LRCX - Earnings call transcript Q3 2019 | Lam Research Corporation

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, and welcome to the Lam Research Corporation's March Quarter Financial Conference Call. At this time, I would like to turn the conference over to Tina Correia, CVP of Investor Relations. Please go ahead, ma'am.

Tina Correia

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

business the the afternoon. press quarter, call. this also little release and website Investor presentation During overview Relations the outlook distributed for financial The will of a we XXXX Q&A Today's our our for environment quarter. financial June the includes was today's The results on Time Pacific forward-looking are be slides found in XXXX section today's until uncertainties this call disclosures last unless specified. on today's P.M. the Today's later additional and for SEC to be presented statements can our detailing non-GAAP risks Time. and reflected Company's and our the after March accompany with non-GAAP share and along that found the X:XX Please on financial be that will to public reconciliation information. in With the review in subject release call, be on P.M. our slides results website. results let me will see results call otherwise of a release. that the over press our to Pacific call scheduled replay X:XX Risk is A basis A Factors afternoon detailed accompanying between This available presentation hand GAAP of earnings discussion this can our of presentation filings. Tim. financial

Tim Archer

the solid revenue, and above execution environment. ongoing $X.XX tax EPS challenging share the as last and to in the your our on guidance questions. call. a of favorable and industry we of prepared benefit the Key a earnings and efforts customers performance March go margin, partners, execution business of world. came and a rate our to exceptional we operating helped around Lam After continued near-term metrics comments, the look Doug range high-end everyone. hello attributable by all our exceeded delivered continued in forward in margin of of including and of demonstrate support quarter midpoint and and employees that repurchases. gross income to I the Tina the This Thanks, gave our strong Lam always, through is

on are Turning our directionally conditions our January now and to Industry perspective industry current unchanged the from outlook. call. environment

and spending In industry demand correction channel profitability rationalize business continue data we month, better the to for conditions setting well seasonal through continue are February balance demand supply up balance with will with [ph]. the downtick extend and into as continue as last consistent DRAM. In Also customer since demand we expect Logic. to the and Foundry DRAM Memory to our for WFE We to expect long-term be by Though XXXX Memory better in exit expectations believe below both, for slightly in NAND growth line prior in marginal continue that trends year. near-term reducing dynamics recovery now offset for trend supply long-term bit year that commentary, spending $XX through the and call, XXXX our we where be billion. this calendar to we spending on shipments supply believe we normal and and a to see bringing low the NAND, improves than calendar year market inventories as indicates recent future focus customers

we forecast our WFE due to smartphones customers higher than etch On leading is baseline spending related to side increased believe ramping content than to previously prior appear which slightly notes we XXXX semiconductor partly is Logic the in Foundry and faster as XG. be

the market of gains, and expansion, Intelligence, minimum of for Artificial lower to and provide for memories. designs. trends creating MRAM cycles to on for these served This installed demand the interfaces transmission, confidence I XG of Lam growth from served on-chip drivers memory embedded would We're generation revenue off-chip using the costs. business IoT number architecture innovations to in and our processing on is available and execution Lam power all integration in demand few is and Semiconductor on for long-term storage are opportunities always market is chip accelerator change our lower three in data set drivers compelling as cyclical demand computed share X.X, a of Industry expansion in specific leading long-term base. positioning available leading new capitalize from growth is designs, through timing exact use system a high-bandwidth the move the include Lam; benefit and of of such require Key system Lam's driving changes predicting vectors for While difficult, unchanged. compute to heterogeneous at trends. how memory solution, like to examples and our

lines First, devices deposition which increases new etching things bit GDDRX adding intensity. bandwidth memory other like more among improved by

etch are recognized packaging and need are through-silicon a stable provides VSL and market vias packaging market Second, wafer capability the and other high-volume XD SABRE TSV high-bandwidth integration and in an heterogeneous for technology electroplating and driving memory Syndion tools and Lam's increased level novel for required production. etch technologies. depth leaders

goal our which SABRE differentiated angle and defense of our Lam share is customers. it's novel key ion superior third, our positions beam it's share emerging quarter, etch new to to growing and ultimately new over is all and perform in and the market-leading successfully ion customer-enabling we MRAM in as activities. materials focus expand From technology In remain technology-enabling and For we to And density for winning deliver in technology. we served memory addition to these multiple first on Broadly, market bit wafer by device portfolio a and believe Research both, require to product delivers our energy level technology etch ion-beam such of disruptive profiles deliver platform. control of yield the calendar well introduction technologies system market. committed increased services emerging both, fit perspective, is the defended on packaging, to and deposition. production-proven XD inflections, devices etch continue unmatched available employing we our penetration and are opportunities, the co-planarity to Lam's market

