LRCX - Earnings call transcript Q3 2024 | Lam Research Corporation

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Operator

Good day, everyone, and welcome to the Lam Research March 2024 Earnings Conference Call. [Operator Instructions] Please also note, today's event is being recorded.

At this time, I'd like to turn the floor over to Ram Ganesh, Head of Investor Relations. Sir, please go ahead.

Ram Ganesh

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

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

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

afternoon. will This made Time. A call scheduled p.m. available X Pacific our call of technical this later slides to is replay difficulties some externally. last until We're this posting call having be earnings

it We our website as post on. call. the post it we will will on to If after try call is not, going this

to over And call with that, hand I'll Tim. the

Timothy Archer

all with for environment in to solid These progressing as that midpoint a share results execution call. profitability you as per in to predicted outlook exceeding start the quarter and thank June and point industry us guidance. quarter, Lam's XXXX, Lam January we the off Ram, of joining revenues, is much March the for strong Thanks, today. is an in calendar our everyone well to earnings as our our

XXXX revenue driven change demand memory, WFE perspective, calendar meaningful modest spending WFE lithography in mainly Today, remains DRAM for from to our spending we strong low see growing by China. view, our industry the investment sustained We with for prior an increase From mid-$XX shipments China. for no domestic billion in XXXX range, and the profile. industry by overall in Lam's see with high-bandwidth to outlook driven additional

logic, this partially leading-edge is foundry in by In outside domestic mature had is China. decline spending Domestic being node growth in running offset we year expected. higher of spending previously China than a spending

China it being Lam's as However, weighted first from contribution the revenue see we progresses. still declining with half year

year-on-year uptick calendar in In have translated XXXX. utilization. seen percent this in has our in double-digit the And spares we revenues. March continue growth NAND, WFE expect quarter, spending into to quarter-over-quarter Encouragingly, an we in growth fab in

continues setup for demand we NAND of developing to through the spending. normalize a of and supply year, the As strong see remainder XXXX

a are satisfy broader toward trillions a of deliver are decade. and that will enterprise memory in semiconductor investment the next foreseen for significant we realization, storage. AI's the transformative over capacity cases, both required consumer believe and compute, coming level and only global markets use be manufacturing in of advanced demand to growth move Lam other stages early benefit in recovery, innovation. Generative on to of and and powerful built of WFE emerging we at benefit semiconductor economic expected and dollars applications As are stands from smart technology of to a secular semiconductor foundation drivers AI the

and and customers solutions, second, resources semi complexity cost leveraging and the the capabilities To advancement, time digital technology can reduce disrupt to deliver collaboration; In time, companies approaches: of equipment putting differentiated this will end, are of X close same is versus accelerate at to rising strengthen pace while and that twin innovations development. the be Lam's first, Lam the fabrication. semiconductor we our in winners are capabilities we this more to investing environment, cost the proprietary that of technology the

effect. the quarter, important on a applications. Already, cycles R&D having footprint to the wins In of logic Korea, distributed in past advanced and DRAM U.S. Taiwan in Lam's we've new we accelerate lab packaging. for resulting used seeing both learning and are positive Lam investments our in foundry customer-centric

to capabilities multidimensional the a productivity. faster interactions and respect and Semiverse With process with of performance deposition at etch and influence use process experimentation. model leverage on-tool the of solutions, digital complex Lam's created now device we regularly twins that to portfolio to scale optimize tool the these and recipes less wafer the engineers reactor

prominent need HDDs. on AI. storage related Xx in or level most early advanced higher-density DRAM compared disk to long-term X More ahead growth hard key applications NAND business. eSSDs, is of vector NAND storage. The system has however, logic. to to enterprise that at or and been AI a foundry believe, drives for and in still Turning power and and to We drives NAND-based impact more read our demand impact power-efficient solid-state faster, faster AI's space XXx use XX% are less the right capability, more represents efficient

improve molybdenum cost is tungsten line to both enterprise In shift SSDs technologies, leading stored capability NAND performance for height and word stack access as role HDDs. favor this which And cost and scaling. continues Lam in deposition, the is for the per playing a of in key are on by is enabling expect to reduce device over Lam transition improve. cell. of Today, storage data time critical XX% where to from example, we is mix This to and

base of to are improve layer verse base Recently, partnership rapidly with from to successive the learning data the with cost and the simulation in this formation. tools In using manufacturing semi the our of amount capabilities tremendous enhance from installed approaching Today, each combined we coming at aspect memory installed X,XXX our customers, technology strengthen base. cryo-etched is our NAND. solutions transition to [ our further differentiation. installed etch etch, Lam ]chambers In ratio high-volume high cryogenic in productivity we're using we of hole

defended our of have far so aspect we result every production memory made a ratio NAND high innovation accelerated etch customers. hole decision by As

reduce to read TSVs stacks than right throughput data high-bandwidth XXx increase speed to DRAM. dies AI consumption. enabling more using or DRAM respect memory With and server multiple standard DRAM, servers power HBM HBM use

However, to requires Syndion this costs for and only not bit best-in-class throughput and conventional memory. approximately wafers threefold keep but plating customers. important our HBM to capabilities, also tools and increase mind, compared overall our low With in XD per deliver it's in also productivity an industry-leading that SABRE provide etch

grow are year HBM and TSV than Xx for expect shipments HPM player We XXXX. calendar leading in related the to more in applications our

