Lam Research (LRCX) 21 Apr 212021 Q3 Earnings call transcript

Good day and welcome to Lam Research Corporation's March 2021 Quarter Financial Conference Call. At this time, I would like to turn the conference over to Tina Correia, Corporate Vice President of Investor Relations and Corporate Finance. Please go ahead.

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

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

from revenues excellent Lam and March with record businesses, per quarter in joining you, well and cash Tina Thank share. earnings and Great. systems both the everyone flow you record to as results from as install operations the today. call posted thank record

chain resiliency in employees on reflects see demand. in supply needs, are semiconductor ongoing a very customers' strengthening The future. impacts. to support continued We partners are and we making by our worldwide performance Lam growth us in our manufacturing were Our our investments and despite strong execution Lam for amid solid based positioning and related COVID-XX broad enabling the optimistic

expectations last me call, equipment updating fabrication we the our have begin earnings by Since spending plans for our wafer seen spending. for calendar Let WFE first increase year.

is WFE the the Our segments. the than WFE believe XXXX second outlook Several growth. year And of calendar driving for at now WFE in all across the $XX above half, spending device robust play trending in factors this we be half will billion. higher first are

continue from First, AI, such over have and secular past work these of as XG, technologies. COVID-XX IoT home, adoption tailwinds and like impacts learn the to year accelerated strengthen related in

manufacturing a equipment complexity rapid across semiconductor segments. in advanced at of all Second, leading rise devices to the increase a to rate, continues capillarity

chain, products are for enabled call innovative new faster On semiconductor about global driver content. share demand XXXX to governments investment Third, incorporating etch machine and semiconductor to and five incremental NAND increased sensors content more gaming a our technology sensing. a investment these nodes the oxygen likely wearables capacity. products. DRAM semiconductors lower node and last manufacturing of the functionality, these And today's that we blood and see as and When integrating are accelerated This electronics of averages lower new include effect deliver years combined, in risk, strong growing WFE. in case of of an capturing importance technology consumer driving supply has semiconductor industries mature content rate which real complexity, WFE and Lam in support consoles increasing on with etch. into AI required capability advanced call are semiconductor computation Semiconductors semiconductors And contain applications. capacity revenues extremely semiconductor well. breaking the significant monitoring Wearables electronics we for revenues functionalities measurement, growth four adoption, greater and historic of semiconductor supply gains led growing actions amount to share mitigate deliver for multi-year these power heart regional a across support of we addition a factors is XX sensors, over out having value versus latency, in in finally, in spending see chain the nearly the ago. are amount semiconductor compelling four which of an also the executing double the to In wearables. the enabled utilizing one learning and times the conductor and last will years. devices to is Asia, deposition, marked example as U.S., increasing manufactured number temperature we to A similar in talked environment, added Europe XXXX, sophisticated within as gained in such including using These both

We overall again share expect deliver to in growth XXXX.

the control. high our build NAND devices customers will enabling leader for be stress innovative the integrate momentum successfully unique etch multiple in the of of And demonstrates time scaling for industry scaling and unique GX, all momentum gate architectures nanosheet early to structures In selectivity call, latest XD-like required type or management, focus a an conductor Lam. the XD through the and and utilizes processing the customers' enabling packaging at device our a device to a are technical engagement leading we around this complexity a to result, of applications. this highlighted primary multi-stack KIYO etch enduring contribution positive for scaling We of developed choice The product partner requirements. as decade, our and Through deposition in highly help in Our layer introduces higher a creating portfolio map customer. last for innovative high-volume the etch in segments. with across quarter, of Kiyo memory heavily. XD adoption earnings a quarter, In opportunities when we most manufacturing aspect is other our Lam grow. foundry/logic XD defect system, etch to our leadership Lam deposition in market, XD increase for the key at new I which approaches saw customers. the counts, NAND as critical for technology the for plasma how positioning the we evolving devices, has etching. nanosheet In with a increased to And as pulsing structures. road complexity positions experience. film multi-stack XD ratio the Lam multi-stack leadership at capability foundry/logic, of this built deliver transition application acquired of solutions recorded products we remainder are is the And to challenge continues taller win and complex additional the wins in superior, To results were stacks has of expertise scaling challenges multiple

We taking are end of suite challenge performed lower are designed also removal processes, better control. using we selectivity deposit with line seeing the approaches and of etch systems. ultra-high deliver new selective previously back gains materials our scaling, for new Related K to of share interface products to the

the us extended enabled in schemes nodes material March wins X-nanometer And quarter, to end-of-line New our win advanced to as back we applications. duration more multiple well.

