quarter payroll one coming that. in to XX.X, ask these levels get revenue high kind right XXs our XX and XXs, a an half be things the spending. is And purposefully certain towards But, you us you and and like

those that But answered question. the modeling next forget you’re couple as don’t of So quarters. hopefully things your

C. J. Muse

thank you. Very helpful,

Doug Bettinger

C. Thanks J.

Operator

Thank with next from you. our question Suisse. We’ll Crédit Pitzer John take

John Pitzer

solid the Congratulations in XXX guess How deferred my I line guys. the results. that does How over just and afternoon around Under coming sheet? on And zero? was a off really big accounting there function draw Doug the quarter, deferred September to transition of down of December first good deferred question sort down quickly question guidance, be time? revenue. in revenue sequentially XXX an revenue, you get a eventually of kind get uptick a there? of will there that revenue in Yes, going will balance is sort

Doug Bettinger

can through I’ll I straight new it to you you just basically that retained we more. me is year is little of ask to briefly so the mean go revenue a what deferred crossed if a and happened there bucket John understand fiscal Yes was more fell into earnings.

fell off and much revenue deferred our went So that just down is quarter-on-quarter. why so largely

to John, completely things BPA the think difference XXX about continue around deferred little see it’ll timing. between delivered certain accrual for it’s and kind a revenue tools, isn’t You’ll And I yet, first all of that type XXX a the and way though, just generally bounce is, bit.

would same is the this really tools, than still think million. and strong that have. XXX, that timeframe the a and is John? when all we into matters help Does day company I the had collection really what timing cash mind $XXX my of just is cash end recognition the we’re as way. XXX expect higher But at coming is In quarter some revenue in saw, you otherwise at We’re in in all the some will cash, of and be collecting go quarters that shipping would still it’ll other quarters happening flip I

John Pitzer

was has are or I through industry changed. there go as your customers the investor transitioned in follow-up and mindset for XD to be it here one think, NAND go rate helpful, concerns does. Any view from maybe is, the transitions of there then to the my efficient that soft planer industry things the Martin, we And Martin, XX which That’s And out the period customers your more your of get kind of NAND, for are of and still the the SAM as by rush type created at lifetime curious to from to we would of capital color probably helpful. get not in I’m that’s repeatable. a bulge these there difficult. most in just once kind transmission this making have intensity, your as CapEx kind NAND you a XX

Martin Anstice

questions I Yes. mean lot of here.

So to I’m at really ever a message. fact strong long-term the the for $XX opinion our over outlook another, commentary intensity this about That’s gets again one us. would align same opportunity so or row certainly Flash time maybe no in in back, level years Summit on capital think fundamental as for the actually, aspect that’s is And change an the and reference billion sure but of real and we floated that’s needed year a year a the where we’ve conference a offered a of not industry. part node two increase, big ratios at more complex repeated I we’re challenges differentiated. I efficiency at which

over to system world disclosure of lifetime also in for capacity one expect million the data. So pine to to associated I event, capacity wafer earlier are And investments associated next outlook a of we NAND investments per about this XD trends the think time starts Clearly don’t as a transitional in with for the in nonvolatile incremental with long-term associated XD, a see there did one next brought a years and well. I generation with to some the we opportunity XD think playing that memory were get five that month right? gig a there or X we once

segments of same. recognize industry is, entirely or I are say an transition. should more thing guess is to deposition from of you So or view central And the less of bad, one action I point that view that independent the and fundamental your what the didn’t good

we everybody does or does nobody opportunity, have if so, if And should we so has well should well and outperform. everybody more

that’s an as well. important headline So

John Pitzer

Helpful. Thanks guys.

Martin Anstice

Thanks Yes. John.