XX% We including are FinFET ALD, improve enable around, help Finally, the all positioned transition nodes logic XX%. backside well inflections per on calendar interconnects to such molybdenum watt see and and needed the delivery, from foundry selective for foundry move logic side. around as to exceeding gate performance gate for tools, our XXXX, billion. all to etch $X dry key in enabling to by processes transistor Lam a also photoresist year power Lam patterning. ] [ are shipments tools EUV

more multibillion-dollar with traction as together, a strong drives And Our opportunity for a is need customers greater AI on devices. growth power-efficient faster, inflections. they Lam for these represent

and AI, semiconductor equipment the To of years commercial secular manufacturing for powerful and for in global ahead. chip the Lam drivers conclude, proliferation push industry the products and of the capacity consumer in ubiquity represent new the the of semiconductors localized rest

company's March the and outperform this in with pleased are our opportunity focused remain quarter, next of and on through execution our industry the results leg to growth. We

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

Douglas Bettinger

a know call Thanks, is during joining afternoon, for busy earnings and our everyone, Tim. what today Good thank I all season. you

We delivered solid in results March XXXX quarter. the

percentage our ranges the the the [ of March quarter Our Lam margin for robust ]. company's guidance achieved pleased results highest of merging with metrics. the Novellus in came I'm execution. gross financial all midpoint over We continued since with

very We cash billion also revenue. flow or of of generate strong $X.X continue XX% to free

March Let's Revenue March dive prior was roughly billion, of results. was the the which the flat our quarter with $X.XX quarter quarter. into details for

Our the payments. tied deferred $X.XX I to revenue of was billion, as million decrease at from was the will the recognized throughout year. continue we deferred balance was a end to that quarter trend continue to the which those December believe revenue $XXX downwards related customer advanced revenue of quarter

a was XX% by saw the me, we in was XX% in is light Memory prior the to versus quarter, X-[ XX%. high-bandwidth decline that enablement. spending X-alpha the quarter. DRAM a DRAM in of From the largely The memory segment spending quarter coming revenue which revenue focused and attributable X-beta ], level was systems DDRX memory perspective, and systems segment March of December on the from nodes, driven decrease excuse in XX%, -- at

our of noted quarter. in revenue, for in it remained on a WFE the we This but XXXX increasing nonvolatile and basis quarter. is memory quarter, level a March from the up subdued represented prior at segment in XX% mix last As XX% the systems

to want one mention I thing. just do

has are to XX% in The We Xxx devices. investment it conversions others continued quarter DRAM the in [indiscernible] a The specialty This from Xxx represented prior X a modest spending are our since what XX%. customer's predominantly percentage driven very characterizing March And industry doing. nonvolatile XX%. level the revenue different mature Foundry in Growth softness. increase investment in to China of revenue, systems a NAND finally, than of be component the driven were quarter, the December was might was investment the of by was and node in as and segment layer slight segment device. by nonvolatile driven by concentration of from the domestic systems the decline shipments. XX% Other down our quarter

the up China XX% prior from total and Now regional at in quarter. discuss slightly came composition The revenue. our in I'll XX% of region the

our continued customers. quarter was spending mid While largest in year. This multinational from last most since China China be of Chinese domestic the for to revenue

region the this will, decline XXXX. spending to go as expect year. believe year-over-year it however, we through We increase in from I

out March remainder largest was and of Japan December in geographic XX% quarter next quarter. XX% at the in top Taiwan regions. versus X rounded the Our concentration of the revenue the Korea

from Group Business March Support quarter approximately down XXXX. generated lower XX% calendar $X.X Customer December the quarter in was This totaling than the the and year and X% Our revenue billion. quarter March

utilization March revenue the continued offset very mature in in revenue the the The of spares. from due since of positive higher at impact quarter and of partially level spares lowest the revenue years level in Our from is level the to spares a X decreased at highest increases customers. Reliant seeing signs node end last Reliance business our investments, is early by weakness Systems is XXXX.

extra The well mix an of up I'll week in above were as favorable margin The quarter was This a in of the million, improved midpoint XX-week from Turning to conscious to primarily R&D March the as level a quarter changes March at result of incurred expenses $XXX due prior quarter above growth million. product was XX.X%, and customer in in and in XX.X%. amount was performance. as efficiencies. it came our of increase quarter range quarter for December guided quarter the factory part gross you, the well our operating remind spending. expenses $XXX as the

the remain a of percentage line growth As quarter and was was in by the we to end of Tim extend and at somewhat for the our our because This strong of with primarily laser-focused in XX% watermark offset of was December a spending margin XX.X% investing competitive as gross Operating mentioned, the of XX% at high current in high coming performance, the which product investment. guidance and range. level R&D in R&D margin total at on differentiation. spending. R&D was quarter