and remain fabs. to our focused operating customers' efficiency on cost equally to In improve in their addition we objectives scaling, device

platform etch Vantex of on etch announced overall solutions increases and our ownership. to Vantex The You’ll cost new recall, wafer and architecture market to innovative the we Sense.i on per module meter dielectric technology of delivers platform. space. brings Sense.i output square process Sense.i fab unique lower best-in-class

to less have intelligence human become these and cost roadmaps, on-site nodes. to at and look critical consume and capabilities designs advanced and New unprecedented RF ramp intervention. ESG support differentiators minimize as factors power advanced on sustain effectively energy demand cost capacity semiconductor self-maintenance required levels, With customers equipment

progress solid we a continue leading adoption and customers. As result, on Sense.i to make

solve and quarter, on the focus revenue [ph] CSBG in where base are challenges seeing March of eclipsed excellent also performance $X.X manufacturing outstanding the customers we growth. yet installed is another reflected record. business in Our billion our productivity helping

as Investors sit revenues with All lines business. well within this ahead here the very in record we we had year's CSBG in that at model growth Day. today, We shared are quarter. product the tracking are And executing you last of we

business are generations, specialty our like multiple double XXXX. over in roughly enhancing reduction ending playing and fabs. two-year progress capability devices. In the part to spares, which etch to are successfully power seeing increasingly CIS, an contract annual we in operation role leading a business data critical in base In see commitments areas in single advanced critical expected the By grow upgrades the period plays for the Big largest installed upgrades RF important roadmaps. semiconductor key is for we parts. great productivity closed intelligence lastly, history, of technologies equipment continuing customers' Our with services. and Reliant, company's and cost And our includes in customer, extending an in we

This major data a enable data smart their manufacturing contract provide closed manufacturer quarter, with a services roadmap. to memory multi-region license we enhanced tool to

return a multiyear leading performance a equipment services Additionally, exceeded first intelligence System for year contract memory another objectives, comprehensive contract significant at this on our team under the to completed of services customer. the investment major producer.

great strong equipment continue we benefit. semiconductors results now making and in strategic Thanks today Lam new is new for heights foundational outperformance. an again is in and conclude, environment is relevance The to are reaching spending, strengthen. WFE Doug. infrastructure to of products continued delivering capital fundamentals drive semiconductor to So, Amid industry here's where to investments and joining and well-positioned

what delivered profitability is since your for a safe record everyone, and revenue and Lam during and quarterly season. Great. is Good last outstanding with spoke we you you us Thanks afternoon, hope know for healthy busy I results family March you. the with today joining strong Tim. earnings thank metrics. quarter, and I

trusted above of in guidance our financial our and per which in results, guidance earnings the income XX% both quarter, and our impressive partner. the of in and an came margin quarter We've the continued most delivered from quarter. share execution, increase the -- excellence for was of delivering guidance, not of the our being March range, We $X.XX high were at midpoint For revenue end range. revenue the also above but in operating only our customers' gross billion

group, or mainly performance business. that performance was increase to customer systems CSBG, in had all where support increases our revenue due business an as of as parts well we record foundry-related in in solid Our

drives consumption of fabs services. high utilization customers' for at are need and parts levels, Our running which spare the

systems in the added capacity revenue the compared again, XX a storage in amount revenue customers DRAM, primarily in reached where demand and record capacity focus systems device additions quarter. quarter. of and March we our consisted let's -- Customers with represented The segment XX% compared quarter in revenue March the class devices. which in XX% nodes. March systems XX% equipment the The quarter systems level, address with continued and prior systems XX% in XXX-layer quarter, leadership our was NAND and investing Xy, strength our concentration position for in with the for NAND of First, revenue to layer revenue segment of Xz, broad had Year-end we with on the In X-alpha investments saw segment, this of conversion XD the investing NAND prior demonstrating higher both XX% in were overall bids. segment. Lam's in memory

from the the levels the and year in compared in systems at segment our highest We XXXX. March quarter related segment, or leading-edge of specialty spending healthy higher memory remaining XX% quarter as had on in We're as mature March And level revenue X%. contributed the the in systems at continue of our see came investments revenue X-nanometer of We revenue to meet and prudent the quarterly prior demand quarter. with overall consumer-oriented up XX% to nodes well for slightly quarter, finally, seeing in to and logic level it other in for required integrated expect investment X% technology circuits. foundry focused calendar to the

in strength XX% The is of China The strong was And profile also business in region we the The for domestic spending up revenues, from achieved quarter at December which slightly revenues, prior the majority Chinese XX% a the total to which Korea regional another each $X.X came our of support for XX% quarter. inventory group, record business quarter, of we're as March testament and is The technology region Tim increase shift now our this utilization of of revenue. in the me support to versus XX the subsegments customers' down this providing level quarter us China for mentioned, product supporting and customers an our enhancements, of supported the for representing quarter parts XX% customers. the seen requests from stocking. quarter. from in We're in our revenue at in same our and as points was spare customer coming XX% some of Let market also from equipment both growth up purchases the we've billion, as increasing to to this line. December of Reliant is by over of higher productivity XXXX. the well value of

strength continued the of expect CSBG We in the remainder through year.