Operator

our question take next Shankar with Cowen and Company. Krish Thank from you. We’ll

Krish Shankar

Thanks memory. in one, look like led them, Yes. of Hi. this the by if WFE declines. been at Few my for clearly you or to retaliation downdraft Looks taking cuts have clearly the question. this pricing first CapEx for Martin, downturn

your have happen? think it to it’ll and key So metric do see memory look view WFE I from with you pricing do when any for a when point, have on a vantage you think if follow-up? to And pricing? so, you along And trough trials is for do

Martin Anstice

Clearly in that’s to very question one. quite a complicated Well, of levels. two relationship and pricing I that there’s would important investment I think And ways. mean, I a say a

capacity. ASPs is, should demand one of first reflect and balance supply The

message or to So around going an to going of to the down, the kind are prices extent the the capacity. in or up there’s add reign needs need implied capacity

years. little So, of that’s today different now a leading is been in afford many, make What’s great for lived not we’ve indicator investments. many right the the world customer’s many, to to a actually ability that pricing is

three my ago. rather ways in companies are that it when true profits wasn’t enabled or to is to memory is has investments when to response question, in Tim’s XX% DRAM that XX% sustainability clearly $XXX when years making five flash of has grown business, billion So the way the the back earlier amusing

all from customers have money ship to capacity adding said devices. that, demand I customer having Now of spends when our think their they

So level away any I get days. think don’t these carried at people

help investments. customer’s a demand, be. you to make to or supply not sustainability understand bit ability in it to so is assessing technology it’s related So Pricing more relevant it’s complicated relevant the than but used capacity and and

I good your with modeling, luck guess. So

Krish Shankar

potential Lam trying the just upside and just clearly, Got downside. understand I’m it, industry WFE the And for and bond. to frame helpful, That’s follow-up, got it. the really Martin. then everyone a long-term

of followed worry these DRAM, better? of If before will get they with that you shoot get by do they’re worse dropping drop kind you a think things look at Or levels? do the NAND at first you

Martin Anstice

or approach has what see always that. describe anything, we’ll done if we’ll my see So tell Well, bad, we and super I that. do been consistent, it. right? how always we – Good And to we’ve are we’re

we’ve offered level than the might we December the confidence is first wrong. of stronger year. our be disclosure second of that And And year to have forward, be of half of we course judge I and you to next guess. stronger half says kind so, And than this expect kind the of perspective move of September and

So best I can offer you.

Krish Shankar

it. for Martin. the Thanks insight. Got Thanks

Martin Anstice

you. Thank

Doug Bettinger

Krish. Thanks

Operator

you. Thank take question with Timothy UBS. We’ll from next our Arcuri

Timothy Arcuri

Thanks so I’m if in I much. the bit first for the I I question I this and just year, fab two, your everything is, year little year. wafer for had hold calculate if just Martin WFE But guess now share it’s a equipment share putting this your last and up there.

half revenue analyzing if to like $XX worth XX’s first of just half first that in was just that billion to annualizing close still still give bit if imply of year, high the you which the WFE. So billion we’re up to say, hold you’re next a I little I into that half, calendar $X half, would on

for really the knows So, of who half? I endorse $XX the WFE? guess question second sort a billion calendar close to number about is, you XXXX would But

Martin Anstice

months. the Technically It’s that can’t in to early a with same it around about of call. the $XXX question, questions. the two kind year the we level I interview response feel been I very of customary too January earnings billion answer confidence, crystal floated that’s so few I that last so It’s But reference not But ball, us I the the for it’s be question a question. answer for how today don’t have can to a reference. pretty have bad near-term might answer do fair that

But really at tell right below point to times analytics. give can’t best But a what around is I probably little you at could would above little trended We’re trending in it. this it I now that time. our the a tweak a you below variability we’ve be and the that and

Timothy Arcuri

Awesome. I’m a understand help repo, you big quarter about then play if repo Thank March. for and curious on end count Thank going think flows then But kind share as you I for also and you’re Doug, pretty of that? through the of And this think out kind it’s And to this when the December sort you. March can how of re-up to that going of us it kind you about of you. through. was how

Doug Bettinger

to I mean, conversation first at it maybe XX authorization to XX month purposefully through I execute out board a we six level. kind a always I Yes, of did I’ll to update out When you Obviously Tim but it’s we’ve this We be the to deployed. ongoing not talking it’s over something cash an you have little even gotten launched something though month when to market going all or you timeframe I got that in are future. ASRs timeframe, we’re update on, current do at the relative point the sooner. have about, going to we’re don’t what described anything those to going tell a today.

