LRCX - Earnings call 1 2024 | Lam Research Corporation

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Operator

Good day, and welcome to the Lam Research September 2023 Financial Conference Call.

[Operator Instructions]

Please note today's conference is being recorded. I would now like to turn the conference over to Tina Correia, Corporate Vice President, Chief Accounting Officer and Investor Relations. Please go ahead.

Christina Correia

afternoon, good and you, everyone. Thank Lam Welcome earnings call. quarterly to the conference Research Archer, today Chief Vice and me are President Bettinger, President Officer. Financial With Tim Chief Executive Doug and and Executive Officer;

review found our slides after call, little today's the and our release for our quarter was we detailing p.m. September share the outlook Time December this section a our The the During The overview with for press be results financial release today's the will results business afternoon. website, can on environment, also of Pacific XXXX XX:XX and on Relations that the we'll Investor along XXXX financial distributed call. company's the accompany presentation quarter.

risks our be reflected unless between a disclosed non-GAAP accompanying discussion results the Today's risk on factors public found and SEC presentation the in the presentation non-GAAP accompanying of Q&A subject uncertainties slides reconciliation for forward-looking detailed and presented in slides A in include Please statements the filings. in basis, will see presentation. that information. financial GAAP can in specified. be additional to financial our results Today's and are otherwise

scheduled call afternoon And Time. p.m. until last replay of I'll hand later A that, with to this This XX:XX on over is will call Tim. available to made website. be Pacific this our call the

Timothy Archer

everyone. and welcome, Thanks, Tina,

guidance the gross And share end for quarter. came the range. the margin, Revenues results per and solid September second a margin earnings the the all for guidance. produced quarter high row, of operating Lam our of in above exceeded in midpoint our

continued calendar execution December expected per year quarter, in to a Our demonstrating improve further share soft earnings in are revenue XXXX. cyclically the strong our and

China. for adjustment as on markets, on WFE billion equipment our change environment. in based the calendar It is mid-$XX assumptions fab The the year. our updated in for wafer spending restricted to $XX Lam non-Lam-related as checks from in well prior does Turning of billion not range. revenues year view see spending We the XXXX fabrication on

weakness spending further the path NAND drive side, segment adjusted a continued device down as and the balance. supply-demand customers quarter in to On lowered utilizations faster to levels

WFE NAND impact. content. recently single to pricing indicated certain demand and high have NAND high have starting growth XXXX, to trends down are greater demonstrating are elasticity actions supply has unit positive increased While Customers as have is year-over-year and that a digits in stabilized significantly per teens consumer markets bit demand percent from

as in and upside China is modestly due the to baseline prior related memory up demand as non-China-based both in spending prior node high-bandwidth better mature leading DRAM edge relative well from our further our slightly versus trends investments. foundry/logic is driven weakness domestic down segment view, by to Meanwhile, customers.

opportunity WFE upgrades. Longer in it and fab demand structural improves, equipment fundamental close Lam's per starts. of of story and and a deposition and integration schemes. back-end-of-line for we delivery traditional spares, innovative we higher is power customers use challenges, device device incremental is recovery, an wafer billion good installed of Backside Lam term, early to good of expected XXX,XXX critical forward, example is to to is benefits from Lam enabling of are cyclical believe underpinned power business demand. timing role our Etch expect utilization limitations position the being investments pace services architecture to fact address in it strong is driving delivery for that by emerging a memory remains SAM call current to semiconductor continue cyclical scaling lows, recover deposition enablers to and and transition to more in drivers technical begin scaling. add from performance, emerging When benefit this Looking address developed To hard but the a both play backside vertical base architectures. growth to is scalable increased for the as cases as monthly new etch and identify $X see

space wiring area increasingly at back while Today, end the compete up in level. considerable line taking of for also complex the power interconnects transistor

Additionally, managing is up way the power resistance. and signal delivery minimize to the to external separation architecture A challenging increasingly loss. power due between and and backside power estate power loss real for path source valuable the the delivery enables transistors free of

to thicker metal are schemes. customers integrate advanced the Furthermore, with changes, including order efficiently power backside layers implementing of packaging use in their

Lam. the deposition capabilities in throughput quickly and of products etch our have of strength copper address and deposition Due power and we to needed been processes, New are existing capabilities able requirements electroplating trends productivity our applications. for back-end backside to favorable to the are the and PVD extend

We of positions record a tool now foundry these continue positions grow. customer at have to expect logic leading to and

end year, the closing approach base As the in we chambers. of our installed XX,XXX on is

deliver our to opportunities productivity yield support is group complex, customer manufacturing seeing semiconductor becoming enhancement. As business increasingly innovation, and is more

the of emission are data of time multiple in intelligence optical tools. September first capabilities manufacturing spectra delivering OES due with spectroscopy, expanded are fleet intelligence to at and collecting interpreting across plasma application high-resolution include big we OES. of In or our equipment the large and we a over the to complexity quarter, highly offering equipment differentiated customers The

production equipment team customer. and that Our complex would and customers a with maintenance Recently, issues improved Cobots otherwise undetected. precision a execute to robot, into tasks maintenance leading industry's performance cobot, CSBG our remain performance solution the put leading availability. also fab collaborative and reliability, higher resolve helped matching or to allows first tool-to-tool

a as as cobots of more see vectors shortages expands for manufacturing believe regionalized. Overall, we role for labor ahead Lam. and semiconductor we tremendous semiconductor skilled important the anticipated and new in an addressing becomes play growth industry can service offering Also,

the committed as in our are inflections industry grow. of investments has we the and, deposition making etch multiple greater position record Scaling driving and to Lam and XD strategic for challenges and and markets to strong the intensity. to needed complexity architectures, track a outperform company execution, turn, are

last and Asia chain better our warehousing Over scale groundwork in the been order customers greater in to the years, X with expansion region. laying manufacturing, serve that we've capabilities efficiency supply for the and our of in