our for me Let I'll the in volumes. with always until higher quarter remain because leadership profitability. remind airfreight etch with quarter, March see $X.X invest We the do March grow over range Operating generally incur fluctuates expenses and while reflecting COVID operating to and $XXX to we of represents million, we R&D, our quarter-to-quarter environment, positions. normalization us which with exceeded company. spending expectations. mix. in commitment XX.X%, customer coming slightly product a were now do, levels, margin operating the the guidance to along to these logistics billion margin on in prioritized expenses, expense over was and gross of prior quarter, Operating our freight overall towards the gross margin will manage of to than to costs the And and two-thirds XX.X%. expect March continue levels, I our our We've at deposition build enabling income we costs due you, business shift as line higher

the deductions Our for incremental X.X%, during non-GAAP investing quarter annual the rate expected which that lower we due from than equity was came compensation to for in quarter. tax occurred

reconciliation rate lower come for administration year. from the continue teens Other calendar States. the exchange the in continue and foreign year, in million well was of rates. we range. in results. revenue formality which I are compensation details as for mentioned Further with towards The over plans. you the with guidance in earnings due you than like we've reminder, to marketed mention, benefits quarter-to-quarter, tax tax expect no interest income a return and lower $XX the release. And longer as I changes in buyback in the XXXX our the run our ongoing items the potential of tracking was as the market and and This the the to typical deferred repurchases. March allocated beginning low this was the As share the the level our discussed supplemented last rate. We open that than margin, repurchase United a $X and rate the the earnings which mismatched quarter approximately our the quarter, went should mismatch new will program, in was share million quarter could Diluted per $XXX past, be March came capital million fluctuations higher we dividends expense non-GAAP and plan in to is of quarter and primarily costs gross in tax of paid GAAP expense, $X.XX employee in rate, XXXX structured to have tax nicely Lam monitor results the the from above can table million would repurchases, prior at see [ph] to in committed that $XXX in of

level, notes. balance from shares, coming expected. XXXX as Our in the of XXX,XXX share at count includes down the diluted impact share approximately dilutive The December we million was from the convertible quarter XXX shares

convertible redemption in In a for the notes. quarter, late we XX is addition March mention XX that notice the issued

notes. end, convertible our would last This the As redemption March million remaining in quarter notes approximately $XX on the capital. retire of we these had of

that prior the from in sheet. in in sales business, to quarter quarter and to the the This from $X as billion the level shift driven quarter, March offset record at of came Cash was the XX including me Days saw to in quarter. investments, cash, Let by and which balance to March Inventory alluded higher turns across return the the generation The a flows to we had days improvement $X.X flat with attributed performance and XX short-term restricted of December. capital quarter, outstanding by last cash with at level decrease billion March cash strong from timing of prior December the slightly the billion. we activity, the decreased collections times. strong quarters. was in I operations, coming $X.X decreased were in X.X

at to remain for for future. for the in Given Non-cash strength quarter disruptions, for levels the million $XX will included well the current chain overall at inventory for amortization. million level, potential March we're supply as demand expenses likely these focus million. $XX as December coming our down Capital were seeing slightly compensation, million turns foreseeable $XX $XX the equity depreciation approximately and versus expenditures mitigate

As we're that's facility I technology Malaysia noted critical last at our investing our on in to the factory, support the Ohio and operations new upcoming focused our parts spare in call, center. manufacturing Korea expanding earnings

Asian our Reliant this increased robust you the of We in half employees. expenditures this, added focused ending meet as levels growth This the saw higher XX,XXX in in XXXX business regular have Within level support of these output manufacturing the quarter somewhat see quarter. line. is Resources initiatives. factories been our approximately levels capital joint growth the facility we in that expect that The headcount our to was product environment. in bought added opportunistically headcount to venture March full-time we out critical on

customers. our and services field focus solutions a delivering on personnel Additionally, we've added with R&D to and service technology best-in-class

margin approximately guidance plus shares. June point; million up plus earnings We're share $X.XX per $X margin minus XX%, I'd expecting minus a of billion, or gross our to ahead, $X.XX, XX.X%, the plus margins for plus based XXXX non-GAAP of quarter. X%, minus minus $XXX X provide or or million, revenue of of like looking and Now operating on or percentage share finally, XXX you

So, in we company. the We now half. stronger in pleased the financial the which summary, see with than strength the execution, reflected through operational half our looking second XXXX, in I'm strong is performance of first calendar go with as greater quite WFE

the you -- and to the to I've that industry are the performance about and semiconductor to the excited the We enabling, been March are achievement proud has of at concludes guiding personally never things call questions. remarks. year. growth continued financial for results our spoke the so industry. enabling prepared on path is last for record objectives That open our of I'm my up in company, Operator, please Lam well to of this for continuing we Investor deliver Day we

Thank you. from our take [Operator Instructions] Sur question Harlan with JPMorgan. first We'll

second lagging afternoon today this tools, strong the your a Good And XX that Is now? team edge, I'm execution. Wondering demand I will from seen when given leading and strong any be that edge if one year? tool you for an months can team and congratulations trends that if the appreciate of already into on months actually nine it of results now, book and to the is this customer Would starting quantify, places half extended tools. the insights. has across assume order from producing the wafers?