Timothy Arcuri

it though, But and plays through out, on count December actually actually how just March. share the Thanks. it how plays for

Doug Bettinger

and so. time, Yes. didn’t you one quarter a at I number give I XXX of million. just you guided we that March December only Tim, for guide anything

Timothy Arcuri

Thanks Okay. much. Awesome, so Doug.

Doug Bettinger

you. Thank Yes.

Operator

question next our JPMorgan. Sur take from We’ll you. with Thank Harlan

Harlan Sur

some Good had its my had existing next become DRAM the leaders albeit starts investor were from the and the be of taking hear at Thanks talked into lower activity. as thing year? from to the event a part to market at progress Memory some Flash your potential question. of well same also domestic the think for Do afternoon. Lam year. We levels from bigger the China making looking suppliers, their next seemed Summit memory China some as NAND you the team of domestic entrants heard increasing mix opportunity some who we manufacturing and production in We’ve when also footprint memory WFE to of about that China

Doug Bettinger

Yes.

Martin Anstice

Yes, Harlan, probably yes. does,

Harlan Sur

you DRAM, Both think? NAND and

Doug Bettinger

probably. Yes,

a Flash observed But were both in you going a little from guys confident they’re little more increment… more China visible, maybe Memory, As NAND to the there. I think

Martin Anstice

in it’s our what it couple today more our architectures we an markets that clearly anything I different the But and as for I quarter on speaking more in so don’t to all they’re rational last passes and next-generation is add forth. mean, And there’s was device any fundamental substance and I participants so view of investing public are And to obviously doing agenda. strategic have each the on the market think don’t and than of quite than long-term to opinion, market share but also for China growth think ambitious, what independent on of their. years. they’re

I likely in a it’s to. global response. it’s China proportional per in system next that’s So, absolutes that I increases mean, the But and think and year Doug’s we investment what respond terms level

Harlan Sur

in dynamics second customers. in about did a possibility positive the spending next of half quarters of still maintain how levels strong supply a placing that Great, response in of positively declines customers? I quick profitability the impacts your your strong thanks. that we as it year customers amazing, and team want fundamentals cash and had two on and the economics at I kind look It’s pretty profitability supply discipline strong follow-up. Is memory free It of memory a disciplined by amount on your half see in flow side, last thinks reign and clearly stronger of the was that about modulating this supply supply. they was focused and before time first the i.e. there If by to took focus equipment for well potentially of for year XXXX. supply sort maybe just Lam

Martin Anstice

I not I I’ll I’m everything say but mean would that. answer showing that, moves faster. Wow.

as faster the adjust therefore as customers on our probably it downside. think true and the on much I that’s So, upside is

And feeding would and five be variability they with when for as economics problem a We’re than much their risks clear lot I years taken action statement. ago more a part think along actions business. as of of XX take there when other that’s participants a anticipating the market was or would get big true ever

of are too. risk imbalances are actions manage there yes, So to proactive demand There’s supply also that. getting adjusted that the and

in a that’s So the long-term. good think I thing

Harlan Sur

Yes.

Martin Anstice

you but kind stronger secular make like I the that cyclical this the for to – own gets more to important than have feel decision message mean to it launch, the than guess. headlines of I it your they’re us gets

Doug Bettinger

Harlan. Thanks,

Harlan Sur

Thanks for the insights.

Martin Anstice

you. Thank

Operator

I’ll question from Stanley]. take Moore you. next Joe [Morgan our Thank

Joe Moore

you. Thank Great.