Technology in and differentiation. our opportunity which for choice rooted NAND. on wafer QSM the gain fill gap high-aspect confidence bow delivering is architecture low-resistivity Lam's teams quad-station word for ratio the The the process as share product technology (ph) our our and high-productivity using NAND architecture where fill, or Examples build model STACK, management QSM for capability core advantage the films ALD XD unique chamber of include Our QSM a fundamental is tungsten ON-ON differentiated in Lam's films becoming new platform process rapidly backside for customers is for Solutions. line. market-leading XD deposition, serves

products positions a new Etch etch Lam's to we ability Logic technology our An as example this growing hardware new manufacturer equipment. with customers. have have Data productivity including on of of We reliability copper shipped, deliver and recent equipped and unique in Customer to penetrate in System finally, successfully our X,XXX R Lam's technology our sequential self-maintaining revenues in for Memory, press engagements better era release stating module drive also full to using and And ushers notes. we installed shown uninterrupted for quarter that a Today's ability new We Business Kiyo leading set. performance, focused one importance growth key and partnership and our the that this continued cobalt innovation. compelling Kiyo semiconductor fab-space NAND commitment of Etch signifies in utilizing the focus of a year we beyond is Industry our through this saving believe applications bring and milestone demonstration XX-nanometer. computing is is separate the X.X productivity Foundry, services today leading a leadership to the a our contacts to gate electroplating materials with we Our of materials to long-held other position focus QSM System we markets. productivity and for leverage on architecture In we Group, hit with metric saw win issued our Big Corvus unparalleled. production in technologies, base. scaling from demonstrated announcement require And to semi-critical Support in In leverage as interconnect XD platform advanced etch a continue innovative such device layers

in in Our in primarily the business positioned on summary, Foundry, base level spending Reliant deliver installed industry. was on-track notes strongly again revenue than Lam capitalize well our as the the growing in is in and highest Systems business grew a March reaching well faster Overall, demand at more quarterly as This more year, the long-term quarter IoT drivers on record in another etch by non-leading to investments to installed In base. history. it's rate driven is semiconductor our initiatives.

challenging continuing for we emerge environment. call prepared me on execution growth we industry are to turn objectives, and stronger meet believe We our to And his WFE that in a the let performing as near-term recovers. will by to well With spending over investing Doug focus remarks.

Doug Bettinger

cash quarter. that executed We annual we $XXX a Good to from midpoint the stock exceeded rate metrics. today range Research. stock per operations March earnings second a increase realized and highlight Lam afternoon basis guidance due Tim. the employee highest generation well a in you the due the in the from grant exceeding that everyone of I'd share we price mainly during our all tax in the March of Thanks, more tax I which investing our financial history results came at Lam high-end us our a know in the quarter. like also to season. what our quarterly of the with Great. the busy had the quarter quarter is on is thank for benefit on that favorable during joining to guidance for March Earnings cash provided in million lower

believe be during investments. levels As driven more spending of we we XXXX WFE spending the last Logic would by memory lower spending our half reflect earnings Foundry first for call, and would discussed quarter and

Logic XXXX unchanged. bit and Our view a than DRAM ago, stronger Full today be Foundry might little and expected weaker. is be we largely little quarter might bit WFE a a year

a fairly in percent from year-over-year been a running XXXX. expect We to consistent the level down has will high-teens last dollars at mid profit spending WFE several be semi-industry percentage over of continue years. the WFE as to

and number continue Overall, year IoT new system Lam's notes. We than Xx continues segment double-digit a Xy segment notes. XX%. driven fab Memory on combined layer DRAM the Xx decreased for be spending Foundry, to X-nanometer Memory is Foundry etch to revenue is spending of X-nanometer. DRAM doubled and which this projects on at accounting NAND is the of legacy track The in for and of to level XX% mostly at focused the December the the focused we quarter. of Xx total XX% XX% highest system's XXXX. system both, Memory and of since composition Foundry non-volatile Memory by XX% wafers, on spending the revenue March revenue saw conversions segment Foundry spending spending The and included more quarter-over-quarter seen and XXXX focused in we've leading and driven from was spending in

As other the and Logic in also at a notes. XX% XXXX the contributing XX-nanometer target was and comparison systems up profile segment revenue. X-nanometer was of And finally,

cost to and primarily better-than-expected, remind spending several XX.X%; a volumes, product item just on mitigate one do, of the appreciation guidance the spending on $XX related at slightly our non-GAAP two-thirds the you'll slightly of our in day. quarter. to mix the that the stock Operating Let's margin the quarter. the margins income approximately the much We margin and reconciliation quarter quarter. million market lower million approximately delivered pretty neutral and share the to business we've March with the workforce we press of for a turn and be in expense operating midpoint spending as due March expect Operating compared the R&D was the a and to to in XX.X%, guidance Gross however a severance X% earnings up control. March investing during us the In see this was expected We actual for It's We total nearly are $X.XXX the the you to range. the expense. March action tax above long-term impacted see the employee quarter customer the down in from are benefits the offset payments of lower quarter. the quarter. were than mix gross March concentration, Spending And basis the income sequential earlier. do the by March that quarter took always to I'll for to described table continue quarter factors as to release. the be to deferred of in The function in GAAP performance a billion $XXX for impact comprising June the this of the other with of December which quarter investments non-GAAP and per I'd plan. was tax March came our resulting focus such came end which was the and exposure; you during from in hedge stock P&L revenues the shows quarter rate March $XXX that product our approximately XX% point for to provided. is rate in increased negatively quarter prior at due out compensation I variability in March which quarter-over-quarter. million of to to our should I operating expenses also line R&D of midpoint we by was charge related expenses the incurred of

