Lam Research (LRCX) 20 Apr 222022 Q3 Earnings call transcript

Good day, ladies and gentlemen, and welcome to the March quarter 2022 earnings conference call. At this time, I'd like to turn the conference over to Tina Correia. 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

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

a per of severely and in share $X.XX Lam Tina. revenues reported earnings you, billion Thank supply-constrained environment. of $X.XX

very guided in to am deliver I are that demand equipment for While we our a environment not disappointed services. ranges, and performing able within we results our better strong were

challenges chain including new exacerbated already with an emerged, lockdowns, component situation. stressed that with supply COVID-related along along shortages, Continued

optimistic. timing to output a larger original recovery expectation result the our be range Lam. In have focus intensified the issues, the response, for of across As of we proved of

to both committing term, We are long-term the tool priority customers' as financial in network. resiliency short increase of supply our needs meet as the well workforce required and our global resources the

employees, Our recovery tools on additional have accelerate to partnering shipped. our work thankful I qualify efforts assigned the Customers suppliers to we at engineering collaborate to design Despite face, shortages, experts resources with and embedding parts installation customers us for improve key still increasing tremendous field and issues resources from once on component span sourcing for this alternative Lam of am to supply more challenging through are suppliers, and chain our we suppliers from Lam period. the to efforts flexibility. to

While in supply on are chain the we performance result near-term that in of will our assess, is actions basis. difficult our progressive confident recovery improvement go-forward a pace to

in his exiting revenue quarter accelerate deferred to of this over quarter March deferred will tool prepared due revenue as installation, within balance recognize on certain systems Doug Our revenues $X the the lack could more to the customers was billion, to the we critical not elaborate but remarks. components. shipped

On environment very demand the strong. side, remains the

flow and potentially see is view range. into limit fabrication still billion be $XXX supply-related XXXX in our $XXX how continued year. unmet could wafer executed any current demand demand in While next investment delays We XXXX, WFE equipment in billion exceeding the can much unconstrained should

seen foundation we a driving all due per in contribute year-over-year see demand DRAM drivers the in overall around the in range content year. advanced can semiconductor In enabling segment, powerful sustainably in is to markets, growing for NAND and installed of drivers our are that and performance fact WFE XX% of is increasingly required from Greater On top manufacturing average may investment also unchanged. secular complexity the to exceptional transition for win levels. for critical XD leadership of growth in and are to smartphone larger Lam-specific are setup of be inflationary-driven base die the year-over-year, are confidence strong rooted this the pipeline And increasing fabs with well is units example Lam's a position technologies unchanged. content servers, our this, memory, DRAM devices, architectures sizes evidenced deposition in the by rising in XD continuing and scalable in healthy WFE device the long-term services, semiconductor consumer to growth content foundry/logic products prior server Etch more Our and content, softness XD with in flattening positioned key an leading-edge growth worldwide, at unit spending inflections. we XX% technologies CPU where higher of outperformance. be to the and for new both but and WFE. An device packaging. solid

etch front, across technology deposition device segments. the and all applications winning new across are we On and

We and productivity. device by manufacturing are structures, solutions market that performance increased aspect enhanced higher delivering our strengthening ratio differentiated overall position enable

leading customer. set a to faster of tool quarter, selective large historically has past capacity large the the This our market, the we enable CSBG innovations also gains in performance the In we data deposition, highest our they continue result are our years, customer system for scaling gate accelerate our the etch execute at At significant the helping to win for we [ph] peers. metals foundry/logic key nodes. to utilizing like step roadmaps. March we move one that calendar see solutions are And In we adopting Lam's vast in thereby solutions applications our like these Over devices more node. is quantities foundry/logic wins our they and node. two installations. our solutions, expanded uniformity In both a in foundry/logic performance is time, part our traction foundry/logic a a we in address to due In are by in business. to conductor on deliver is At under-indexed. Lam's dielectric success Key Equipment leveraged our another their tool cost our addressing node. best next improve the success to replaced Xb Equipment critical foundry/logic as exceeded leading-edge tool CMOS to customers' total newer successfully etch advanced by base transition have Intelligence have with at customer, at customer momentum yield, it to revenue growth foundry/logic expanding technology conductor metal their their where Intelligence the installed we offerings example, double same ability improve transistors, constraints we as share customers' our etch to the new in etch helping DRAM our new high-K DRAM, Through ALD of to have wins a requirements and opportunities. where and our enhance and were of wins added performance product competitor's

their share at reliance capacity enabling their and our March In applications customers this the critical two our node. where a global nodes, In demonstrated to applications. we also for transition in solution constraints our size were for won wins next-generation expand. set to spacers that due a the down a we Shifting low-resistance is thinner a further scaling. we etch on key As segment secured device a supply contested critical the for CSBG in ramp leading support superior impacted films a NAND power our spacer enable In DRAM these March quarter, film deposition, customer to to quarter, highly customer large and predominantly segment, lower-capacitance for decision business, businesses. ALD Worldline modestly results at critical the upgrades to

a installed period for our offers fluctuations, revenue a stable we While over to CSBG longer is base subject growth. quarterly believe expanding platform

the exceeding with calendar two another fairs quarter, for secured During XXXX business. IDMs our to growth $X see be We largest contract world's contracts the year CSBG the March billion. amount strong year cumulative we of at