XX.X%, non-GAAP tax rate with our Our was quarter the expectations. for consistent

income in Looking further and to in March possible cause of into the mid-teens, level to quarter continue in we came OI&E compared with rates. with at will that in quarter-by-quarter. December believe volatility cash low be for could higher fluctuations fluctuations balances in the to due will in income OI&E the market-related some income The rate be quarter-by-quarter. $X expense to was and million million increase the Other higher tax interest $XX quarter. XXXX, subject calendar some

the $XXX the On to dividends million we things, paid repurchases, in capital return share and in million quarter. we allocated approximately $XXX March side of

well return repurchase flow. month the as capital activity of returning we arrangement. repurchase execute share into accelerated to continue track The to would just open mention, XXX% included repurchases long-term our And ASRs to XX% cash free both I an as continued of plans share April. of towards market Our our

from $X.XX share higher expectations XXX earnings the diluted The per track share end down our towards March was guided million of quarter. the on range. count shares with was quarter December and diluted

repurchase We have remaining billion share Board-authorized $X.X plan. on our

Let balance me to pivot the sheet.

increase the buyback, cash Our extra Days the end March from a a of December in the investments by the quarter expenditures. XX short-term quarter collections the and $X.X level. was quarter. days at quarter, the allocated $X.X in due of The days cash December end and X.Xx. dividend from level turns an December in totaled capital was quarter, payments Inventory from offset March the million sales quarter. to the at March of largely share billion, end $XXX little billion billion XX down quarter the March with $X.X bit week decrease the to quarter outstanding totaled at prior from Inventory at remained flat the up

We are levels on calendar work progress will in making bringing throughout and we to down, inventory XXXX. this continue

primarily We down quarter Capital approximately in compensation, expenditures from the equity in $XX million depreciation $XX quarter. $XXX included quarter million be Noncash in strategy United to in amortization. the $XX million full-time quarter March expenses for employees, December our million locations. States and the the with with Asia in were was March the approximately expansions million, development March Spending $XX our which flat global quarter. to supporting lab prior customers' XX,XXX close on was regular ended centered and the

turn for point. now to quarter-to-quarter of or Let's percentage shares. margin change quarter. XXX prioritize of $X.XX earnings XX.X%, share X from percentage minus We're R&D gross in or XX.X%, customer point. to This plus mix. $X.XX a minus reflective gross commitment approximately finally, This per on plus XXXX of our of our reflects And decline of $X.X or expecting plus million, Operating March is share plus billion, based continued non-GAAP $XXX spending. margin or the a count minus million June revenue minus of guidance margins X

such excellence year So a such these let in continued adoption We're efficiently managing overall power investing transformation advanced drivers gate backside the and operational a of me positioned growth seeing while move expect well to Research. We're and long-term delivery, strategy photoresist. artificial trends. We're the material coming, intelligence, as to wrap accelerated XXXX for our of architectural all Lam expand and is up. leadership around, of that semiconductor Lam spending. strong the our for as be technology are we beneficiary change drive to encouraged long-term and packaging,

for Operator, prepared call would open up remarks. like the that Tim questions. I to now our concludes and

Operator

Sankar [Operator Instructions] Our Krish from question first TD Cowen. today comes from

Sreekrishnan Sankarnarayanan

for And you a there. your ago. prepared a a one market [indiscernible] market First you said Tim. where high year in ago, your also a from on aspect ratio introduced you for product cryo high comments, you Tim, that share. but have question share have defended NAND, etch X very years company X

about of like I'm bit and kind curious, dynamics the fact share high customers about So [indiscernible]? a NAND. can using your issue etch some XXX talking of market are talk aspect cryo for that the you little And layer

then us you I for So follow-up there high some give ratio on a can Doug. have aspect etch? And color

Timothy Archer

approaching Sure. in that's have now had is remarks. Krish, points NAND etch chambers. X,XXX etch, on tools couple we used of But one cryo a an data base of cryo my installed for prepared

production So there are comment development for exploring application some the different always quite my obviously, was we've options this with during that been time. in And customers phase. high-volume

my very complex production. But high-volume is, put to comment these as processes are into

commit customer we once the been continue to really learning that point decisions that the defend get line, technology that decide and so manufacturing able our to leverage of to we the readiness. on their too. working And tool with fabrication they we've the customers, And extension focus which focus, by come to to having next

And sure so for application. working have to best we can we the say we're that's all hard the is tool make

the winning And so far, it's day.

Sreekrishnan Sankarnarayanan

it. Got Got it.

gross hear mainly moderation of the the China? in Doug, how then that about you the kind to that function on the to question half how I maybe of back June Is think And due gross can if half? And a about margins to share mix. Doug mentioned follow-up the customer maybe And the about is to good margin, that into the quarter year? in OpEx second of think a So margins. solid. still extend for

Douglas Bettinger

guess of couple things. I a say Krish, Yes. I'd

and any in region customers, geographic little margin we're when one not it's are to selling smaller better more. pay of But And it's have they the of regions, purchase First, gross to customers, a size volume necessarily. a because but pricing it because we geographic bit they -- a and it's not some pin to because tend to sometimes going there sometimes, bit customer. China, the I'm of little smaller

thing a region well China that's think we one will bit And year. to what through scripted So go that think we my in about. Tim said as modulate as little is the remarks the as

couple that's need a I've So And of quarters. we about. about what been for of talking to think this part

have your that I updating you're mind anyway, in So when models.

talking, a we X and quarters dry of R&D around, absolutely now, doing the see about couple for changes we've at backside like that technology year Second, [indiscernible] this investment power, because maybe on grow I these quarters to that. been forth, packaging And of all resist. planning think, actually need we're advanced so

the saw as You of R&D. March a total percent in have investing spending XX%, the highest keep was I at to quarter, intend R&D we here seen and that in that