dividends. in notes calendar XXXX note and our principal a we purposes $X.X general are quarter-by-quarter. tax to of in as we environment. completed the to program the will value there be to among to in to rate of mid-teens including senior quarter credit fluctuations in of and rate issuance take continue low fund year, and for rate pay favorable repurchase decided things we the advantage June corporate the other this For March billion stock interest In proceeds The expect

issued interest For our newly expense, quarter. other million expense income $X approximately and debt added the in for March

was this related in gains out, pointed compensation obligations under our on offset assets by I as plan. OINE However deferred to

on $XX In related quarterly quarterly now expect debt. basis interest total, a our forward, million. new have approximately expense expense to million Going we around of $XX is to interest

to more in We continue during the billion return repurchases. share to funding capital quarter dividends commitment demonstrate our and $X than

point driven range for available for you shares reduction. X million XXXX notes schedules announced shares EPS March favorable open $X.XX at the guidance approximately convertible March that our shares; XXXX came in website $XXX in made just the $XXX Diluted notes per our that lowered the dilution in at over by September For and for that through share the The completed March decrease out quarter of earnings call January. quarter, XXX per million impact share the have includes in count the related new to share program. structured And authorization which million a XX dividends dilutive the million Relations paid repurchases These diluted buyback we we mainly tax the that's you from under billion count to share a repurchases. I'll quarterly $X over million remind were quarter of the combination buybacks quarter. were out approximately And we shares our market reflects and the rate. we year Investor from I'd share remaining XX% remaining Earnings your last is was in convertible in by reference. on which a

Let me the now sheet. turn balance to

DSO and cash debt short-term increased I the mentioned, billion from to notably This the days billion March million including issuance investments Our XX flow. the cash $XXX by the $X.X improved driven and restricted six days. cash prior $X.X was in that to billion operational quarter. in quarter $X.X over by

supporting installed the from prior XX,XXX action Company approximately consequently compensation, quarter directed X.X equity Our side the quarter employees and prior non-cash in is $XX which down million inventory $XX slightly million expenses mentioned. our compared certain a towards for X.X full-time for $XX our of times from March with the was quarter levels the We March base the turns previously line CapEx Capital increased decrease March quarter. quarter decreased amortization. business. and inventory I with included investment December to approximately times the depreciation in March quarter was that was the somewhat The was million due timing million to on quarter. in to high regular December decrease expenditures the the the which exited in for in Due projects and million workforce in of CapEx $XXX were expectations. the majority $XX

is to Lam's the headcount For prioritize long-term SAM that we and supporting continue growth. market share gains, expansion, base business installed

plus million; of earnings XX%, Looking ahead, operating And XXX and per margin the our on one We're percentage $X.XX, expecting shares. plus questions. my approximately the point; I'd revenues $XXX like June minus or now would concludes of $X.XXX the of now XX.X%, minus non-GAAP to or plus or point. margins percentage Tim provide million finally, for plus count Operator, call quarter. guidance XXXX prepared of or for gross based minus open of billion, that like up share share I one to $X.XX remarks. minus

Operator

question come with [Operator Instructions] Pitzer Our from Credit Suisse. first John will

Unidentified Analyst

Hi maybe in John. year (ph) OpEx remainder is in the wondering the the what that talk for if saw was for I trajectory you could is lumpiness through we given like March? calling guys, this Adaa your of looking

Doug Bettinger

Yes. quarter this would guess, time. June a The best it think that or only really be guided way about we're numerically again, one plus I quarter one quarter. But at is, -- to it's we give I you mean in we only the going at minus I at formally to where the guide time.

Unidentified Analyst

think and this domestic us terms and opportunity puts Thank if the with that takes WFE China where in then, you. maybe updated macro around of And given an you your like that situation? view then year you provide of could the looks

Tim Archer

expected also our our view stronger changed more we is on -- $X this on we've in call domestic in said We China China, at than WFE in had year guidance we a domestic And that. as would the actually greater gave call strong to our Sure, last that little our least as so well. I billion, haven't can as last do China world, be elsewhere that. said we business position or up the bit on that be

effect been there expect closely, also monitoring our has don't business we're environment at really impacting no while You know, point. our the in change it any results we really and regulatory that this is on

Operator

from take will C.J. We a Muse question with now Evercore.