I be on there big quarter there seems I up and how about was frequently? more talked domestics, being sort pretty I you of was of question. that is think in should Following and seen Is we how two customers, foundry strong from of memory September a China that thirds kind aware at the anything who you’ve surprised like much that last guess, of of deviation. versus you’re the that

Doug Bettinger

to them let every know Joe, from and that. mean I know the it see I’ve single to want it I uptick was because quarter an local as in foundry interestingly, going fact, I between well as you them name Yes. who name pointed and are, I that know of you’re don’t balance guys that customers won’t memory. the you won’t. by I I out, at was kind when And look there relative

Martin Anstice

And logic actually…

Doug Bettinger

logic, in you’re right, Martin. Actually

thing my talk kind it answer a us three of – or quarter and Reality in are I is, strong was two or participants there core or two about we is, China. balanced domestic take this it was seven. to for six on a So, in mean, – three collectively was quarter. tend China it

Martin Anstice

more. there’s Yes,

Doug Bettinger

of are active And millimeter, XXX them at a some fairly leading internalized. are are interactive some of meaningful some doesn’t them but get fully edge that of technologies leading maybe less edge, population and them active some there’s at at XXX,

Joe Moore

much. very you Thank Great.

Martin Anstice

Thanks, Joe.

Operator

take question Thank from you. next Romit Shah We’ll with Instinet. Nomura our

Romit Shah

seemingly you’re the you. buyback to December. seemed equipment all all Yes, thank quarter guess exhausted in for the points bad on CapEx I your data growth expectations yet that reiterating as fundamentals during just, and your you entire memory outsiders and and

saying diversified we the So, more it in confident recovery just to of than September your being is realized shape report from sort and maybe, U or the business fair being of here question bottom. up either that you’re Martin, is the by the is V-shaped? this sort sum just of really And

Martin Anstice

diversified to today I we’ve were. we four years. it’s the of or than now been diversification Well, No we’re more for, of think three talking subject question kind

a gains or than our of company, the we’ve in the there’s by to the the to is growth differentiation the at a and headlines. of relative competitive annuity. kind growing process into speaking of process for think asset base. a mean the revenue between opportunity of an about of great the core chambers creating and products I to to I more that last foundry source profit the which installed relative SAM share rate faster the expansion systems talking so, XX,XXX it’s pace And is base company, tried installed massive year segwayed difference and only even than chambers XX,XXX we’ve in that gains share business message in not a in reinforce logic

all well. the So as kind in of that’s mix

slightly the exactly So, XX% to WFE had three is three different, it number as ago. the was that ago. or muted anticipated less not more months business much calendar mean, I XX% what of or expectations months XX actually our But think I is we

that’s headline on in year going and the put now. of first and we’ve I next it we’re with deal outlook not of of So, that mean, We’ll to expressed numbers there kind kind for basic January. an half

time some the disclosure from when we the be become Lam. will that obvious So or you

Romit Shah

you’ve And that. the buyback just on for thanks exhausted Okay. it.

we wait to So next size conference the scope do and have the the call of next about hear to authorization? till

Doug Bettinger

Well, though like the committed. got the all Romit, cash said, cash even I

the We’re through structured in these market so… products, still

Romit Shah

Okay.

Doug Bettinger

board at have go and here think to do. and purposeful, should And a where this agree, and things taken have But with wanting pricing, it. what we conversation was on generally Martin we’ll view right, with and board a on I works way of is get We’ll that will all the the the we opinions. were is

and a it that we decision, at to will yet. point and communicate not when modify have we’re we’ll we So, you it

Romit Shah

you. Thank Okay.

Doug Bettinger

Romit. Thanks, Yes.