So the line we're top year. to independent whatever is, grow of investment going R&D this

Operator

Our from from Arcuri Timothy UBS. question next comes

Timothy Arcuri

about I ask So wanted to China.

but up domestic through it year-over-year So year. China still going the this to to be for modulate sounds like year, it's the going mix, it's

if entities I'm to added your addition if wondering would potential entities? reflect assumption we've remains, what my Or downside I status So meaning list. that guess the this if seen some added entity is, few say, be does question being these that comments? entities there the to comments hey, on these these that, it quo is basically were the of is, headlines potentially a And

Timothy Archer

with can't that we trade we don't China forecast changes respect obviously, policy mean, about. to I Tim, Yes. know U.S. in

China business rest affairs giving have the what the up control on I a we've years, to pretty just of built basically that team recognizing obviously, our we strong the best relevant a we're the will over Well, plugged we all of strong we export of that is year what do what record government we there last the And were government and couple into that's policy, be what changes to don't you of through will discussions. think we our into I plan U.S. responding is could be so and going think we foresee. view you've And seen -- say with future. track believe the working

Timothy Arcuri

I a ask to Sure. bit. And just about Doug, service wanted

different happening the and in talk business. and spares Reliant Reliant much because there's kind spares in sounds piece weak. strong so piece odd it so certainly dynamics that this I an So the is we'd you of have situation that about Can mean, --

you can what any So the read-throughs give does for sort mean of that Like us of that business? there? future

Douglas Bettinger

I Listen, that different to of CSBG. it's well right about got Yes. X think now on dynamics you've going understood the relative thinking components

to somewhat But clearly would is to couple starting been that. the First, I over That show the up is better. of spares business. specifically beginning say of get versus the because reason last industry level it's it's where is utilization early years that. for I days our about spares definitely talked in

rate think of pretty note China right? of Reliant. outside now. the when Mature in the certainly the I CSBG now right that's also However, understood well down we soft because investment in were we pretty region total, is in softness industry,

this If last it. Tim, guessing, helps CSBG year now, is that's year dynamics have because that about dynamics probably those think from shown X line. the on offsetting up you I of in you X competing if right those so was going flattish And CSBG

Timothy Archer

mean, in, move clearly, you to think mean, a there CSBG only But into starting there activity longer we commented that that customers. technology will when would coming thing space. the I has the utilization we about bit large I of on for most in We've think is we the talked that about add business I a also the little tick XXXX, think been up. our as is, I are yet significant upgrade I nodes term, portion especially installed the useful moved base see NAND back towards not fact that

much through into we this think and And also move perhaps year, beyond. clearly, business will into the that in I but flow CSBG not so as so 'XX

Operator

Harlan question Our next comes from from Sur JPMorgan.

Harlan Sur

be Obviously, and accelerated and there of you still centered lot very compute constraints seems packaging. a in bandwidth Tim. [indiscernible] here, memory segment mentioned, you guys an With the AI around tightness as market, strong to have a semiconductor high position of

And some this type $X potentially team of previously like as mean, year use just expanding Lam on of I the is the revised billion revenue already the the that opportunity. place, guys $X right, new this drive business, the few opportunity billion given about trends what's for revenues revenue demand view plus advanced strong to You talked maybe over this But and being cases, packaging the in per pull of the here now are your year? opportunity on in track or kind next years? team

Timothy Archer

Harlan, responding I there as we think is right, pull that you're I quickly as demand. we're mean, strong in. Yes, obviously, the to can

Our $X will billion. packaging be this advanced over shipments year

next And important of like seeing growth in tremendous milestone. this area. in kind an I that so we're demand milestone give that's how don't Obviously, you know us. for to

are by do positions positions of to as as the what said, the of foundry in not talked we our logic side related on packaging strong strong, Our packaging, HBM but side you very advanced HBM. in specifically also we only

to to the capable just where ahead so area in are we an area. in see think talked about make to the go in We've are investing advantage driver panel the sure past equipment we we space it's we'll industry. packaging processing is secular where And again this the taking real going long-term our long-term semiconductors what is to a work that and of I fully market for good see look see of growth trying

Harlan Sur

that milestone. Congratulations on hitting

my as the manufacturing that with dynamics quite more improve, constructive cycle looking like outlooks their and trends the for strong right, tailwinds outlook solid, complexity continue to customers growth your spending is on got For question, follow-up you've team.

low-cost is and highly the guys mentioned, you've geography, have mean, Malaysia beyond So skilled but ramp year of if only I look got workforce. it like new I not manufacturing out facility, this you your

locally also as chain infrastructure the support supply set well. You up

I to So think the out benefit it's know on revenues factory is don't any Doug, incremental you there that about start to for Tim way as margin gross if of or it? but load the Malaysia incremental flow

Timothy Archer

of first the take Doug comment. me and let margin then Let it, part the specifically talk about I'll gross

I we're it's in up feeling which of think is think a last ramping was, must lot with, very that comfortable thing got your you've boy, that. question there to for demand one I be be

we of this where I think come The made we the supply built saw as industry next about, positioned since feel very upturn lots been chain talked well last just to more up relative up workforce. into the cycle, big the all the trained in you things we capacity, constraints. and has physical the resilience