We are applications. and to inflection-driven R&D also to differentiation portfolio extend our capture technology new our expand efforts our increasing product

environment the secular While business to the play we by remains industry the opportunities see of trends we current excited challenging, and company. are extremely strengths, ahead for well breadth land

over turn and you, to it Thank now Doug. I'll

Douglas Bettinger

thank the Excellent. you afternoon, Tim. everyone, Thank today. and joining call you, for Good

We delivered XXXX results quarter. September the strong in

We're company's margin, year execution above all of by share amounts. unprecedented WFE where earnings investment and during with Our in the revenue has operating midpoint exceeded our pleased memory came the income a guided high per end gross guidance. range in of declined the

the the a at X% September quarter was which XX% look year financial was up Revenue quarter down results. September our the Let's for $X.XX ago. from than prior from quarter billion, details of more and

billion, to advanced balance was end was revenue of $X.XX to $XXX at recognized revenue tied decrease deferred quarter approximately payments. the Our customer mainly from which million a quarter related June

We deferred revenue versus have historic continue a payments. to levels balance higher advanced given these

December calendar to is our the will We these revenue expect believe quarter to XXXX, more the Within year trend recognize deposits, revenue which for balance deferred a I guidance. comprehended levels. in of normalized portion in

prior segment by was the quarter in memory at growth Let's systems of X% revenue quarter quarter. segments. sequentially of perspective, saw was a From driven systems increased DRAM, the now in revenue is The in coming memory which XX% compared we look level at segment XX%, from an September which the XX%. the in with June increase that

revenue, in dollar historic nonvolatile in prior we was last spending quarters, we've segment have lows since levels seen was which the the quarter, saw September at at of from spending memory not we As systems XX% XXXX technology. quarter. XX% planar is are levels the NAND These down NAND predominant for the noted and in that represented

our is The to the quarter mainly of systems percentage revenue well from power concentration including September and Foundry segment revenue of devices. Logic customers. quarter the the specialty XX% mature The quarter, And analog the year with during segment in quarter was in the within We heavily in in investments June with which this areas, timing of systems XX% this calendar prior spending in Investments represented segment level. XX%. decrease segment year, lower focused the leading-edge and performed than of flat Other our this sensors, were finally, XXXX. device node related coming was the

was December our XX% composition discuss from revenue. another The quarter this China China customers, the of we came at in of in the revenue have a the the in high total strong quarter from regional concentration will Chinese now currently profile and geographic low. expect domestic The China quarter. up I'll region of XX%, majority is prior we watermark

XX% the XX% of September geographic June. compares largest the next with in that that concentration, region Our quarter revenue we Korea had and in saw [indiscernible]

and Memory the approximately industry. of Our that are $X.X September Group calendar revenue September fabs to outstanding lower very in down from inventory low upgrading more in generated June quarter digestion the totaling billion, was and XXXX. which utilization Customer off rates quarter operate customers customers than XX% holding X% the year and at Business Support until continue tools quarter, their there's is the on the

we product year-over-year as components be been year X has XXXX. CSBG. largest close a line year this we and to the spot technology business specialty continues see part The Reliant of and bright Spares market up our calendar the that of

XX.X%, at gross our the margin me range above than performance. June and The Let September the guided of to quarter came in now higher quarter XX.X%. level turn

primarily performance approximately Our calendar from plan the gross by XXXX. elements quarter quarter percentage to of mix. the We've structure as with are strong level our driven gross track by our prior cost exit on to was point during improved customer the year March we and compared year margin favorable X improve margin

quarter, in percentage came at higher amount spending. our on was and $XXX key inflections versus from spending operating our at as million. technology The XX% quarter of increased prior million, quarter in of the R&D focused customers. coming a with engagements September $XXX June of investment up was over development expenses the somewhat

market programs We will strategic segments invest for multiple support long-term continued in objectives to company our to continue across outperformance.

higher XXX because our strong June quarter and margin points basis of over current level Operating XX.X% quarter was end performance. more margin for guidance than of gross the XX.X% the that the high than of

was rate with for line tax our in expectations. quarter XX.X%, the Non-GAAP

income that favorable volatility market-related will quarter-by-quarter. a in the low December million the quarter September the compared came for as to for calendar at income to be Other mid-teens our cause fluctuation to The expense with subject generating the year will was be quarter. income expense to due in million rate factors, well in $X rates, estimate Our including to the on is for cash in $X of fluctuations continue level of June XXXX for range. in interest rising OI&E quarter in OI&E and some balance. tax as XXXX variety

Let the in that pave we me things. $XXX announced $XXX market share dividends to XX% a September, the growth in plan million dividend allocated disciplined deliver in side our to of and capital approximately I'll open in now repurchases in September return with annual dividend, line our growth. paid We highlight million quarter.

amount now share repurchase plan. $X.X paying have we first the returned dividend cash raised we in free and XXXX, billion the remaining XXX% our on flow Since have of in dividend We Board-authorized over quarter Xx. our

our Diluted shares, down Calendar we've guided expectations the XXX our share of of XX% quarter million over range. the with shareholders. was free June cash from September quarter. year-to-date, share per track was flow and high diluted to end $X.XX earnings count on returned our