Operator

Bank America. question Vivek with our We’ll Arya you. Thank take of from next

Vivek Arya

hypothetically next Can Thanks just Just to what WFE what say, conceptual imply you question your my business? for WFE? Martin, business. year, sensitivity XX% is for even X% taking goes it? does or grow the a keep If services down question. on your flat services or that it maybe still

Martin Anstice

then biggest of the we so much fabs. it the of which of size general, the the units system utilization installed year, The a XX-month businesses, has to the so customer, base calendar Well, during and warranty, our when dime of a installed in period. ship in there’s single the sensitivity, kind not that disclosed over because number in we for it’s influence kind base on of

with likely the spares we down, the industry. of WFE see So utilization utilization there in of consequence. reduction If the service if and a base if there’s goes in contraction see is change – you characterized just of growth utilization up no and if accelerated that show you’ve the you’re the no in installed worlds base the installed then up, the and business you installed to goes base,

a spoken in prepared productivity a assumption our today creating of more to you for be invested pretty some customers of bit little have perpetually this our utilizations Lam. we to issue, opportunity success in comments, here building installed of time will service to have reason context customers our high and So, and a is in really of and base the related products base for run portfolio contributing an in and we are independent anxious offerings now, revenues. In no a world, kind about done managing dip the good installed as job

control. our control So, our that things and there’s some some are things out in of

Vivek Arya

a think up as do environment the you overall today, from when see typically or CapEx will get And next what what you it. do memory you Got down spending be? and is visibility year around follow-up

Martin Anstice

where be for. bit us earnings just quarter’s the call. to little asking on Perfectly It’s specificity next you you’re will more it color too on normal give in timing would early give next for year a

Vivek Arya

you. Thank

Doug Bettinger

Yes. Thank you.

Operator

next take Goldman from you. Sachs. Hari question our Toshiya with Thank We’ll

Toshiya Hari

second you more up key going improving XX XXXX. you’ve first talked or budget CapEx of is the to much. nanometer big revenue half XX of logic it in Is your half the to positioning driver to XXXX say due basically or both? Yes. there so Martin, it being about Thank up from the relative customers your is

Martin Anstice

It’s both.

Doug Bettinger

little a bit It’s of both.

Toshiya Hari

kind you to were and all of magnitude, that, over half. Okay. you related of And to foundry in logic power if DRAM, – terms then guided for

those the is that magnitude second half had you you order to the to terms first that three can If something in half, the do? of guys rank from increase

Martin Anstice

and you. to tell on a haven’t paper front like I that of piece now down like me I’d – in written decided of

I order. said, logic any just middle. be without I’m not rank of numbers, to which image order opportunities would speaking fastest-growing. characterizing I’m kind the rank – kind the DRAM outlook includes, would Lam, is stuff, the say NAND’s will as and legacy so probably and the level here, I and contractions, of the kind be that slowest-growing sensor probably other foundries it’s So, the of And for kind it’s That in and revenue of our industry and logic,

Toshiya Hari

Okay.

Martin Anstice

conversations. early pretty having those like It’s Yes. be to

it take this point. it’s So, worth for at what

Toshiya Hari

Sure.

you market plans? long-term the $X line it describe, tracking of Martin, or remarks, today fair to a how say a growing share. this gains? etch. bit a to As where both your clearly, your billion business or revenue for attached incremental quick you’ve of on you in plan share year, follow-up, wins, question net relation you’re would market long-term some talked share. just had relative and I in XX% dep to gaining about Are that your in you’re of model, you’ve prepared if your where In Is ahead you stand

Martin Anstice

as linear couple a a it’s of data points. never But answer. to Was tough question

call, this to compared decisions and I in decisions the actually remember defense tons that that about a more about or year you penetration terms to year. we’re activities in earnings last a when economics a because now on in leading even half referenced DTOR half kind talking right, PTOR of talk will there that of year, year play timeframe and in the out the think fact might there’s decisions from second the were So, first made relative maybe this of we of this XXXX, the I

So, that’s ahead of us. kind a still of loss

ask game for fair question me to the So, it try same in January. answer to you to and

have though months never don’t we think to we in defenses net and that So the a far, again, positive kind but penetrations of this from forward-looking of everything, we nine first year. – the defend we economics

So pretty, pretty pleased.

Toshiya Hari

you. Thank

Doug Bettinger

Thanks, Toshiya.