And so operations the the house. standpoint, on we that have good side that really of feel I we think from executed

need new peak Now question. that Doug margin externally. start of that we address kinds will to volumes And just demonstrate the seeing gross your let I'll

Douglas Bettinger

prior in Yes, I've which is financial you said ahead it. remind what want right XXXX. about still don't out model that I That's to Harlan. guess, way the to think put just you I'll quarters, of we I run in

intend now, mix. is quite was ready about that don't right benefit not to we how know, Malaysia after to about incremental is and margin staying on to the customer It that's get think going don't when into show way whatnot, back favorable it gross we're for got but and than we the future. will that. stop inflationary to and higher. up financial that. better still continue. the push focused from Certainly, stuff wrong we that we're volumes, obviously, maybe that to ramp model we the can little completely came through we've But expect I a the I'm maybe Now Malaysia I

Operator

from question from Pajjuri next Srini comes James. Raymond Our

Srinivas Pajjuri

I you you And Doug, to comment If it moderation through Or about China better Were back the moderate would year. Or it DRAM? just both? is quarter? just come to add one the in some that, in clarification. that Did go China? then the expected? mean, logic? it to think within is helpful. to your China particular side, than this Any be is segment on you expecting I color can rest it of China

Douglas Bettinger

quarter in pretty It it we Srini. pretty last continue to remain was Yes, March. suggested in came I that much going good expected. to as

little bit know, So we a that you relative I color was much expected. the second any got of that specific It's DRAM, it's China There's half. as And foundry, don't set. are there at I've like to a broad in segment customers every no, And that the pretty it's in in such set broad level a in for slowing a in it's segment. logic.

when the with part that weighted it standpoint. from somewhat see it we a specific at I year, But do in total, had I the So look somewhat. to early nothing modulate here share of segment and will you to

Srinivas Pajjuri

Tim. Tim, for maybe then And

as well. of and the Some of amount U.S. a Act customers the chips other large stuff outside your got good pretty the of subsidies from government recently on

I'm potential we funding any, guess, of your getting? in business orders I of impact as should money of that guess, comes own timing expect what the I from thoughts on incremental And sort just wondering So terms this that they're in?

Timothy Archer

I'll a few grants announcements just elsewhere. in the like future about chips ] programs mean, I on you've weeks, bit even few and Japan note seen U.S. quite in there TPSAC Europe [ the going also similar are last and obviously, obviously, the in the places further in Yes. a in little that

a time side, lead like provide. equipment more -- always we've time of these we the shorter the frame XX tools said are XX, especially so XX, from for And

think lead a so 'XX, then will that go tools I our it's a see 'XX, lot connectivity, long construction And come. still you us. coming So 'XX in. up you -- time fab for the of know we and time opportunity see I mean

focused in generations our and of well foundry that's leading-edge about while thing is leading-edge position of strength what's maybe as, to In have of demand. one logic. as most about a important R&D a story course, our really the the is the money next lot continuing that build And nodes. is, towards to we that of is exciting targeted investment of But lot DRAM extra high-bandwidth Lam's thing memory

these a actually we see not fabs new additional that where we do it's market at as but so spending, better perspective. we mean, from up, and believe nodes it's And will I share come only SAM

know And patiently to so waiting. it's we're going But come. we

visit go can for feverishly the get fab the buildings equipment. You and sites, ready working are to them there, they're

Operator

question Cancer CJ from Our comes from Fitzgerald. next Muse

Christopher Muse

first a try taking outlook. updated more billion. little to looks to WFE by guess I color your I about It wanted you're up get on question, it like bit

that you. not really talked being about You litho, impacting

of you still how are low the from relative guess or should you I WFE drivers, expect them X there thinking see? that potential growth kind X to about of you're of guess, expecting large the we So up X infer mid-single and that, those outperformance as that and I And part that, particularly, digits? to

Douglas Bettinger

Yes, I industry was the at peers shipping into not last reported change and look what view all, it a if That one obviously, of of market. little was missed week, took our is [etch] just moving a bit little from day, just missed maybe have China. vast of the it's bit CJ, stronger, our that But we the majority, end -- we point addressable trailing we is foundry the a change in at WFE the in not of our probably a it little we biggest a some a of that always we part There's little logic and let saw softer. -- because view. DRAMs bit the pieces mean, of

more all the time. it of your Try your of one I'm question, CJ. not -- sure part second caught I

Christopher Muse

as around in get think think opportunities, I including about you'll all particularly those 'XX? also around and you and that guess, within HBM to how WFE you fare relative Just packaging advanced billion-plus $X

Douglas Bettinger

Yes.

for transitions, in it some last was it should I think sure. technology of better year mix given the see we incrementally be these than

Christopher Muse

second question, quick I could a I as if sneak guess, just it question, in. then third And

back into XX%-ish talked of mind margin. getting And about normalized second gross to your better. sounds the China of normalization You half. It is China, a maybe type in today like

what number guess, strong continues that I would for that be So be guys? you if to

Douglas Bettinger

with for and You're XX%. had those of you was we've where some right? we after the right, kind CJ, margin to done thanks China look gross at customers. guess, got the Malaysia smaller where sort absolutely before up just of been, of stuff I mentioning That's popped and