Let the me pivot to sheet. balance

company quarter at outstanding, our the sheet. well by we also Bay the obviously $XXX totaled as that day retiring the the billion for cash days quarter, Area, in I The just investments California that mentioned, end which The from June of down [indiscernible] XX was factory saw of the the activity. short-term return on improvement and somewhat September $X.X in purchased XX main the days September sales the were driver billion headquarters quarter. balance we $X.X leases buildings cash in in million, approximately our down were the offset was quarter. decrease capital cash June as our from at Our

quarter prior level Inventory X.Xx. turns were of the flat with

to quarter, expect to we our we've than noted But done continue at prior the occur bring we've pace in in We inventory past. work to as down. a this slower

September was approximately Our depreciation $XX compensation, the June noncash Capital came for million at $XX the amortization. $XX quarter in expenditures September which million in million, with $XX expenses included in quarter equity for quarter. flat for million and the

prior lab full-time ended and September in We Spending a development the the States and on centered quarter. was quarter United decrease primarily was activities, the product expansions employees, approximately XXX with from which September of XX,XXX Asia. people in regular

we actions of timing Most year decrease to the headcount of reduction restructuring in the related September earlier occurring quarter. took is with the in this the calendar the

This revenue to percentage quarter. XX%, $XXX turn our minus We're billion, plus me Gross XXXX of million. the for or of December XX.X%, reflects customer Let favorable albeit point. plus of expecting percentage minus margin gross margin as September. $X.X level guidance minus or continued non-GAAP favorable mix, Operating margin now X a X saw point. we as not plus of quite in or

guidance in that plus I'd embedded occurs share years. a of share earnings per of be week the in XXX to XX-week based due R&D. an few every a increased count quarter The minus as from March. be higher going shares. on fiscal just And It's quarter, which $X, approximately quarter September finally, to this million or includes in level mention growth operating June expenses extra also XXXX will it in the the $X.XX

in solid develop December inflections. and With our customers results and to technology our see leadership guidance, industry is for the revenue strong quarter we as performance financial profitability. both Lam next we delivering solutions

wrap before mention to I I'd about think business just And X up, XXXX. as like into modeling our things you

The the This at headwinds next create level continue for we're same into margin. that may currently may experiencing favorable near-term gross that first customer not is mix year. going

technology Second, evolution metallization other of see. changing structures resist, R&D all that dry in and to all take year packaging, schemes future opportunities the DRAM, continued spending an long-term given we we advantage see these of like XXXX collections data advanced be may opportunities growth like around, XD

pause. temporary leverage As takes we've a it's delivered possible that a historic result,

aggressively remain the questions. We to objectives up operational and will prepared drive our I now continue our efficiencies like remarks. call always and longer-term unchanged. have, Operator, the that that profitability concludes to for we would open obviously Tim

Operator

Instructions] [Operator

today's from And Timothy UBS. comes question Arcuri with first

Timothy Arcuri

strong could remain sorry, back first half sounds puts close you going in had about I you're a not huge if it running are the that? you it's year. about had if to But takes. to terms -- December. second just maybe you it bit XX% it's high Doug, the off think where but of like a China. pretty It half ask 'XX. like worried half into the come Obviously, sounds think it question in to in worry, sounds on China. little a you you've mix. like remain a take the that of What sort it they're Can and talk during the XXs, probably the I of of I running actually in back they're because WFE, the of going

if So I'm that wondering can sustain.

Timothy Archer

and Yes, then that, Tim, start add. me let I'll let on Doug

think that not when also strong of that such the customers has we high a is Part our it with that think story I mix right do China investment. why particular, now we in Clearly, fact of and percentage about NAND a extreme all other it's we've as messaged. the spending. has and And know to lows. been mix memory

give to early As to us that. for not do WFE, next a year, into it's and we XXXX we're too going bit look so

regionalization move nodes. for investing you this see in mature long-term about demand think overall longer-term China that towards We and people

years. so first for And long investment second think or comment on do a term, there's manner will believe mature whether the several that going rather we next to it's year. half the that next we're But China the drive sustainable rolling sustainable half in nodes in demand of not in we

Douglas Bettinger

will the And it's quite perhaps away. market year, to up, parse China But they opportunities it's I we that the know, to going strong just little is but investing September. believe Tim, don't albeit strong. Tim away. investment for yes, a also not going And said as sideways continue as down, saw my bit. we in They're see. I said, as China comments in I alluded to, be next not if not

I at market think some extent. to mix the it's and China we're begins at a mitigate the hopeful recover the points, low that rest because certain to will of pretty point

Timothy Arcuri

etch about of about [indiscernible] into. can can Can now that, you that because this of in they there for, can't these It's Can versus, litho and talked view. them and restrictions you about set you talk that X-nanometer but when depth depth restrictions? makes peer are pattern your just also, new to you're as say, And buy what's XX-nanometer talking where just then the but let's talk technically, can commonality morning terms use a in talk handful from of about a tools a can for predominantly it. say, tool that? sort let's point do being major the just XX-nanometer of you It's you with not we thing, you also X-nanometer etch efficient, ship fabs

Timothy Archer

guess the to the our what early I our reviewed any don't we've of material say and see Tim, assessment I'd Yes, forecasted business. regulations is is we details impact