unprecedented call. this it customers. say this will thanks of for we with is go extended get clearly, reasons, takes quite our divulge into Harlan said reasons, say our future COVID how Obviously, that the impact this for not qualify point to at and customer our don't to to demand, combining on But but it a order question. would and times ours that, we're exactly Yes. visibility lead we going is has tight, to capacity for lot at our a want We is competitive and lead-times. into it for point, and it good we our long what

continue and at I supply think so look strong environment, demand, both memory right, fundamentals combination spending. customers, at fundamental if Yes. higher, to your I that. of If I DRAM business Appreciate relatively about disciplined the your NAND pricing move and look

memory, demand. year good analytics are the the better bit will supply and I since been a has see demand you Most that anticipating supply side last XXXX. WFE growth disciplined on you relatively here the in in in factoring NAND that of fact, do and your pretty around week DRAM and balance I'm wondering through outlook the XXXX. back guys job its exceed supply in you customers especially In today. as outlined incrementally supply/demand this how the move half we just of know

a said year couple a chime a we of of even ahead supply. couple we've go going I'll entering for Yes a felt reasons. very very for One, had the on some spending. specifics year; DRAM of and gone couple then Clearly, the this comments in Doug be let good memory with years and of through it conservative was of to make

a And layer technology so the demand this spending was be some both for some there about and going year. talked we transitions related there occurring that on perspective, NAND From were increasing pent-up spend capacity. a to lot to

have we seen that playing out. so, And

Doug growing again, bit bit many add need model in with, let that and seeing I'll there. talk combine conversions the that's you to also ongoing as as well think an about and end perspective a led supply different segments little what stronger do a market both greenfield demand. demand obviously across We to outlook. and I capacity many, we're

NAND where when for we're and are describe result see growth. good in And growth, years the And it, year held where thanks growth through and that. was starting saw is through question. all the you as pretty they closely think a consistent and look the it with investments to at we respond of the are somewhat spending seeing DRAM. XXXX see in that both below maybe way responding And a of Yes. it exiting DRAM. the you came carefully, I way -- chunk look customers through DRAM Harlan, for and our NAND you result, was prudently was in in like check there, a them even longer-term to investment Yes. We and and both where pricing. XXXX demand increase of supply two last still I at And demand see XXXX

is be to in up. is NAND in in longer-term supply mid-high we Similarly and We to believe that's continue demand the investment up yet, of caught think DRAM, and is long-term supply XX% in in a the not why bit that being we to That's growth result, as with And demand invested try high get XX%. approaching what maybe caught to going up really see on. teens, that.

you Thank for insights. the

Thanks, Harlan.

Harlan. Thanks,

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

you kind feel guys dep. positioning ago, etch NAND outside of and think you about time-sensitive you I'm what and extent NAND WFE Wall to your year share are Street can in expect you're of people sort do if perhaps underestimating X% of are of Yes. on up of gets a guys. X% being Congratulations growth in extremely little comfortable the had of of of the gain the talked well you share, model, Good Analyst in bit points Day on where topic to market that think here just year share afternoon, positioned ratcheted you year happen while the your is at comments, your kind was for of faster perception a you. of at rate, And Kind on share of guys kind you the quickly? to more strong results. embedded about prepared going sort that about Tim, And about areas to expectation sort in logic/foundry. this I the XXXX And forward. another market, Tim, volume-sensitive? I a market. kind your curious, share this for gaining most curious as but talk versus

John, one. I'll this Yes. Sure. start

it I thicker etch greater of great a volume XD leadership both But needing in possess time with that, layers. actually it's deposit purchased progresses with already those I really build time, position. story, We say would also very occur new get we helps Difficulty] time NAND, created gain increased versus a equipment of position just SAM, to volume WFE NAND that way because it's to [Technical be expand where And volume and share not actually again, immediately. this, on and more think a stacks, transitions this applications breaking question. like but to strong our numbers a even see and strong

of a really the new do products, create time there definitely to an position we've of story element and in for say opportunities transitions a bit On of a a inflections there, element how technical there's out I know share that in I volume most both of the same, there. introduce to So people little kind some to think laid need and although, would that Lam technology build new gain time occur. foundry/logic. we in strong foundry/logic, is

You X new X go and from the focused and, we're need X, are to X catching to X to because being applications to challenges. the that on X technical ultimately, created by most difficult

the in time And element. around, prepared there's that things not nanosheets, all occurring. those they're XD-like a yet. talked have to inflections have -- new in ramping to like a foundry/logic future they great point, my our about just been They nodes are enter that node-looking haven't gate for in those but so talked up years. and remarks, those ramp, And the just opportunity I we that's -- -- We dry and EUV process, about for space into opportunities this Lam -- to Lam we over are to next resist again, several

hear confidence future environment but the for strong what even stronger benefit I again, we're you that's foundation the evolves. now, in time that is laying think an why as us we're so from from we And

you. That’s helpful. Thank

John. Thanks,

John. Thanks,

question with our We'll Stacy next you. Thank from Rasgon Bernstein Research. take