And largely that so the customer above we're mix. level fact that is

we in look how be you couple thinking of then last if mix the couple of that's might it. kind what of that got mix so percent wrong, for should data you range about understand depending can It in quarters solve -- will XX-plus points like. XX% that on margin a And you what have the to that it kind be to like. of And looks

Operator

Our from question Citi. from Malik next Atif comes

Atif Malik

the for one some to market. Tim, first NAND green shoots Tim. see The in good

side. storage growth NAND high-density and is have inflection also per not front us. you're we bit You on far talked SSDs Xx for the about talked that DRAM the in that the But seeing about in the AI of double-digit parts you offset wafer do

kind of in expecting trajectory of half paint So year? you're for the second us the can the the next that you of improvement NAND

Douglas Bettinger

We're be not going I to way give It it's will though, It's forecast you a quite that. right? 'XX yet. better early too for mean, improving.

Timothy Archer

weak the that we mean, XX clearly, giving Well, NAND incredibly exact guess you to I for all numbers. last Yes. the know XX months. I has spending been without

so a are the what to our I if that shipping in that that of lot stages the rely the see talk the we make of fact of this, for recover. they're edge. think you at publicly most starting leading look of And at they about very on commentary but they our maybe And we're early XX% customer -- bits

you'll at base move upgrade installed up and do base efficient to our to WFE we when the of dollar than think nodes. every But large NAND installed a because therefore, is our forward But be way to a comment. through technology in much large going in that move through I capture added. will that it comes forward WFE of -- customers the upgrades, move they see systems, a to Lam's spend most of for greenfield there 'XX. large was is And of the be look It's have. my that will what I rate a already that still next higher to portion degree, believe to capacity the that

we'll in out shipments all when the type all EUV. obviously be actually confidence NAND, the stayed as dry mentioned, also we're of would obviously, all high expect seen the as in And segments, talked gate do We the have because tools it occurring. pretty gate around around -- And the like power in with in into of it's think because So And for $X we I have that nodes. doing market obviously us packaging about over Lam's our also -- backside to will in in it I etch photoresist billion front outperform there XXXX. inflections work of already processes technology are I about to spending around to technology is proliferate, for think continues year, other then advanced where and we and this ALD of XXXX, better. of selective opportunity high delivery. we the

I most are a XXXX. the for just recovery growth obvious, like there of so which in a is company one is NAND drivers feel the number And besides the that

Atif Malik

Great. about up, what's that? Doug. about they about Can you worried XX% restrictions? trying And technology? older surprise are not the to which some picking talked just talk driving your within multinational sales, Doug, to China then incremental customers for one a Are of positive of Or you as upgrade those came me.

Douglas Bettinger

And just capacity think see year. that's they yes, demand being the I the last to mid relative I it's level highest it's to there. the said since responsive

was as it. the was I everybody I about I Although spending just asking mentioned. position But China, it that customer to just vast going Chinese The China indigenous be in over observed and majority of through I'd something knowing do the was continues I numbers to be thought the understand going base.

Operator

from question Sachs. Goldman comes Toshiya next Hari from Our

Toshiya Hari

on you years? molybdenum of Tim, a you I that about Can of over speak next your terms the impact to next depth tungsten NAND prepared years. well. of to from in in potentially the that intensity the I talked and business happening the your could wanted how ask suppose, couple as of transition couple the market. over question significance remarks, to in

Timothy Archer

opportunity a technology into an Well, system, material new requires it's that there's time a change market. obviously, Sure. any for Lam to the provide

device And so in devices, mentioned because I -- and I I to moly we every is mean benefits thing But say cost and it technology. it's an just call change significant also the the important NAND change. in so important mean hard it's semiconductor the some it's it's but molybdenum. has element to important of moly

And reduction. so part the thing stack of that is one lost transition about sometimes to moly height also is enabling

So deposition etches, the and more you to other and that productive can stack height in have a then go more to way you productive things. limit allows more layers

important the an for opportunity that inflection, positioned Lam inflection and well for industry I so it's And believe. think import an to win we're and we

Toshiya Hari

growth had quarter. I it. intel HBM? into how kind on And what than growing think thinking And more in consistent have, exiting your think with supports your bit as of input HBM comment was I obviously, very you supply/demand market have, that about do year follow-up strong, 'XX? in growth then on or the 'XX last you Xx you Got sort and are you business of perspective think. from my is increase HBM in that business your year-over-year, demand And the communicated you talked based market in what about you but the

Douglas Bettinger

and bit our I at demand, requiring for something to GPU, AI This try. although it hear but of be when the important us it's quite factor XD probably growing feeding X.XX% enablement going the growing it, think it HBM SABRE is etch small needs, adding about look the it's I'll years mean tool. incremental market. our to clearly you data you're to many to But overall it's silicon form continue that of tool, to and relative a I was to come. going investment And to talking rapidly. maybe get Toshiya, broad deep today

Operator

Morgan Stanley. question next Our comes from Joe from Moore

Joseph Moore

follow up. I wanted to

there a that I just Is classifying you if as there. be and I classifications. might different click there's others could thinking just had coming as that to you're on NAND customer just that people more have talk change? mentioned capacity DRAM. on China in had customer double what's that Can talk to NAND sort You that, to classifying wanted going of that doing was you that before? Should both on thought be than we

Douglas Bettinger

bit little be I sometimes talking I over And last that could is there to people guess say, a confusion. all the I I'd of as Joe, felt quarter. was

So It's that, reason it early said into nonvolatile put on, And and a I memory. it's because everything nonvolatile device. nonvolatile components. got the we actually of was,

to where can as know probably And you number hear and in not memory is you it the X specialty it enormous people here, nonvolatile than big This it but is disclose think I NAND. is enough So about it. want more is. but that you customer going isn't tell customer go to an who I'm us DRAM.