Now your to some into already to X strict quite to we're for been other I of adhere tools has about ship mean we obviously with technology can we that to that node think regulation. the And purchased restricted we've another. we've into something what very already US point that's fact regulations I relative to the that do to China follow and engagement. have being used

sure So what something know it's something I compliant. saying, we that common as fully make that but as don't that, be might that we're quite you're that's

Operator

Harlan And question with Sur comes our today next JPMorgan. from

Harlan Sur

as declines mentioned, driven by X% it the the I down X the X% did first sequentially. of months to decline out. year-over-year as continued you sequential customers, your CSPG, especially On your customers, pointed year, assume you by decline, utilization was NAND

the It this year, sort steadily for to of bit improving of seems stabilization. improving talk supply-demand the second did in be environment. of You sort reflective these customers shipments pricing about half of

Have across least your levels? bottomed stabilize memory current started believe does So team logic have and customers? at at the to utilizations they that foundry

Timothy Archer

our what that, out bring think, demand to, those I some start are start There's fab business. talking in and some said clearly time pricing was bit before lag the about were see utilization they back obviously, Harlan, that that their when from we comments customers online. improvement to Yes, they in of

Our installed also One how levels that's offline to that we said, technology to CSPG fab is you're need couple business, really when NAND taken been seen at a things. spending, there's and capacity spares. But by the quite affected in delay to been affected in as don't clearly, And trying add of the utilizations in significant a really are space. you conserve your own has much is of haven't base. we terms bits upgrades

-- upgrading You offline, this that you're have tools those at not really them point.

technology the back And to that hit start our that improve, customers in that seems anticipate because of and that as scale which done to in next business efficiency come is for leg to think next to starts has we also so indicators component. of CSBG able growth, are their on be upgrades what upgrades going to business would the node will the leading be to be manufacturing. to, would spares of own terms playing the want of We memory technology

yet, are seeing the we're it that not signs So come. that but will leading

Harlan Sur

call, this earnings you the you've got chip about then talked position architectures, but on And stack last a in packaging. advanced strong

potentially share, where as HPM, year right, to have began business. segment to this for X X. You HPM strong Lam per the being $X past specifically, about with billion guys very have X to talked which you million $XXX On

$X doubling DRAM generation $XX hype the every of a point. at from growing I new chip, to TS there's also HPM, fees stock like like some of per think that is

packaging DRAM Is the next So guys tailwind how strong you your as DRAM is is HBM industry for you HPM/advanced growth seeing Do driving it are this a overall of some also guys of are for anticipate XX% wafer about that starts. your very business customers of all year well? and sort talking strong team.

Timothy Archer

generally talk But to them generally needs with, mean equipment that much trying We'll I it you equipment more business. said, is how it let and from affects about leads which ours, to what their drive we're needs. just affects more sophisticated think I performance everything aligned

a do see from seen in I about we that already talked so it. business uptick we've our the And

strong an demand. area undersupplied, be that now and This right is still appears we're to seeing

I so HBM industry you business next now that strongly don't AI interest hear the in the anticipate, And pretty broadly in year. given that our right wouldn't so grow

$X you in million. over years. which couple we packaging, could revenues our be advanced a I think overall next said our this hundred sometime a mentioned billion next basically we -- in of actually characterize that the market the that To mean, exceeded

growing so part quite it our in we And a rapidly business one which of is have and high share.

Operator

today comes question Citi. with from our And Malik Atif next

Atif Malik

Tim, where Lam you're maybe January, equipment on up a my was about And first softer the question peer profile XXXX. seeing positive your picking lion. don't and half spending. and know in talking guys then first is similar curious but half you until I out a guide WFE is if like a things more like a into first

Timothy Archer

Like a Lam, lion. a likely

it that back at think would my think I to without what point, and we -- say reasonable will cautiously. XXXX this I it's spending is think that guiding I comments come prior

think may of of though condition leading And markets, be sustainability in want significant going our people so seeing of we spending. to indicators before start I that see even see we to some the to some

[ demand time if that towards were frame. out think I you lot to fabs of that lot mean, and through ] It's XXXX. in not a I the opening, So general you that as a that of ramp believe move 'XX that would feeling probably we to is -- unreasonable is think a

Atif Malik

that gross guys of about. talking talked sequentially on structural been gross you mix improvement you guiding about year? you have Doug, of walk the you are but in margins, And us that because still we innings this through down are the terms growth, the Can which margin to year-over-year

Douglas Bettinger

Yes.

continue that we from we the during that undertaking a confident to year. year. that's spot at we're exit the margin, we efficiencies basis view XX% to If I'm in as March and super be would improvement able absolutely we'll articulated already and frankly, take drive you good the point gross XXX we be that to that about were And in a back operational talking happened, a we're in the this roughly call, yourself when

Operator

Our Sankar today TD with from comes next question Cowen. Krish

Sreekrishnan Sankarnarayanan

of them. X had I

Doug to First $X one, said past, either Tim, you guys restriction a a like impact Is revenue. the don't export on in quantified it if I way know or billion was [indiscernible] ALE I to you your to incremental or the export that the noticed in quantify it, impact value? and was a dollar restrictions, new then have follow-up. quantify 'XX And where I added the with calendar

Douglas Bettinger

billion. Chris. There you're material clarified, what Yes, came I really incrementally was We got it $X out guess clarification. we $X.X still yesterday, in this year see We When could So nothing ship a into to nothing little really bit. said year, what billion. $X We billion we to and was of incremental took yesterday. it That's right? the right. down kind was we came