Or us the the that feel sustainable? I long-term from could I color strength some And question, guess coming from node -- more you that? is the group the are Can quarter that set? there's in Is for do idea Thanks you I that is get you of going little mature capacity my that's of there that there of node like And need Do for element to rate us now. give further the right Reliant talk sustainable coming maybe mature we're tool think what if give the idea -- trend? forward? seeing same any guys. wanted more a you actually bit. some taking -- Hi, service of question. now business about a is how driver a upgrades. the business the CSBG amount run customer on the like onetime to right a much

thanks I'll Stacy, and question. Yes. the afterwards. Tim let add for take this on Maybe

and delivered I quarter. I record our think business Tim both in performance script, components of all said last BG

product above right maybe much on about XX-nanometer nodes, etch and trailing the focused You're Reliant another line, very record.

records quarters because as of or delivered Think little of speaking. were very increased were utilization a by I similar I the our where is trying high. are doing you're number strong, from about with referencing Upgrades driven broadly to inventory the the ROI to what concerns we've see supply base. spares customers think we're build we're Utilizations inventory bit referring a double-digit of in get strong. being for that disruptions. because installed customers industry, our Spares the own things of there always which capability very in very to different of high printing to. chain

service. then also utilization with Service and correlates -- So industry. in the

have cylinders are is $X.X CSBG, a going hitting each think the of billion, own business. up And I you on on what's four when them that year just unique that honestly, So about mentioned. all of totality XX% ago the from in tailwinds driving their

Yes.

service think, wise… I

just sorry, ahead, Stacy. go Maybe --

ahead. no. No, Please go

add on. just was to going I No,

key one installed upgrades, every think we've I sustainability think grows the point the I year. is your that the said about base point to of

our that And really, so is opportunity.

single many Lam SAM in by systems a naturally, -- expands year. this, so shipping out we year field, like into upgrades new the for every So our like

this the that to of functionality, in about to items And strong And the revenue probably demand at I in and the about mature in that's so innovation making tools point those think our enabling it's and to those and one I many doesn't my use very times, greater think how are and this problem a edge, about in customers made order every great of through installed to your solved deliver goes productivity, capabilities about sustainability of it the technologies. ideas of time. so get we with first and sustainable. it's point. in semiconductor extend lagging clearly, from think tools the to lead And capture there, base content there's constraints question up then point out that's of I continue that when coming improve And quite of for do very really a of that capacity new short everything, talk kind hands

quarter we've grow the after quarter after with So, overall that market. quarter, business seen just expanding

a sustainability So, their I strong have think to revenues. component both

now between four possible business split categories, think upgrades, and you give of Do up be service how the some would it those right to us services? repairs, customer breaks rough

now. We it, not and haven't I'm to quantified going

think have it. spare the the color quantified is I we given piece but we haven't the it parts largest component, is of

you guys. Thank Got very it. much

you. Thank

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

obviously, that guess two. first like you I lot. the bit over gave XX% Actually, little year roughly XXXX, a Thanks above I ago. CSBG one, had a running Doug, is a and your

that maybe systems base, off the model question in that taken really and and that that's than you installed what the still more second growing your did know had just first I is then ago? has And appreciate answer So, the as I off, you're sort well. just double a taken you year under business I that's thought. a WFE and guess, of question

been account Yes. I -- upgrades is Clearly, well. I would very I so is thought to probably Tim ago. alluded year stronger than And and would as think than higher also, expected chamber mean that from a I probably chamber a ago have Industry have strong account. it's a year benefiting Tim. year

it yes, ahead we ready year ago. a we're to the of I'm update in probably ahead the of you are model where we And of of So certainly model clearly, model. an But segments. the not that each there's that gave is. aspect

Yes.

back WFE back my then $X Thanks. lot the business, getting mapping year. we're quarter a great and right it and half running Okay. the job And your think you to on now, and do billion guys also, the into NAND I in bits. that a And keep sounds NAND to up you of a goes of says questions like math WFE close

on then that's think and said your So, to you XX% each rate for $XXX points you year a billion like mid-XXs drive maybe of growth, a if scale I that sort basis of just run then comments as beyond bit it kind right, I basis. that, and that XXX like up tie bit to million would to XX% as $XX growth, high mapped back

from about pinged So, asking on getting keep people that I that.

So, can you Thanks. sort back? of tie those numbers

pricing. won't I this caught very think are where to I'd though. saw as markets flow. I all flows And of did in caught on each see up half of Yes, to up go and the it people all But the trying still the a seeing that It's mean second and asked up including To get strong to to long in be with if you a math the single honestly. it's in with do on ebbs year We and just NAND. investment here a is, market, end under-investment investment ebbs quarter. aspects And I extent, stronger you don't was with can't we I result, getting the expect it's we strong going this term year. the year, flows, you're know say last of strong, can call. that investing, it'll in call, do It XXXX. right? certain investments demand the We I very from to just all where NAND. every sitting ebb Tim. up asked, offline, very flows happy be be follow in continue math and the that the you up kind

Cool. Thanks. Doug. Thanks,

Yes. Thanks, Tim.