Operator

Patrick We’ll take Ho Stifel. next our from you. Thank question with

Patrick Ho

XX, of push it the as seeing and equipment very industry that you guess trends some DRAM. I on are little looking in of front, Thank eventually just continues new bit named DRAM comments the we’re Martin, you these the intensity, believe some much. I could to of XY, projects on lot this follow-up but on first provide also to at a intensity of, seeing the off, spending XZ, from we’re sustainability fab DRAM capital a today? Do guess, trends your capital impacting

Martin Anstice

I of think the economics honestly. kind on all the it’s the customer about revenue of

they’re has content more transition consequence, broader to significant I reset but what of there demand, has seen in last of demand kind emergence density been bits set that an that, discipline, obviously, think And an managing their years couple ASP of a than and supply seen the and a we’ve to is, we’ve customers of of value that to customers. the the our selling away from in allowed drivers. units and

worth by kind of average that’s kind the environments. of the bit more created this virtue So, of computing broader in is cognitive value

one no from in But revenue is so the my next, as the successful relative be to industry, I not to the if getting that. DRAM the are and Lam cost because of sure there by transitions our the today, continue the to And to ones It’s DRAM did answer than by baseline of think of collective in kind intensity in installed of try bigger clearly deliver to transitions be go less much times less customer intensity the they side of years companies. I said it. DRAM three base, a history, and mean productivity question their we of I discipline five right? I’m for in relevance, have continue to ahead? continues cost a lot interest and our – the to less and intensity there’s of to if But the improve XX enabled ago. to a side peer capital it, lot the fact there’s customers paid significant that generation compared when the

Patrick Ho

question pace that area to bit existing you can segment. spare terms of labor How and services of have business leverage, mentioned growth is is the growing into the of OpEx Doug, increase the or that side going in to follow-up business? terms I fast As the little that guess that things, incrementally a workforce the business, where business up have much of you your my an spend; on that increase of you parts keep for in in also with you’ll CapEx

Doug Bettinger

location. Patrick, different in physical a a factor it’s different

not leverage the a have of for and manufacturing, to from standpoint labor manufacturing. a lot parts in there��s So, we invest

base So, for it’s and all supporting higher end to at a of the goodness make installed investments it’s got we the day, that.

Patrick Ho

Great. Thank you.

Doug Bettinger

Thanks, Patrick.

Operator

take We’ll Instructions]. RBC Capital Mitch Steves Markets. [Operator our with question from next

Mitch Steves

started just that had a Hey thanks that on technology. something quick taking it’s guys, question. for on of have to told of customers come working your I that next or any already my that Is one kind nano-secular there is year?

Martin Anstice

our that to question. answer customers Unfortunately, have

Mitch Steves

no on Okay. have pricing DRAM guys the guys general, Got you DRAM right that in you guys do stabilize view secondly, guess, it. side, And when in or then do think now? the – you I any, would would guess see I

Martin Anstice

our Well, have our argue than ours. view worth action, I and I mean customers all would as more customers I have proactively a is again, we demand, it’s and taken lot of view, about reactively. a much supply as think but the

everything moves so fast pretty these days. And

than ours lot a more on So of ASPs worth again, customer’s devices. is disclosure

Mitch Steves

Got Thank you. it.

Doug Bettinger

Mitch. Thanks,

Operator

Thank question you. next from with Twigg Weston We’ll take our KeyBanc.