Timothy Archer

those for that, of Krish, were already might the below of the already have types limits out, or were been called cases, specific The many technology technologies that that that the is is tools tools they used while now to allowed. reason were produce now in were that the

in our that statement. had So recognized initial already we

Sreekrishnan Sankarnarayanan

helpful. figure out how probably side? throughput, that. have impact? dialectric selling versus And question cryo etch etch my Got time, market-share-wise, to the doe a you trying handicap to not very negative to NAND product. it. it. And whole I'm kind where to with etch, the just of just this you are it's a etch respect too, but us Because similar dielectric etch an like update dielectric is on That's and Can having tell then on from announcing give last ask Got understanding for cryo follow-up the cryo like the is any a applications. etch

Timothy Archer

there's think from has call, I aspect we've mean no the that etching before. fact a on or leader ratio standard conditions, I point already is doubt. condition. the mean did lot I that very what the last also made Lam Yes. been is cryo while said out high a etch in And change this without of I Lam cold

you to already a extent, any throughput, that and about as those are commentary. And our into business about we talked our talk many factored certain impact so

has in always will goes general, that memory driving us. outlook in our not NAND talk and our I new So projected that's node into think technology it's focus that at that always growth we about. been productivity something and And in to every be general,

Operator

Stanley. of our And Joe comes Moore from next Morgan question today

Joseph Moore

I technology talk help Can wonder What qualitatively improvement? quarter. How in you could coming China? is Are of us if much kind just uptick that understand thing. of you from kind Just you that the the are how seeing that of about of that a saw you that's advanced spending? packaging? you that seeing of much resumption kind of driving is from DRAM

Douglas Bettinger

sooner, an question guess, would mean point Yes, it. to, it part what hey, was Joe, customers [indiscernible] There all I not let Tim I'll it's of memory. it's we a but Yes, of China add. getting I in. a it, and was hide-bandwidth want can earlier about, we where pulled ship. have I

there. DDRX got You've a out transition are that from DDRX to with these new CPUs

little that of bright a also So bit a spot. is

to point both part things in what I'd DRAM. I of we those as of So saw guess

Timothy Archer

wafer pretty of the a mean, probably of to some right have that's to be and before, ultimately phases see will equipment I this of think as transition driver that buy higher I therefore, said demand which as starting sizes, outs and No, well. it. also we've Yes. now much initial you of

Joseph Moore

you in somewhat Tim, then just be talked kind And Great. etch had phenomenon? I Can is there Or quarter you your X weaker of is remarks, more that something mature upfront about of a there trailing a that node -- outside China. trend? think could of

Timothy Archer

digestion mean, more get seen natural quarters, investment have you tools growing, mature -- whether demand you through these our somewhat there, output capacity I demand is phases started back high certain for think in Well, that's figure as looking just and obviously, fabs nodes. And out that into very more spend more we're have looked really cycle on think rates we're meet eventually, since demand I long-term and goes guiding going as And up, general. makes to we've sort what companies not demand, and don't I in believe of industry which somewhat right capacity in segments, at those it's I put mean, then you our it's is And I semiconductors come where what bring we those lumpy. long-term future in well. and now. requires if to

Operator

today And comes from Toshiya Hari question with our next Goldman Sachs.

Toshiya Hari

weakness? I guys had bigger today? this, point Tim, trailing can I to question types a I driving the you can any apologize question follow-up that's for if device end us this to you but you how is missed And etch. non-China remind markets near-term or on market, smaller any Joe's And

Douglas Bettinger

investing look Tim you let Toshi, at as I'll then multiple etch mean, nodes. like I it take at of example. and It's this, set it's the when on. [indiscernible] foundry customers across specialty an a customers broad

so can't X what's one comes customers. any because for of to Toshi, really just I that one something of isn't And in types, a or This in long-term in kind happening near-term in these away as and set but investments segment quarter inventory another And is point it broad you. of the these another, know think quite all lot the of out frankly, marketplace. device right? then are I well, But there's goes there we any just or

Timothy Archer

It's the chip acceptably market world. to be an government would think And from have a to Toshi, I type Yes. by impacted number different a around little forecast this is to think support is the of area standpoint. a the harder that the part I stack add of activities sort to I the we're going only is going thing of that also

so you and in demand to regions may capabilities. being investing. up that see that's to moment point they're the may their able be not to the supply, We greater than certain why And try build as

types what sensors, said, et et over these this image long-term and Doug demand applications build-out of types and As time. a devices much automotive is these bigger IoT think various CMOS over all in is for of sees I cetera, everybody cetera, about

Toshiya Hari

it. the Got And my color. I appreciate X as Doug, the XXXX for model. follow-up, on then

You and some experiencing mix guys gross normalizing margin. in about potentially talked you headwinds

potentially a year perspective. You also an R&D being talked spending growth 'XX from about

perspective, starting given that gross good guess the margins, guess China Or of? I of kind we working should is how you in still on So I a spending off helpful. rate our QX kind be versus Is guess, high where be the and low be point? leverage is that baseline answer what's that 'XX relative history I R&D an then and super can to of from hold would could quantify hand if

Douglas Bettinger

Toshi, not bit baseline color, normalize. next back we're we to give from little which gross things right, to maybe where to Yes, was favorable quarter, think for but margin. relative at it still of June an an going points, for a data I'm of way unreasonable to guide a a customer of from mix All you year. lot of margin That's level start I'll Maybe couple China to mix. before I this go is of a gross saw the think not good elevated

I anyway, don't helpful. So that's if know

from some know of technology I frankly, R&D we about the of We'll I'd color around. many from described sometimes. around well. that revenue to give do high of bandwidth, I look then be don't is I what right? right don't years know inflections we'll Tim our things so there's independent top quite we, you next say, be do quite power. enormous next back number an follow talked now what There's now, we to play of yet. is what backside that if But level R&D, all X, and guess standpoint. I X be. don't going invest quarter. I cadence the an why And WFE year opportunities see a to has strength didn't know these going we line what to

going September, the compared is of quarter more independent XX-week at in March that you fact December invest So R&D look to quarter. we're spending a I the think and quarter to if up, the

we be. a bit you maybe out as turns revenue And R&D little grow independent we're got of then into to go what year, comprehend So to next to going that.