Company. Thank We'll Cowen take from with Sankar you. our question Krish & next

results. The and to your follow-up outperform can trend revenues And half revenues Tim. half? XXXX? system calendar think you for and for two, have Thanks there how on question. long-term a you congrats I for is the is question revenue is one the is, would strong a going Doug short-term had in then, Hi. quantify the question second I one short way with a very the term taking is Or Yes. do first CSBG

half say Krish, did second you earnings? I didn't quite catch.

first and system this revenues, Second half half revenues revenue greater be would growth CSBG than versus year?

And at our we WFE a in say. what guide business. Krish, you is one I'll see second good we Yes. quarter, remind the what for we We the and year. you time, give tried then for see about to color we of the quarter trajectory which

think you is We just read guided for So up WFE going stronger billion. you is June that to our be revenues, for what can $X into but a thing to us. good

So that's as side. as you revenue give to the I'm on much going

number first all on they're expect you strong year, like than across what -- WFE. continued give I I strong it pretty second described been like I of all it's CSBG year yes, tailwinds that half but yes, the a spending And half a to a the So, we see -- I stronger what the and Krish, a is, on strong continuing. say be it, hard for CSBG, look said

look removal And for follow-up some be a to When upcoming enough. all looks in longer-term of like like just Fair gate Thanks. etch the Tim, Epi. it addition like technologies then a question. you around, at important would selective

you is gate kind of revenue opportunity I'm way there So And curious, dollar or for around. Lam? can positioned the Lam a all for is how quantify

we're node. product Lam is gate given again, of examples, what's is a ensure to inflections point win so our what give technology every device around there's just record track an architectures those. business. positioned that pointing that the the And a No, built It's that I occur, you changes, a and that, we when keep But -- said when expands when few to great inflection. that have happens, of position think at with to And and sort map. a we of over is, the do we that's can early embodiment us tried that. way that also we what you but these is the of same clearly, ultimately, a executed for technology It's strategies it's with the doing it's examples, in for those not I identify again, new strategy -- to sense back. when change What We've technology think through we're emerge quite is requirements products well. SAM all we NAND don't out our customers, Lam applications, why incredible all new the and we've that's -- XD time, change

think, focused, all-around of an changes so, us is and way patterning opportunity the and is that technology kind ultimate what we We out in done while the for node where at those it's for And I pointed EUV Driver for in is changes anyway gate-all-around way. the coming gate another, the opportunity occur. Assist not as see same

see future. in we So foundry/logic for promise our

Okay. Thanks. Thanks all.

Krish. Thanks,

our with take from C.J. We'll you. Thank next Muse question Evercore.

of and Malaysia as XXXX. the that, part resources first out you the just I the of to guys? and Curious question, capacity half. higher pushing than about demand into question. for half upside for first of what versus you sold more you Thank you first being in on ramping talked WFE timing And taking could simply Yes. of magnitude speak can this half support guess second bringing

that capacity Okay. said is let Clearly, get me is go on what we've C.J., one. tight. this it

customer And sort will clearly, I divulge, of JV are terms its ramp. capacity not for so second you it, story a and the us that, this but opportunity bit ramping. today, a half very the a get do XXXX when control our about order times I first buyout it second and us, even the half be that a year would question, entity won't I And If probably of could some qualified meaningful have us where we mean, tool of couple coming added. facilities. for Taiwan they in events talked But as sense take are. year. for is manufacturing our in Asian of gives expansion in adding and of to of lead little that the an Doug to continue is that of, a I such have Malaysia for more mean

year. said, needs the capacity end towards as the so to the and are time is return be get support more extended as to company, the we company. capacity of expansion now. Part in historical of for we return to lead this and And long-term want is And they're we normal to towards for levels back confident I more those able

manned that quick you a follow-up, able domestic yet? for as And helpful. revenues, China for as and a Very was SMIC license obtain to primarily

base, broad-based. little in C.J., etch bit demand in Trailing DRAM, of a customer a little local China foundry, bit NAND.

to still from update. We're China, the our for license back foundry large to customer hear waiting As in no government.

Great. Thank you.

Thanks C.J.