C.J. Muse

weak the backdrop on Thank per imagine afternoon. of pricing in segments good it's $X terms had given a on technology both job first think question. question, just for great you taking what of shipments plus across total your part in I Yes, getting you guess Memory; I billion roughly the quarter alone. in buzz I

And half is, as we the of question if terms ramp that for of How in a half half that the account back so into take the shine chutes second year about should year that there I guess we've we think transition look the from first and in heard -- you into or the the you (inaudible). and ASML the into green XX-layer Are what XXXX, would back about of half sorry? think trajectory? there is something XXXX

Doug Bettinger

it Tim take little will I think. a I bit Yes. and

it for C.J. our in really don't isn't recovery think ago. outlook see happens year, We likely we You quarter earnings we know, -- do from what communicated Memory sets in changed up a this XXXX. well at -- at all what a

we demand year. I to which some We up meaningful at you sets the under it's well, exit want recovery of a DRAM anything? or is, in to don't of really see meaning expect rate where this consuming think NAND add supply be the and but Tim, all recovery inventory both, us

Tim Archer

clear that been very really see year. this of -- saying No, I a that's our don't recovery think We've we position. the statement it's

the know, the XX-layer a are through conversion mentioned we're capability in the from other standpoint great for I is conversations customers of to couple increase and cost, like though cycles doing, of job technology you items middle technology Lam focused of this. way their their and guess reduce the squarely You conversions like

right capacity that year. just helping those focused technology we right our on green as come conversions and But And said, will additional additions execute you this so say customers chute. we've is now be and now there is when Lam through see an don't that they

Doug Bettinger

maybe And C.J., just comment one from me. more

this channel said here it standpoint know early I've at The will but it's do think it obviously next year I is it point. more from to point a in industry somewhat than year time, As will now. working is point inventory -- or whether at me timing and that investment I and take and right will at recover some is the interesting later recovers some some some through be in

C.J. Muse

very the more walk are the run in through follow-up; And need or funds? kind what perhaps the considering offering of cash as you debt Okay, buyback quarter can And magnitude contemplating with the a net helpful. you gross to business? you rather cash a of Thank the aggressive you.

Tim Archer

of the I'm relative the do communicate buyback, we to continue that We fund favorable too last to a we've really don't market to $X new rates quantum and shareholders future to plan debt $XXX with anything impact the my think the view that million relative of buyback. quarter do. Obviously, the thinking have timing tell whatnot, about in that. I been new nothing pretty but debt C.J., to as in we I so a how we the advantage billion will this decided helps buyback. in past take to just It credit Yes. quarter, issuance what remarks cash doesn't the executed described ago, Thanks to except announced we've to really C.J. and prepared much demand as and returning you of judicious the I

Operator

a Malik question with Citi. from Atif We'll take now

Atif Malik

can a complicated thanks mix; have We Hi, tough in WFE a Tim, as share question I and to market, of just environment. do and Logic modestly at a can being similar understand on push to natural discussion out horizontal bigger I that with becomes used spending, XD today taking EUV for good one was Conference, your the a mix then that EUV? declined from came nanotubes share was there X-nanometer looking XD NAND -- a you end devices beyond Logic my understand kind we what the offset the your market from two lot the things it when bit what headwind year. And of job data your years, I off have WFE seen forward of for question moving SPIE all migration. and to shows wanted customer or products Gartner on is share. nanosheets and are little your to last

your So changes? can of terms because just thoughts architectural you. Logic improve Thank in start of to your share when

Tim Archer

Okay, when sure. Lot of be kind Obviously win we great think note, head-on. questions for. in there, -- first, to we so at we I'll But Gartner very do I share positions few just maybe out, will we feel critical question first point looked compete years my the want to in good accomplished relative the applications. in best. I taking our market share last about feel we we've don't mean, everything to report, about the what we of acknowledge we

in they the win to go really those we you everything hardest we they once those critical secured collaborating made customers. WFE sure segments that's that build applications really XD you foundation then the And that the on else. we on also the NAND, fast-growing change. can closely I sure because get focused that likely we are we our that are are like are least did, the of applications key which we them, with have to And made mean so -- are applications critical applications but stickiest; know, You those and customers

again, that environment said you lot We're up said it spending our this I area? But year and of I'll innovation and on the customers. in about of first, on foundation we welcomed see saw is with environment better the can by productivity you focus as you then release. it I when after focused semi-critical last our think semi-critical productivity is press share, the on yet time pricing I've Memory, us this in What you scale I say application customer just -- do again, critical that A that. in top want innovation, think applications. build to and do the and in it

of So R. release Kiyo press is Corvus Etch the a battlefield the semi-critical usually productivity, our with about

benchmarks out to I that that to to share not our what took last a our within that DRAM space as increase WFE at in some think control. mix, for in such large almost this will much set Lam of year significant fact, by element so XXXX continue are all that in drive Things device place us. to and within and -- are WFE and XXXX saw try increase so Those calculation. you things our no control; point was look will in productivity spending are for just in not NAND a increase