I set that's again, a And think and think term. the that going to Toshiya. helps, guess nice see of know a leverage you about opportunities the I maybe is if what think little to at about to little win going when would we in longer business want to model. I'm in I to the you to is played lot historically, flatten us It's we you've that seen bit, at come because a bit. to Lam, trying don't up like, how honestly, out grows it is, strength

Toshiya Hari

appreciate sense. makes I it color, Doug. Yes, the

Operator

America Bank of Securities. Our next Arya question with Vivek comes from today

Vivek Arya

and first to your between systems. business memory your the trying the recovery understand in For one, the I'm CSBG usual delta

when how recover? telling leading that memory system that been right you recover? conceptually you historically? it recovery? orders QX, what of system right what So what a can when CSPG And now telling is effective delta about QX, is it orders about like year, in And indicator memory is now your Like is of has QX, next

Timothy Archer

is first, our seen piece out downturn. continues more that installed that if since mean Yes. year fact a quite to lot a bigger. installed commentary point low. I true every -- this long mean get grows we've And base the get we've the is it's I'd because I is than to in last generally that we've up fact, had utilization ever been spares been that fab continues time prior One it's base bigger. of cyclical the XX% said the

all fact the and of things pretty and is spares time be these at sort unique. off so we've that X of And seen all upgrades

the We upgraded, are years spares upgrade it's is come of And I to and been have that the of certain that we'll little couple utilization happen. is to since come will fab now starts see hard predict back, thing It's portion technology that any back, have these X as this. back. of a will a and been anticipating think tools

to couple upgrades. think a offset, about away your in back about talking use really we'll that of what think capacity factors other about I frame you're quarters of customers' turn as on, investments terms demand. customers time tools I many long-term to hard the adds, you're of our start comment the typically, then is really -- seeing predict from depends because it's In technology it further when on And probably

I start view. So think low anticipate to year. We January upgrades one wait utilization and thing points things that spares give And we're at until beyond we'll we're I now. the like next improving very think to would that, better and is certain you a

Vivek Arya

strength sort that tease some clarification? kind Maybe And another to that came, in just of much follow-up, shipments your in is spill versus how half just believe, hoping my one-off, For from of how of clarification of to came potentially one-off I your they're I'm not over does question. would of rules? you right? also And sustainable 'XX. from were you that trying strength is I Part clarification how much China-related sustainable. Or China early saw strength apart rules. maybe those was much quantify from second

to way if to we you next of us about think just us give your China some how could guide in should So first half conceptually year.

Douglas Bettinger

new away. changing, regulations it's all our not the to going Collectively, doing away. roadmaps our to Yes, we year little the that next okay clarification rules front a that. tier, but to Having of up certain customers yesterday. that's was that so understood if from going know don't our quite node do communicate that we also, has not one the in horizons sideways what go said to. industry, is didn't China, to them. When next guide described talk China Vivek, change. commentary they an a The rules we're right? We going of not the on you been, multiyear was you So call I isn't on that came Nothing yet. have to far to saw in as But we ship now work understand just customer had

year China level They as we of and a see frankly, have I long-term in objectives. into So sustainability beyond. go next

Operator

Stacy Our Research. Rasgon next from question comes with Bernstein today

Stacy Rasgon

you talking that question, do driving about you something of else in first that. uptick my just on non-AM in WFE have you Are mind some you when talked Am your or markets I litho For about oversimplifying? statement? made

Douglas Bettinger

didn't complete were we two. and restricted those was It visibility fabs they primarily It's litho into these it's frankly. litho. Stacy, in doing, what have China that

Stacy Rasgon

it. Got

have visibility better now? You

Douglas Bettinger

do. we I but to try why exactly right, think That's what get of updated tell we never the you we think number. We we now. this it

Timothy Archer

our markets. some comes reporting really visibility companies on that their the the from of peer and business are Stacy, fact our

business. So whole of as give on try to the year we accurate Lam market, obviously, you we're but most goes the the a on, view

Stacy Rasgon

the it. business clear, Lam the said that for for forecast there's to you it. I forecast your be Got change whatever But no is. year, Got think to

Timothy Archer

That's right. well. that Because we understand WFE quite

Stacy Rasgon

Got it. Got it.

my I leverage to for go the want And next follow-up, back for year. to so question

So revenue, talking a the just I how see I that at level, go maybe just just pieces? -- Or put leverage, like Was revenue you're margins flattening is? do growing could different from think current the those out. OpEx, about actually think to year? probably whatever about year-over-year Or decline we on compression just OpEx with mean, statement least you margin like like like calendar think understand given you next table operating could we'll do that gross