Weston Twigg

for taking Thanks Hi. my question.

providing visibility the commitments into whether First, customer insurance Any fab trade be that of seeing you’re that’s helpful? to heading I’m in just wondering with having in any work if color or behavior would or new you’re change conversations capacity XXXX. terms related the regarding they’re them

Martin Anstice

best of a of a comes about to pace the my the things and really of statements or costs read making terrorists which investments. few they’re kind knowledge, changing although kind referencing terrorists quoted few Yes. at I’ve heard To customers’ to that, the directly of when it nothing’s related

In read I Taiwan. out of one fact, today I think

the reprioritization all that extent irrelevant. at probably that a in mean, So, is because more a some company. of of terrorists of do I’m not there I There costs, sure a it’s to the consequence company is level. things and and of has we

seeing directly hearing I’m just So, to things. hard but that not I’m us conscious kind some of irrelevance, correlates. for statements I’m and

the of outlook the in we’ve today. it’s so described that And mix

Weston Twigg

then follow-up that a And capacity my pushouts first DRAM very That’s some on is the from half seeing helpful. ongoing from – just conversion mentioned, the it is more new this just related is more you strength you’re activity? in there of or to half, is strength it from Okay. question

Martin Anstice

It’s mostly it’s think massive I statements. as kind originally of planned. a don’t

So, these there in are any not so many days. participants segment industry

you for So, sense what who a who and got investing is where probably who chasing is purpose. of

originally as pretty much was with plan. it think consistent I So,

Weston Twigg

Okay. much. Thank you very

Martin Anstice

Weston. Thanks,

Tina Correia

Operator, we’ll one please. take more question

Operator

from our SIG. Mehdi next take with question We’ll you. Thank Hosseini

Mehdi Hosseini

the squeezing positively quarter, week? that should extra to me would for in. Doug, also leading back is higher by going Thanks the I expenses, to for an your extra be which your assume in impacted Yes. revenue week march commentary

Doug Bettinger

it’s we though. number. Well, meaningfully the know give it going an we product, the to you Mehdi, I did impact will end move know have do expenses. that technically we’ll the hard definitively, the revenue I to the shift extra when week get guide don’t of quarter

Mehdi Hosseini

just make to sequential Okay. do to deferred want And sense that basis. get then the math, comment that back does if XX% your Is a to just you? simple – a on just about I shipment – go And revenue. I to I down

Doug Bettinger

getting Mehdi, anymore. shipment not we’re

about anymore. We’re not talking shipment

Mehdi Hosseini

is the quarter. This quarter. September this is the No. for for September

Doug Bettinger

yes. Yes,

publicly; shipments revenue is about to now. talking all be done going we’re We’re describing

we’re at day, going to what change the You about. get recognition revenue talking can the on given in to the revenue do the is end but analytics whatever shipments, timing, want you of be

Mehdi Hosseini

great. that’s Okay,

to these impact with have contracts Just given installed services, actually the better system, a long an help on your Does visibility? follow-up that backlog? service you on increased enough your are

Doug Bettinger

Yes.

Mehdi Hosseini

your is longer revenues that’s not a WFE? a offer rather to services case revenue that and than if assuming mix, the why referring larger the becoming So, on part of guide just

Doug Bettinger

mean Mehdi. in end what And still quarter There’s any a the is for think the the to important meaningful, the large one I Martin day, turns to you services, going about at just said. amount for we backlog in think it’s that’s on describe understand isn’t business me, we certainly it, what’s business. We’ll to of tried based. that of just as

So, we’ll give you some thought.

Mehdi Hosseini

a made disconnect and guide you how it I’m in here? growth difference compelling, the the to just very just system what hasn’t wondering but Because still is is installed

Martin Anstice

true. sure not that’s I’m – actually not I’m

couple for quarters for think quarters quantitative a last progression today. perspective some have on you I the couple some the including of times and qualitative of times

we people have characterize So, to say to many what those do do. the visibility as it’s pretty currently that to hard say and as doing what don’t we we’re

So it we’re doing the take worth, can. for best we it’s what

Doug Bettinger

Thanks, Mehdi.

Mehdi Hosseini

you. Thank

Operator

I’ll as more to turn you. we no speakers, And back have it questions,

Martin Anstice

Okay. conclude With Thank we’ll that, you, the operator. call.

Operator

now and Thank may a you gentlemen. have ladies the disconnect and day. great you, rest of

Lam Research (LRCX) 16 Oct 182019 Q1 Earnings call transcript