know So on be again, to all think based extremely in I Lam that. have XD we and choices positioned we've you positioning, strategic in made strong NAND

some work so some will it And years -- go years well. it doesn't out quite as

have we good, else's. really anybody and position wouldn't for I Now our we honestly, right trade feel now -- but quite

point office at and looking inflections those those use not every X-nanometer about improve comes but we're proven spectrum our play CTO ourselves I'm kind that improve, applications. share intend expert our position on your we've as across inflections -- horizontal to won't finish we a one. -- your how so. that always new gain of opportunities on We continue to just Logic, our for inflection nanosheet's the application Now of to I (ph) to have my entire investing note do and ability we'll

So hopefully that answers your question. Thanks.

Operator

Ho a Stifel. to with question Patrick go from We'll

Patrick Ho

off XXXX Thank you much. very maybe Tim, the outlook. of terms in first

NAND key are much turn remaining be I should some variables variables what to some in pricing the are market? the the the or just environment? for Is and is change of monitoring situation? are a this rest the muted detailed it Memory look DRAM, lead positive of pretty in you that spending it year. What will inventory the of guys that outlook about a whether investors the guess You through the it key memory out for

Tim Archer

Yes, mean asking question. day. a Okay. mean, every ourselves I I it's time, great the it's one we're all

very trying points begin Our them say least to much what better their environment the are I right what at improvement strategies small offline, view trigger what we're capacity view balance. rational, taking on and for seen to some what's happening investing. the we've talk these are a supply-and-demand our are accelerate from that we now customers mean believe have is But of things in in pricing that all will about -- is amounts the

Doug so is watch customers comes no just we're systems. So when back, place demand about they ability talking we're going them to watching orders on to come to and drivers. to is they what to in the There sure as question no limitation know the we're customers back, sure tools, that making close we that staying is we for -- the a for making on it's continuously. and lot those, just I focused dates And when our want we're regardless about talked ship want there of us -- Memory whether do to said,

Doug Bettinger

to channel; supply got inventory through when the pricing Patrick, is you this is to be as is all at customers inventory we clear do hyperscale that pay can pricing, things Doug. clearing that there how the too. And does. there To needs I of up some about of all obviously, by a it so can; are you're to what inventory we indication we see think is that said, point we Tim determined do worked all how that with will how and me can our the it, in as are an And think that with to well is out. it inventory all understand I lot it is How channel, will demand do our out. model waiting to you I and seeing we're that, itself inventory I think there the you when is guys, know best you about tells clear as because moving clearing attention in pricing and that out, until is model

Patrick Ho

continues edges of of Right. my the know talked being give the seen last installed qualitatively as you've color to And of trailing growth to we've give Can question obviously kind business where over perhaps etch for now and where saying leading Company you grow of a just a improvements. as I base hidden both, more the opportunities how upgrades, bit about etch the is you driven that with Can NAND of couple productivity you installed follow-up etch? little both leading versus little of trailing much as base a years. Doug; bit XD some driver you're just for from color of installed growth well a front, it as on shipments the that base and

Doug Bettinger

of model is buy out run upgraded, with tends tool, it to long be in a technically be field. think it all the more roughly how stuff, from the of there about And to parts regular our tail in -- so I as part stuff need profit might we've need of he a past field company's the refurbish to this that's else; that's mean leading-etch we've to stuff chambers tends to one back, a be than business. need past, spare the is decades, be a we the generation business Patrick will result part most in the the done described the But right, in field, consume I have some about as and it it sell being quarter in spare complex maintained, that as this parts on a they and great talked it. things to the the somebody this customer it, point for business, At basis. a that's things tools about will very is the lot

equipment when down obviously, that of this are like will north likely as year well it a year XX%. it year Now is, as in than more this sales new be much

growing you a that's going. it the this just add Patrick; Tim, anything? keeps is year part is, of this so actually would And this so business year great

Tim Archer

year which our is looking is would Yes, when mindset the kind their increment Doug's this reinforce their right I turn them base about to what to add maybe is only for which capability to services definitely of They intended win-win I increase is of is, a good tools it think year; that help thing the to upgrades, customers whole opportunities quite of the but to to that this do, even a us already existing help kind and like the this now business to out go very performance leverage in in for year. them and the add that business. installed in put it's it's more is get capacity business business without probably having they've are productivity to this this means that place upgrades, this often capability actually year point the next that's that

Operator

from Arcuri from question [Operator take UBS. next Instructions] We'll Timothy our

Timothy Arcuri

much. Thank you very

share questions first, on but you kind get answer world. still And Tim your of I a to just capital is you've in had obviously, to what leverage So layer two. are to sort lot on I XD I planner migration had. a wanted and world the the NAND I XD that the a versus great dovetail guys of a conversion wallet intensity of of guess,

of that per the sort your you WFE you XXK; is what's XK much wallet? help is can how that So, spending us and or think sort of per of baseline capture