Douglas Bettinger

We've that what point, the at we've somewhat Stacy, R&D. invest margin trying see has the got to of year. as to if in is referred fact yes, what next has revenue all you describe know next these revenue Lam know, look done mitigates decade, opportunities. that to we last, pretty what I'm we're going this likely customer That's I I be because over a sure And I mix more favorable grown. frankly. don't year, but to I'm expanded not At going

kind margin things, so X possible you for when And flattening off time. of to period think think about it's of those a about

objectives profit long-term Our are unchanged.

to So as that I well. do want point reiterate

Operator

comes with next James. Our Raymond from question Srini Pajjuri

Srinivas Pajjuri

line have you? I memory I might been guess, that kind what at from of to if XX% at have business do X just the a think the logic And has what think, growth your quarter. forward? years, do XX% is things you going XX% implications, top in And longer-term almost normalize ideal at Tim. any, close the look and when And bottom if you? think view, to last your the now couple was about And I term, I growing you a what questions, or moving curious, I your XX%. mix for how your I we're mix think guess of foundry so is, longer on for I'm this historically, rate.

Timothy Archer

Yes. a It's because It's question question. a good actual. to hard the answer

Our view everything. is want we of more

make not memory we're looking So the just mix to to in look our reduce better. position

day. hard try we every So

the and more to around Lam. Lam. decade, still think opportunity to there's X,XXX of decade, is there for in as opportunity to mean, over come end scale the the and NAND customers I a tremendous we position tremendous saying for a to DRAM XD that's fantastic layers, We going have next going memory,

several when afraid keep you because strengths. about talk the company, quarters, I the about so to are the of for suited well logic I'm not tried I've which on of which breadth many opportunity out talked lot huge the heard many well. fact So growing Doug just spending, that foundry you the but the the side. side last us logic all, side it's in ahead see And a have our mean, foundry -- But are as lay memory of will to that in of simply we opportunities

billion I mean dry you we just over the those, I And $X.X to years. that's develop. EUV mean, of of some opportunity said photoresist and X when When get kind recap towards technology foundry node number tail of expanding the primarily that. that's EUV a I mean, layers the logic growing with end that business. years, of That's at X that's every revenue after

ALD. $X opportunities talked about etch to We win Lam selective and all new tools gate billion incremental about introduces opportunity for around, and

for down grow. already not same seen logic opportunity in advanced some Lam's interposers. packaging. I foundry only chiplet AI expansion processing and that's to also what's mean the as using costs applications. of about the a you've ultimately with but entire in so this chiplet formation the -- panel these talked AI, to way invested happened us side We HBM And systems of of bring these now big of

well. finally, as that of estate a real new primarily and us, today, power about of how use and application of additional backside I a way you very creative wafer for then foundry about up And being is that's a as talked it opens lot logic new opportunities just the backside distribution

foundry And opportunity a And these so we're long next That's especially investing what several side. logic has we're about really, for. expand our Lam to a Lam each way on is go talking what billion-plus for is to the $X the years. of over SAM,

we're memory up strong positions. giving so But not that. our pretty about we're excited on And

Srinivas Pajjuri

have asked I appreciate HBM, technology on questions follow-up then of itself. And guess, my quick lot already. I A the been answer. that

But cycle are Just I et know about per die on the and wafer or versus the think HBM is think said size capital you there about DDR? intensity should of traditional I HBM. capital guess, per is intensity times to longer, How we way a mean, I Tim, cetera. bit? larger

Timothy Archer

our Well, that it bigger performance it's I it's it but don't does quantified device, higher know we've and -- think number, obviously capital. more die -- a I than -- it is that a takes much and is

really what like Lam performance-driven our HBM enable the in therefore, And a our get market, interesting tools plating though, or new tools silicon is application. it's to for etch added so the things and perspective, is many From or that that tools of TSV formation. that are copper

makes really what an that's transition company so And it better like even that for Lam. massive [indiscernible]

Operator

Brian question today Stifel. Chin with our comes And from next

Brian Chin

could policy. good licensing there concentration some that like did about companies? a between foreign I sounds I for the the U.S. China. the yet change in in seen this and in operate maybe December talking China a licensing in domiciled more positive shifting relaxed some quarter. note from its companies maybe fabs a it's there local be about remaining advanced requirements fairly have that you ago, It recent, foreign impact know So but week

Timothy Archer

very long certainty It's investment term benefit Yes. or think and whether that I important. comment of operate, is But pretty the multinationals, that -- being pretty China able relative to wherever recent. they from to make is

movement in about. So had the seen talked obviously, haven't we couple of we that any weeks, last

to allows installed people term, a right customer to willingness it customers upgrades certainties. invest. true about the decisions to the for forward about of and with where move think -- allows especially when upgrades think installed that And our sort is our it ultimately base you make with to I those them base and the long

Brian Chin

starts, wafer in just of spares companies about about asked lot kind memory 'XX? of newer your not are some wafer questions And revenue some is also efficiencies that capital improvements. thinking as spares growth sort the of some and reduction in or just wafer through capacity are but a helpful. emphasize utilization of as you utilization and they on through That's how they'll then have trajectory calendar been nodes realize of improvement, talking increasing that curious, impacts But service start loss How service maybe there. if

Timothy Archer

applications think recovery. about said I also for is business But X many business there's Well, those it brings of to -- we we demanding. another. as something moves longer become just we of the you're processes forward, upgrades more If there we've the more difficult the -- down. we're pace right, which to that CSBG said, happens see off intensive what are spares, technology our predict it's that But spares and before is of and part happened the because have that as trading utilization

business I going to that fully fabs. the operations in customers so we're parts just our say a as recover And of utilize those start would fab to and rise see equipment in both