Joseph Moore

edge talk tools that any the see a kind to that for refurbished returning Do Got about sort it. you're And about of you business think ramifications as business, on profitability of where that able can we more nodes. lower to should you in Reliant in stuff there? level of And then we a of there's move refurbish? business, into changes actually utilization trailing

Timothy Archer

we equipment -- -- and haven't refurbish I'll from comment would being back of to move I towards able tools. us customer's a on Yes. just guess divesting if fabs I be surprised those we

as see, for mostly but business trailing-edge think many you tools remains how flows known obviously, it we with a could think us. I think new and I tool, the ebbs I demand of still ship, new

Operator

Our next from Stacy Bernstein Rasgon question comes Research. from

Stacy Rasgon

Like just think was X be Doug, be XXXX? and a the idea greenfield do cycle NAND here thinking upgrades. I of capital investments in back the of variables upgrades WFE for wanted growth if into I the absolute puts a the lot how driven to wouldn't takes cycle? about amount an the in intensity of But upgrade NAND mentioned Like context in 'XX. lower share I around it to those of get than you versus go should relative you you wrong? that into to as I this larger the something greenfield take am about get And of

Timothy Archer

That's just Sure, -- no that actually said is own He case the problem. one but installed to I it's total why for he Tim. thinking take upgrades was I you're spend mean needs about Yes, exactly to comment. are the customers lower. you they is it reason WFE disagree, the upgrade think base. in wanted -- Stacy, this I that. I so the is it I'll attractive right.

for whatever next industry relative was outperformance And Lam's to for about the is my so specifically -- comment year. WFE

we we which is. capture upgrade obviously And of for we're NAND so WFE would a next that had years, last in percentage X saying upgrades, of cycle, the haven't an whatever in that higher heavy cycle

a in we've Now higher said upgrade added through every opportunity terms of Lam's versus because much in different capture rate, past that of so the revenue greenfield. actually for not an is that bit

comes almost WFE higher the capture because rate. why that's down, the for capture we But So it's of much for same amount revenue customers. of attractive Lam,

goes both And kind ways. of it so

Stacy Rasgon

So you're cycle upgrade cycle? to versus like a greenfield indifferent an

Timothy Archer

the the about there's is thing they Lam's we're preferred say been would already I of would I what the the installed that quite because when upgrade others, Well, not say because positions whether don't indifferent base is lots defense only of the means that, share and customers path have, market questions again, and is change. power to

forward carries position And so Lam's case. very strong that in

but our through a financial obviously, So upgrade each cycles. continues agnostic in position from perspective, industry strengthen to those of the

Stacy Rasgon

the again, That's China. wanted to segment follow-up, in Got I it. expectations to it. go My helpful. Got back

it China -- calendar tell does us know segments. it said weakness I you investment it see I'm DRAM didn't But Slide 'XX sustained have at Doug I this anything who reading to you -- seem look logic. if and wrong, think I your on slide So for in on it foundry domestic was suggest deck, I'm to says in unless that X, in

that you're am the expecting, this I DRAM wrong? in degradation just foundry and sustaining? reading actually So is is China Or what the slide slide logic --

Douglas Bettinger

DRAM. of China Yes. in X No. kind Stacy, customer you have

I got region. believe, that at modulate to through stay It's the to about modulate statement in going going made, XX% I not the to So to talking year, and right? it's going that. I segment, careful the China is China in every be is

Stacy Rasgon

sustained expect says, slide HBM's the under in to reference investment led by And Okay. China DRAM.

going what's not that's So happen? to

Douglas Bettinger

Unfortunately, front right going We're the It's in. not technical to challenges. of me is model Stacy. slides some ow, in having all

Stacy Rasgon

up. pull X, it you when Slide

Operator

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

Vivek Arya

quite the NAND year, to is you And this instead revisit wanted sounds recovery? important I So Like Because comment it much about how doubling. your were really does WFE about about increasing context that doubling spares point? very expecting a of not surface, what confidence year. spares what this sure expectations versus in result? increase data How important that this point, put to it Lam data comment you're like actual how your I'm not means for on for but right? the