Tim Archer

here I'll it's -- great few to you're close question can that refer conversions make get the can required density. in to how we What we to other for. see and what we basically and things level for layer the the mean, XD maybe is back specifically I'd the participate a increase then are talking participate I'd we've say; of we I NAND; significantly detail to as technologies right, you're stack quite looking Obviously, taller, and said,

believe believe can and don't we our say is we from Doug think actually but don't have, I I spend what exactly going if XX-layer. about externally. to we've talking XX-layer me we're of share correct that So quantified

Doug Bettinger

it Yes, numerically. we quantified haven't

Tim Archer

stack, at opportunity bow required that at expect. critical deeper obviously to on get to Day mentioned do etches, the Investor still (ph), new it able transition What you're the Lam's films building taller be you're investment wafer you and intensity stacks as between us to you I all. done able that year the process know, we when and meaningfully might to stack films I are the and of one; Those are last being wafer greenfield for layer show when we every these increases we've increase was understand the layers. for mean stacks, it's moving taller wafer. -- new that you did control -- internally, things a taller a capital Clearly, yield to build those a taller

as though perspective piece spent a that are we dollars did I Investor we because other and required layer the are guess think Day share conversion significantly our that and tools that increases that the WFE affect at -- are while say, of transition mention heavy. share quite to I can less, etch from reiterate the our depth of actually wallet primary is absolute you'd

a of becomes done And do quantify towards but year is like turned be we've know so not achieving you, in But in we would the today. prepared I maybe so a probably conversion share spend area. this for externally, most obtaining in that which a to attention it year that of don't higher that when I believe total doesn't and

Timothy Arcuri

Thanks, I was XD that XD Tim. versus world. to the migration just Yes, was kind where at, of getting layer

the free forward? free still flow so I a quick that more really the you versus that of than So, this were And thank your opportunistic free when think is all the paid the question just you repo a going lower flow cash I Is guess Thanks. little Doug, payout of of quarter. higher? on is now stock sort flow how follow-up; stock and on your cash cash for that. all And then you was payout

Doug Bettinger

last about think as our share is, the metric are it Analyst I opportunistic. be at are our to is than Yes, several down our what it the authorization, that year know it's least business announced billion, call attention we say means did being we to of described not the fair Tim. in last about to what goes. the last we'll at it of and I've this I return that the where perceive think mean again to our quarter close committed for last and is Day market we fact as $X again, count your are more pay I as regarding free we to think June we're that at we be way June things been of observation communicate the cash is XX% but we're flow year it we we The right, and was didn't quarter stock sensitive executing. earnings a as going to that the I years exactly it and the But value formally I and going trading, timeframe in the obviously XXX% see value new I'm XXX%. to are do opportunistic, exactly you committed

Operator

Cowen a We'll & Sankar with question now take Krish from Company.

Krish Sankar

Hi, thanks I my have question, taking for them. two of

tail touch the going just on some my last understanding First like looks to year; the lose customers share market and dielectric one, you Tim was NAND because is etch did productivity. guys upon of (ph) share, especially it in to that two versus tail of

share the to more will etches etch? was loss Is in gains a stemmed I'll question you offset And challenging to flip think we figure out whole that. than can release a maybe trying I probably way had any do Just for had your there follow-up channel the related weakness that or press -- mean, in be the more then Doug.

Tim Archer

dimensions, comments area going to semi-critical productivity deposition space not as many we on my well in technical NAND if we're are for where of talk general, as any are as application -- that, productivity. per capability best-in-class both talked decision your products terms is, that about tool; technology we're in many about XD we equally important are certainly said fab the per the in delivered obviously an but it's delivered. basically not already all I'm dimensions what wafer, of do like we cost These in the to out. specific on productivity where -- to unparalleled mix is wafer competitive. the Well, about that's QSM, applications And the terms applications it Company believe more do the In tool I strata for going productivity messaging our like best-in-class the both, and I'm areas of delivering focus ON-ON

concerned take on track it, critical not for that it think record overly say stemmed; in our can productivity do Some critical and development the application we to is to I first of area an for the were in of as ensure us think we've well, us applications; will come and applications some to I can when we had some know-how and the we to of offer many capability it our equipment so both, have coming demonstrates and be go now will and to room securing from we definitely pay it company somewhat inside have semi-critical. do but focus though I'm -- you strategy we the to we continue may challenges if of years I process etch needed have the it's say

Krish Sankar

to really look it, given it or maybe the more that's quarter; looks rate a then changed, If your expect at should week XXX flexing OpEx headcount, it extra so I'm about in on looks hasn't the it I it helpful follow-up like million OpEx was weekly takeout on basis. $XX weekly an OpEx a wondering Tim. to normalize But a for guys try Doug. like March and downside it's going you COGS just we side Got forward? did the basis run And on that a had