Operator

question Our today Hosseini comes from next with ]. Mehdi [ SFG

Mehdi Hosseini

Yes.

or with back opportunities rate. follow-ups. those a a follow-up. power to Just I And it the migrate X are Or Should when Opportunities quick extension side have I materializing of X-nanometer. think of about more X-nanometer? X-nanometer we

Timothy Archer

Yes.

way maps the they've customers' and think probably future, put that's publicly, I road best go I bit timing at our look to the that out it's on in mean, a and what it. you said could I still think little

technology are packaging, you something strengths it they across deposition. all and and device, convinced backside you're XD the our -- solutions challenges about to and that I seeing in power, scaling, move is to that around. extremely involve etch well more gate playing is every vertical our that to that almost These is advanced we're think to think becoming what challenges if we're trying highlight the more -- the those fact

of And to is so is hard high. happening quite certainty timing -- certain the predict, relative changes but those

Mehdi Hosseini

a think follow-up level? normal for And What of Doug. Got deferred or revenue quick should it. a normalized we

Douglas Bettinger

is I'll suggested somewhat up maybe Yes. we normalized that past, around picks the billion level but something the elevated statement, and maybe billion. the leave longer said, normalized a Mehdi, roughly a we're I level maybe bit, remain $X elevated, in that. what $X I've from little

Operator

question And Caso Chris with comes today from Wolfe our next Research.

Unknown Analyst

to ability returns. ultimately demand and your where react are about when times is times your now Question generally delivery lead

comments you orders. see see spending. some you that get started to mean increasing think have improvement they before some before a before bit need significant your made time and calling they You little customers Does some start to -- of luxury things would of better this a they bit

Timothy Archer

Yes.

were go a I to variety say back think that generally I mean to lead talked that times our A about if we've come reasons. and I think the I to realistically facilities. extended, made in would still back. about be compared and our lot we of when to for starts of to has but pre-COVID, demand talk manufacturing more investments chain respond responsive, we supply be I but when that will able

cases, certain as that is in an that's in it's And forecast little operations we respond area memory in the closely to I continue to about has we good again, able more Now I that we're make customers been than a with urgent our sure in supply. think And global tighter a have talked certain High investments to been good bit others. thing needs. where, have still think we areas, bandwidth our about. has very tighter made we quickly little customers than the work

Unknown Analyst

Got it.

follow-up. a As

impact do it's the week on do the extra impact little in I a to clarity week? what more the If you expecting, give quarter, cost a from extra that be? you're expect And on March expect think you -- both revenue you

Douglas Bettinger

see you Usually, really of revenue Yes. much impact, a frankly. don't

salary extra for based weeks an instead more with I materials project have I'm well whatnot. number, a people of like You and this, how quarter customer didn't kind about spending I you but on think just got chronicled you not of in pretty what on week, know. there. give got going manage it. use XX. of when. sure, grows I much expense, But to think XX put number you've XX, specific wants don't a more just about know because I to but XX coming it's versus When it, a time

Christina Correia

more Operator, please. we one question, have time for

Operator

will Our Deutsche Ho Bank. from be with final Sidney question

Sidney Ho

go in then utilization In. past, recovery from guys expansion. spending the will several to phases capacity memory and talked upgrades tech increasing you In about

customers dynamics capacity across your One advanced converting in to change memory excess Are happening of And talk terms capacity that of the other of seeing note. some about timing this memory you the how that of address the expansion? view suppliers? does

Douglas Bettinger

breaking little you Sidney, up were a bit.

I And we comes first, were happen, back. think asking about back, think will I cadence what think your that you comes question. I would think utilization the what I of tell when you, was spares

and upgrades, obviously, things you'll base the taken some happen have has Second, to see will upgrades of some offline. customer

purchased. up that spend gets needs online occur to speed get So to there's and That changed. a and new that then to hasn't eventually back equipment

Sidney Ho

Okay.

So my more about the of question you of compressed. to customers some is some doing like it that notes, actually meaning to your the was suppliers Are the excess trying that? seeing advanced timeline all address memory convert the capacity seems

Douglas Bettinger

I get up talk talking needs customer that that spend but another, or in to That's stuff in the gets taken that that X CSBG. about upgrades don't offline will We any upgraded. the about, one show eventually commentary was upgrade

Sidney Ho

last Maybe Okay. for question it. That's you.

to gate-all-around remind do Maybe all see watching changed in when timeline indicators to expect has what happen? terms timeline. gate-all-around, leading And are that as is to ago? gauge your that going months the of your in compared Given when us to at X related just position you revenue you

Timothy Archer

-- changed it's ago. don't months I gate-all-around around X that yes, our timing has much from Well, know on

something performance our their that, [indiscernible] to it's important again, is scaling of is device think a device locations. I performance customers and means and

with into and engaged they tools make qualified just ready get new to well. ramp we're nodes decide we'll customers them, when So those as to sure our be

Operator

for session. And the this for like turn I'd over to our closing team remarks. back management it to question-and-answer

Christina Correia

time Thank Thank today. and your you you, operator, for for we joining. everyone appreciate

Operator

thank Thank all presentation. for call. you. conference attending today's you This concludes We today's

disconnect now have your may a You day. lines, wonderful and

Lam Research (LRCX) 18 Oct 232024 Q1 Earnings call transcript