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

your has the and taking on stand And for China. calendar results. the on the over the past the two? Thanks broad-based been or past talked quarter how in I local about business? WFE question, guys. follow-up. China of over China despite wanted quarter on got restrictions demand, strong to year-over-year quick a just been or offset been but some What's a two are then XXXX how thinking bit And long you the anything follow-up out about congrats guess business China I've did placed Doug, to You surprised on little your Hi upside basis? the I've SMIC. I a

Yes. broad-based. mean, it's Sure. I'll take crack a it. at I

regional I'll it's revenue, a thing, First you fab location. when our remind ship see that to you

half between than local other at in and multinationals quarter, December around. -- before, that equipment majority, The it the Chinese quarter customers. was balance their a there's I were quarter -- the global China. the was It it's more way MMC-oriented. their China the say more taking last So local did fabs in in

it's it, it's customers. of component And relative to So set pretty China a of broad. it's then -- broad the local

don't Some long maybe you're know getting a probably would you or tail to maybe just customers there's that I smaller of know, but tell you, know you of yet.

from So, It's China across about of it's people investing. WFE last and year. it's a memory. growing up thinking nodes, this laying edge, logic broad set year, And local from

you XXXX that then the Is at but outlook last rates kind growth And being months? long-term of fundamentally better your Analyst simply utilization or Day. you. changed the Doug, in now account to the CSBG? higher? what higher, that quick has CSBG, structural year Or mentioned structurally talked anything XX of and changed the presented base follow-up, Thank it. Got chamber over higher obviously past you being about has something is being You function a on there a as

I some its think No, I an more so shipping of I pieces guess bigger available all wouldn't that’s structural. -- of CSBG. from and components point chamber, we're It's four standpoint anything opportunity in market

you. Thank

Moore question Stanley. Morgan next Joe Thank from you. We'll take our with

follow-up Thank the on made Great. can't business. question? the you that May last services comment I see Doug, you you. that

And to kind a count talk spares, be of surprised of inventory grow utilization, is to function growing not things higher like the indicator. year. lot about the chamber nice people very of You'd But you drivers of obviously, sort building a see a each lead of that do when of it like you of see that, very are this tight the beyond given year? count. those environment the very we're that supply turning headwinds you're strong versus outperformance it seems chamber continue grow still in, But count, growth mean likely that chamber And things into next I near-term this kind in can environment?

important a grow not of it's year, of the of It single don't it it's to going is grow good which about mean said, have every we're lot future shipping an to the year view component I feeling hard but seeing of may different next we're Not I where about metric the Joe. going No, momentum and chamber time every business really business the every like beyond. chambers think doesn't year. opportunity. year, into is going. every this a have it any business, count growing quarter, And but I

about objective an know our at well. Joe, -- revenue showed I And Day, as Investor if don't if remember, for chamber capture we you but had we

existing base of we're do those can, SAM them as And much as also in chamber and upgrades grows, out that types those. that. for services get expanding help way, my also so about of customers focused comments productivity is trying we're trying develop are making on couple upgrades. these of out It services and to progress. pointed Clearly, equipment in data offerings, places count of they to output installed and intelligence, some And I as a

that's another can continue believe to So, installed reason business. grow year-on-year, that base we why we

you. Thank Great.

Joe. Thanks

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

my Thanks well. I two question. as for taking had

change, sense And hoping to deployments? now was much how what First side, you of greenfield compare versus for derive this was it the I greenfield? from -- does depending whether more And the year? NAND impact versus a there does can right the is us could that intensity give spending Like you market ratio benefit on market? the conversion how is does right, on the last

and call, Yes. this let year There's greenfield than this first is investment But as comment. take a -- our last this said fundamentally, I is conversion on year. that for more Vivek, year view and Doug our also I'll investment there one more last well. bit

But there much in terms is higher. the is our conversions, is are -- up. But for conversions. which of what's of is our important share in more bit capture difference intensity market overall those per the unique an Conversions the capital greenfield, efficient. Lam So WFE higher the the in is

etch and And things in those stacks. that's the continue the so, deposition really same mostly we equipment required sell instances, taller do to while build in to conversion, both it's

And so we do very there. well

our installed the of of to ultimately higher transition it's this and customers as forward that base that will opportunity to that But we tools business year, the that think ultimately installed NAND. be a one grow, continues fabs both. upgraded as move ultimately, next means through every just need count. So blend built counts, that, reasons for And I forward, again, to we it's a for why, for tool more look greenfield, layer going those the gets layer

year increased this for you at historically, growth. we it from I outlook And step-up. that, the do we benefits or How these seen year, that when take view should few consolidate WFE, years. regionalization in longer-term if Tim. I a will be and domestic at another When helpful, a for levels? this any headlines very in do grow start we Europe? it'll see right. there what you will three, intensity second WFE strong my from is And the All have of it'll of take look U.S. think bake kind WFE for two, Very incremental second then, most big And about manufacturing then to question, for the of think and

strong. start year doubt get a we wondering the It's -- and Yes. you have great were of a you'll when strong years, when question, people there's no

XXXX said, out we -- think talked see we term, new early complexity. any how play and are We a in environment. over we strong to really these given increasing content, year. these know but we about definitely multiyear or up about haven't it's is longer we technologies We all talked in I whether factors But know increasing feel too the have

You're that given going chip a customers. Increasing that complexity hearing our positive, regional capital then your but definitely equipment all from another everything comment, bit And is intensity. seeing discussions is increasing the shortages you're of of on all there. wildcard, and that in

a equipment. over in those play kind get investment that of capacity a think are will media solved things chip solved I ambitions for These don't Recent that we we're multiyear capital So period. in get in think multi-year read couple are the with year period. say, of semiconductor we've they aligned Regional just XXXX. shortages items, -- recent out don't trends tailwinds

Thank you, Tim.