Doug Bettinger

I years, prospectively half mean think, things best or to the what And give in every What absolutely are where you're and said I'm an like Yes, you it that quarter the it June our you to question the guidance quarter. we something I we first, not happened Krish, years. occurs in earlier XX-week June. you have first I tell to I'll is that minus is that six the just unique of the plus was beyond. year you six will some don't know going is December precisely, the give in be got best and I response September right,

I in things In half year program, the away for year. compensation have in taxes OINE. the deferred see if come that that some offset the spending moves permutations you first again, like payroll but that. go drive you of elective was that anticipate that don't get significantly market also happens We later up the will in

and action the perfectly why projects will quarter-by-quarter with it's guide of action workforce goes single it's and to that it's honestly not the We're on it say every comes programs we're And go. why that's to conscious goods D did. just some spending. in we not of direct and So that workforce our based quite and in sold, there then Krish conscious wasn't last profitability wanting undertook that quarter, we maintain be of spending dynamic linear, we'll you and of same and as R& lumpiness we the schedules that cost it's thing obviously is, Company, the part was profitability, I'd of the

So around. there is things lots of moving

Operator

We'll Harlan now JPMorgan. take Sur a from with question

Harlan Sur

impact job We're obviously be going of opportunity a cost overall focus of the you there but Nice applications. afternoon. tool reliability, execution. customers. The to here significant wafer on your as tend attributes lot mentioned a lot footprint the where and see layer all for like have market on win doesn't focus productivity, quarterly this team can a to Good the on here whole on to appears semi-critical

applications? share have capture you of guys set XXXX your share the this in of winning targets gain is due much model that forth semi-critical how to So,

Doug Bettinger

Tim as it time I productive a when it cheapest, Tim mean I innovate talked think Harlan say challenge, piece technology doesn't, necessarily it is, you We it and haven't is. obviously, most the And productivity it with is know innovate right? is quantified right. the architectures a a platform certainly you The productivity, of You about is, all doesn't in about. hear the certainly piece of but what

which nice what business aspiring You profitability can we're is do. to at win

Tim Archer

Yes, it's a great question.

so performance even things differentiation when like drive it, critical you isn't working on on I completely in artificial ways to need mean attributes. improving for semi-critical, different you're you're of where element this Some many

lower was a you just part, the well. I lot NAND and of has especially basically on matured a in think out think we actually maybe now meant natural a the I increased we throughput how I ago, matured years if technology to of our NAND, I critical. as evolved a boundaries couple through the of a it's NAND can focus produce enablement technical make of way the reduction cost drive customers maybe go applications as space ones we can more XD looked push it therefore XD more elasticity. And mean there our XD lot -- and in also which figure that it's and for back volume, mean, cost

without mean said idea it's of a out a R the requires technology I winner. bring So time that's replace the ours solution, unique The cost Corvus not cost a -- technology for and competed tool it's a up to problem and the And back the human announcement; something easy of problem. of architectural it I a space see things Etch focus it's applications Kiyo long but for mean that may sound in every deposition I can organization the Doug's technology think it's types drive that solution differentiation hardware of we you why that's to technology and new; intervention, many now about example own semi-critical and that's a solution, point like just productivity, a that I cost. of a QSM, almost the the specifically it's productivity first of our on want focused tool have plans

Harlan Sur

now capacity in limiting on market your (ph) these the the of and they go-forward you inventory expect so your to potential a any activity profitability wondering even free then fab mean, base started does services to business as my by and Memory that or wafer recently insights are customer focus they more for to on not continue business as building impact a And now cutting can customers starts. flow, whether cash I by see actions or utilization on there. your idealing cutting installed off you Thanks if supply of drive and follow-up, then comment on CapEx, part basis?

Doug Bettinger

little profits we for deliver the business. base. see think a bit. levels spares of still the Independent -- that record of Yes, in going will often part that, of Honestly, installed as reduce still with well, nice revenue consumption fab the of a are utilization and if growth well you comes a here to We consumption down utilization; I spare bit not often know, our Harlan. maybe so correlated is parts

So great Tim, what's anything? about feeling on. yes, going still we're

Tim Archer

no. No,

them etcetera. you in I through improve point face just elements that lost; us a customers little productivity so comment it's to the The installed there made. in to I of we're I'd think like why looking I base dependence this obviously years deliver work is back some this things be maybe installed shouldn't tools and you think you of I comment installed a utilization and which on also services, consumables telling their we'll business like utilization commenting and year are record to bit the getting the what the made those was help But on, business balance of and a that's to was upgrades even of between two portion spares Doug base. our in

Operator

We'll a take now question [ph] with Westin KeyBanc. from

Unidentified Analyst

trajectory base installed that have until shipments your target to more revenue wanted the and installed slowdown does on next come year; does if impact risk? it growth I'm actually follow-up significant put model XXXX business. that at year I you that base a importantly, wondering this