Timothy Archer

spares would look the positive first, that revenue, Okay. it it's at double-digit a Well, we general, Obviously, said comment. our I doubling. that percent why and didn't growth was way made spares that so think say spares we us quarter-on-quarter double. that see mean, in to We But not for up. move I in we

go -- the grows. said itself think in year-on-year previously revenue will you last we've If back commentary spares because grow base few our CSBG about installed years, over the

actually that the However, downturn, spares through fab surprised in bit. down, we so severe a were utilization which us cuts revenue saw come this

was your We to market of improve. increase. see starting back as would of the customers started that utilize sign online, as be the some really we that to point bring first the that We spares the tools to fabs said knew soon maybe would expectations. end and So

equipment you second utilization We've the to to utilization reason of to of would and come. which called tie spend spares a further choose the obviously, utilization so what have side. out a is have starting said is think you -- first on But one get technology it's improvement, was to is indication, from is doesn't XXXX capacity that when the And likely improving because we that add decision. it you as more it spend that to which you're hearing our It confirms, issue, customers then that, upgrade or still event is either the rest more I WFE improve. what

Vivek Arya

calendar mean it Or other mentioned Or I the you in thing Doug, the that growth earlier? you Or then this not hear sequentially? half. if believe, mean for second implies that did kind calendar did year, mid-teens because And of on properly? the you is for I it year did be CSBG call, will it flat the pretty strong

clarify could CSBG you and you you about growth were referring frame what So whatever to? time if said

Douglas Bettinger

said flat. that's way, And said the that I well. flat-ish, quarter We a Yes, new plus disclosure. not last minus by or as

Vivek Arya

For this calendar year or for...

Douglas Bettinger

Correct.

For year, calendar this yes.

Operator

question Research. Chris Wolfe from next comes from Caso Our

Christopher Caso

you And part think the And talked I in capacity Obviously, HBM year. expecting about the China guess of that for are expectations is the could on the through of a sounds about talk what that DRAM talk question previous fungible on on going year you direct as going that perhaps question, in parts progresses? revenue the there's that's moderate are now? DRAM DRAM. a the good. about HBM. Could broader you to that with with moving first your some right But from I question

Timothy Archer

Yes.

me Let start.

fungibility the I address of to capacity. one think just point this about

are if at think enable comments One, Obviously, I of talking though. we've specifically about the HBM. in we're that couple correct. You're the tools a DDRX, needed made past looking to you're additional

etch need our And you to add because those so capacity that's possible. whatever tools added why have we talk DRAM, those our about to electroplating tools HBM and are Syndion for might to you silicon make

seeing we're And what Xx year. rise so that's this by

estate from much the HBM, needed TSVs. when second talked larger to that's talked the the about the DRAM the you die our has when add conventional go customers size industry about have to had because to -- you On and real you've add create side,

over DRAM bits, to need as to the And of the equipment so able translate be produce well. while may number more that same you'll some of of equipment same you

key moving as HBM additional DRAM. as the So -- growth into there's you're you for spending move drivers are those

Christopher Caso

it. Got

talking billion As context Could your comment is you remarks gate-all-around of opportunity you $X in from where about this year. that prepared in -- represent overall capacity? ramp? in gate-all-around talk made a with just the a follow-up, gate-all-around? billion you revenue started? that about getting is would processes where Is $X Is we that are gate-all-around Kind consider this of that for be to what the

Timothy Archer

mean it's just we're starting at really think -- I Yes. I gate-all-around.

into billion smaller the nodes Our enable of of across of all our that year. gate-all-around gate-all-around products shipments comment was $X it's types help this technology nodes. And

our SAM opportunity intensity every and that etch is said node, we've and depth what expands. so grows technology And

etch in important from like our or notes. ALD for where gate-all-around in new product portfolio the to that an portfolio And might there's being degree product in have Lam same selective node so prior need our not existed tools

just so rest -- those we're we'll advanced well the areas X question. as of our take in as [indiscernible]. Operator, And more where technology that's growth are products growth the in seeing

Operator

Our and Brian Chin from next from final Stifel. comes question

Brian Chin

foundry billion the discussed year, activity, year. The incremental billion of that But to previously now capacity given advanced more growth, do you Last an driving company $X.X server penetration. some AI WFE X% for the consistent see order? and billion? DRAM underutilization maybe degree on And spending you recovered. playing your increased for has math and nodes to that maybe focus $X.X every $X levels in lower was AI the the last with conversion guess, already billion utilization I that see $X rates out have to Do

Douglas Bettinger

every are an it. utilized. nearly NAND, get $X.X And And logic temporary percent right, that underutilized, was that's Xx see bigger incremental situation. server backlog. Eventually, made that's like WFE. because still GPUs and you a versus the things is did to back the so talk statements about $X Xx Yes, it not if don't how -- of but billion you've you're But billion for we Brian, we server we're class spend DRAM, got to the going much, absolutely to the AI as need being to much things die, but and an right, which order enterprise

Brian Chin

calendar how kind half maybe in of on XXXX high last much shipment Is How versus just billion second follow-up is weighted? more a kind of year. And production? $X again, of follow-up. that pilot then helpful. That's But Okay. the Or it of volume? of it for is much kind pilot that gate-all-around

Timothy Archer

figure nodes. on to just when of those color their more in give expansion we're for terms that's we're exactly shipping Yes, customers not because we going our on

Brian Chin

half Okay. Fair enough. bias. second It's more

Douglas Bettinger

remarks, joining call. Thanks our concludes guys. the That for

Operator

with and today's We you gentlemen, conclude thank that, conference Ladies and call for presentation. we'll joining.

your now lines. disconnect may You

Lam Research (LRCX) 24 Apr 242024 Q3 Earnings call transcript