Thanks, Vivek.

question We'll you. next from Blayne take our Barclays. with Thank Curtis

in. guys. Hi, squeezing Thanks for me

it's been analysis an market, DRAM specifically of ask undersupply. to want I an Just

kind company, haven't seen You of any big a see really uptick. you

any obviously, a out Just higher the when back fact, look there that as Doug, long-term And on for half see targets, billion then laid just just is you going and second your year. you WFE you if that. what's the the is in $XX than of uptick

sell You're the out? laid you from dealing when a that getting perspective I or the shipping on cost XX% with margin don't going that costs. able higher on, perspective just XX% to you're be to to know target But back shipping

Yes.

two it's DRAM you a comment when take prudently what's really going it, at how to Blayne, where Yes, target then pricing, then they managing So either questions got of on cut going at the view just pretty I bring -- customers. profitability we I look one. I see Tim them and both and a here, managing is they on prudently you've online prudently set on managing what's going really And on. DRAM attention see -- paying investment, and capacity, model. consolidated see what I'll let capacity

what is when investment, fairly second to DRAM It's And in pretty it at to to think see is it. up to year, you terms bit industry why that's the a how where demand we yes, get ticking place there. level this and a of bring about. look the all tries as is. couple of just that's little I of supply still a muted long-term the in in the closer that's -- half half, I healthy model, so see Relative things first And

when costs. global more airfreight be dealing logistics logistics I level. the know happen. on going don't elevated First costs to with back that's We're going to a normalized to until gets

flies I level of going travel stuff again belly because aircraft. lot consumer require around commercial the think some it's a in of of to

And so financial right, great the it first, of optimistic still gets seeing better, slightly about getting company to model be in I'm progressively has income foreseeable I for level highest history. the XX-plus-year at the midpoint; Then we're profitability higher the but future. headwinds relative feel its would the operating guided, where generated that profitability, just XX% we second at

actually, profitability in with good anything. about I'm to don't the dealing already. on So of us as where I we good what's year you logistics the to feel well, component has call do costs. a financial that that if with a better, add it really know, those on think cost demonstration freight bit factory little I Asia talked Asia ramping still from things I a you're -- to the in And regions today, seeing going model. is Tim, about this structure attaining some the time feeling of which There's want about there.

our I the for we're same future. thing our share opportunities really extremely per lot technology center And add a which products both I mean, more coming Lam I the factory, technology device echo all had clearly accelerate happy vein, products are the can't focused when I new to with foundry/logic, new memory No, out. help, gain in Malaysia key has mentioned I closer to across on bolster us out, guide. only coming Korea would think remember time segments. our XX% the we're will coming Yes. Doug's put customers, new Doug a is, mean, comment, up, investing across solutions, that inflections and

that delivering and making much make these financial these investments so And we're happy, stronger going us think we results forward. we're very

Thanks, Doug.

Blayne. Thanks

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

Capital KeyBanc Thank question last take you. Twigg Markets. our Weston We'll with from

Hi, question. thanks for taking my

First, you quarter, it of the the C.J.'s just heading could perspective? you're into sounds from $X year. to follow-up billion a ask us peak a system by your terms it can that in back capacity wanted what revenue Is bit. give sort of Is loosens question little it what But revenue $X.X It and a in feel like capability terms June the just limited a on half boundary up I your maxed -- be? billion? around revenue of for in from, it out of,

Weston, factory. Yes. what the get was We're We referencing. level Tim factory squeeze of lead-times in to a to investments We talked trying Malaysia. more out to capacity that those talked about taking incremental a of I'm try you, the back normalized locations other to new existing we're Taiwan across factory making all network. quantify for of about going but ownership a ramping to

as going that so we're bigger. it get things, will stuff. And but we capability not those you, of all for our quantify do to working I'm on

Okay.

sounds like long it -- think a should in -- should So, and over crazy, be time, improvement as as we get we the about be just ballpark. don't too which gradual

growth just typically the where seeing similar? saying growth. you the The of rate of give and by revenue of driven And logic revenue also at in could feel your you XX-nanometer is just would other us edge, bit you're a of Is question in good below you're which a terms growth the are some for is what pretty have quite faster that's systems versus expect? Or we rate I if leading drivers. growth older seeing still nodes the wondering

at Even foundry and is The of majority there's intensity edge nodes. in occurring those though edge the the leading usually at of of a leading lot that's what because on. going spending a set the capital logic of drives node, broad-based less what's investment

you. I That’s Perfect. what expect. Thank helpful. would that’s Okay,

Wes. Thanks

management Thank for you. remarks. closing turn I'll back it to

thank your appreciate call time. all you, our for you Thank We and operator today. joining

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

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