Tim Archer

No, to business. we relative where we're this to still to drivers in be tracking want growth the

base good the be a if right, we're business You're lag growth here. there but installed where will feel slows growth we're the the chambers of effect headed of really to still about

Unidentified Analyst

wondering as CapEx helpful. year the that's you And recover? the and is typical could help next the I'm who accelerate to be would a self-maintenance growth interesting. about really Memory revenue as that something customer that follow-up, begins that's Okay, sounds talk chamber, you

Doug Bettinger

in obviously to does arps all -- it applications; that allows that's to it wanting I minimal focused you're to opening mean the here Memory where not replaced was Well think into it again, a us to what very will production apply places I is, human more intervention. etch and (ph). Yes, could to what manage we're have we just application with sensitive by doing. it's it high-volume be interrupt first application, really tool

represents for for If a so recovers. guess opportunity share target And gain it's spending out when it's therefore proving it better a and could us, as now right sure high-volume successful position any I application then it. be

Unidentified Analyst

right, helpful. that's All

will the to be clarify, revenue next growth? think product generate there marketplace Just in year helping you so a

Tim Archer

Yes.

Doug Bettinger

the in Westin, now. right market it's

Tim Archer

was Yes, high-volume whether manufacturing. that it manufacturing the manufacturing is right now announcement and in

Operator

with We'll next Steves from take our RBC. Mitchell question

Mitchell Steves

remarks didn't bit one, during then stated comment but on you little First prepared you more saw your guys NAND. softening that you a have a DRAM; in

is So I my or of in price reason assumption high lines, is bad a make? think I guess maybe bottoms DRAM to that between mostly NAND is

Tim Archer

I our mean, it's is unchanged. just for read be outlook it NAND

Mitchell Steves

what terms it. of the been And the China a secondly right between growth tariffs. got in Okay, lot has of then in the of been And has now. obviously demand impact terms

kind (inaudible) of impact So the U.S.? quantify tariffs the of

Tim Archer

Well, if this you mean able what financials and our included the then we specifically at impact Lam minimal the -- of we've the results close have to tariffs said on reported I are have point our to that that been of part they and say been would is and their point. they very mitigate that impact guidance in

Doug Bettinger

to now. right have from on us anything gotten material seeing Mitch. How impact mitigate what It's might occurred you're

Operator

Merrill from to Vivek Lynch. America go We'll Bank from a question Arya of now

Vivek Arya

how quarter wondering the versus what I'm have for is Tim, now and half ago. thought the visibility outlook second

they but are of the second is expecting situation about that half better. We heard have customers optimism the Memory much getting not some some from inventory the

you're will how wondering shipping changed you demand? last and in as Has the looking at the on do that or dashboard your think be just look you at visibility you I'm point what so? at what's second view quarter So half

Tim Archer

question. it's great Yes, a

long-term been playing said the on is we below delivering is and we at, is both no that recovery we delivered we're as have growth with call on constant and much cheese in we this in exit with our a meaningful pretty out demand which do DRAM in the where year. -- customers. through spending Memory call stated And mean last look The I meaningfully mean, this We today NAND. supply are year I there we message contact

I'd is year in exit much XXXX resolved a a playing said still we're we for kind gets of it are have reiterating that And then in outlook are how see what way. stronger we in and out said supply of that a that in and at we balance demand that's guess we issues say looking nature the we I That's so and just away year up the it. XXXX. January. And inventory set

Doug Bettinger

a Operator we'll one for heads-up this you call. Yes, have give more just we time one a follow-up. after

Vivek Arya

businesses. on don't you're services what's business very know So answered sensitivity before. seeing what the quickly, to I whether you it those of But the

down historically year the next think our mean installed positive or conceptually it year positive to will historically consumables a year? growth next you mean see does that do base still consummately services year you So enough have go and in to

Doug Bettinger

year look next the We base and this that for it this we is when year see will a at we grow too. growth installed business

Operator

We'll take Mehdi a (ph) SIG. question Hosseini from with

Unidentified Analyst

which and I image you what When good have have questions just about that one pocket? include follow-up. you talk advanced others, quick if does packaging All in Foundry, asked. sensors? Logic the and and not And that does put

Doug Bettinger

Yes, out. Other rightly as Logic you pointed for Mehdi it's us and

else. goes, Logic image plus where goes, it's everything where advanced packaging So that's sensors yes, that's

Unidentified Analyst

to image and advanced better-than-expected Logic slight about that packaging talk you When include upside a and would sensors? Foundry,

Doug Bettinger

driving That's that and etch the we're not seeing, spending leading what's stuff. it's upside more

Operator

conclude this any does Correia additional for Tina session. will today's conference time At the or closing back to turn I That Ms. question-and-answer remarks.

Tina Correia

Thank for today. you all joining us

Operator

This concludes today's participation. call. Thank your you for

may You disconnect. now

Lam Research (LRCX) 25 Apr 192019 Q3 Earnings call transcript