So, initially but issues expected. breadth the extraordinary is challenges, progress overcoming emerged taking supply have are longer making industry on believe to wrap-up, we than the we of that we

chain, meeting With on strength the have both EPS our recover environment solid Doug. that, do demand year progressive needs are With and to We in customers over equipment critical post expect growth. our another financial of the to revenue we Lam of supply workforce continued improvement I'll focused to required as in and the possible. as resources turn and committed and quickly it

busy afternoon, March earnings ranges and Excellent. season. results Tim. during a the thank Thank I within everyone, financial metrics. our today call you guidance what on In we you, all is the know for our delivered us quarter, XXXX Good joining for

all numbers. missed the for we However, midpoint

for needed well ability our as discussed, we these shipments impacted $XXX shortages we're profitability. grew we've hindered on constraints. experienced and Delays increased tools in revenue we of supply by of negatively our shipped. tools the magnitude as objective revenue Tim experiencing, spending critical that to chain led securing focused parts part on As Deferred to initiatives issues as impacts our to of recognize over meet revenue degree that revenue our million. which broadening increase ability that the heightened reflects to our actually The mitigate our

increased can that demand procuring see. that parts to we in the meet also we as we're unmet Our the inventory growing balance building

the the headwinds On see address well the higher second as resources challenges for as from have to prepared margin chain we we supply half. the adding in to side, be volumes

were able operating offset Additionally, to have through supply-related headwinds management we We the partially the expense inflationary pressures. margin during quarter. ongoing gross

closer operating As the constraint We share June see of earnings our and guidance to a ongoing in result, our to for per cost impact and came supply guidance. midpoint challenges continuing income March the quarter.

sequentially with of the quarter in quarter from March of billion, turn and the now stronger primarily was of led well during were from The XX% The than quarter. node was This to X-alpha prior we level by where higher Revenue saw systems level in The me additions Let the This at XX% The prior the XX% with was and December conversions. segment a strength a revenues. we revenue, of segment Xz quarter. in the company had systems concentration quarter memory our percent came as the that as quarter. revenues. revenue in revenue NAND the December XX% the our systems concentration was DRAM memory the up DRAM XX%. quarter. segment compares the $X.XX of for record of decrease investments for March the a for at XX% in of details

advanced as segment timing systems segment related XXX-layer In Logic/Other foundry, March customers a to customers quarter March of we was our comprised fairly node and in The NAND year contributed XX% The our segment, comprised XX% XXX-layer computing by as strong to China. as through progress the are investing sensors of I of would the XG. device the for respectively, in domestic AI, investments. this The balanced There The expect the of in Group was in revenue total for IoT, address also concentration is seeing which higher our customers revenue to the to was XX% and March We're prior systems requirements notably XX% devices. and X% our here, the mature investments at X% that revenue. in China our in this quarter-to-quarter dollars. customer Our revenue be drivers and December. high-performance meet region XX% quarter Support total solutions. the fab XXXX composition tools of China turn investments segment came quarter. we of the I'll packaging in billion, continued in revenues related expect $X.X the the we of to in record between split was calendar the in that in now We have regional demand calendar There microprocessors, is end CSBG increases as regions, during which the demand continues this of quarter. to decrease which invest XX% well revenue XXXX. terms locations of see revenue solid customers as and to in as quarter versus investments. Customer Business Taiwan March saw total from was down both multinational Korea see such approximately to leading in year good image revenues, of etch, a in than growth the traction continued market revenue. and progress cloud,

supply their chain upgrades Our reliance negatively across customers by March market tools. there of and continues demand line well in customers revenues were by impacted quarter the across the installed fleet ongoing Nonetheless, in specialty numerous be for healthy as product the upgrade investments constraints. as our to

in reason. levels utilization pull high for the given same seeing solid industry, strong, the remains and business spares Our for also customer services we're the

that on noted continue can will As to CSBG's expectations past, grow but basis business our fluctuate the annually. be in a quarterly we've this

quarter shift our margin in me Let came XX.X%. to now The March at gross performance.

We as increased increases costs raw driven are experiencing and rates, by a nickel and materials in multitude as of as well such cost commodities pressures freight integrated with circuit costs. aluminum, logistics

reflects maps. this for spending $XXX guidance manage quarter our expenses the inflationary customers' road while sustained for headwinds, million. quarter, of $XXX focus of managed continuing to as June our our level technology Our from cost were our supporting a we quarter adapt March prior through the million, emerging and Operating on level down environment. overall expectations levels during We

profitability, quarter. you as company's was the to also are We improve R&D XX.X%. March are compensation also operating were deploying supply lower our to sources incremental tied quarter help chain The towards Incentive the challenges. that, qualifying supply in expenses know, new resources margin

rate the was past, And tax fluctuations the have Our I've quarter quarter approximately with XX%. shared from quarter. you for tax rate non-GAAP some in will the as to

in just changes Looking that into the modeling. this our XXXX, United in to year potential discussion. we our in I'll public million States reflected monitor we capital one continue are any expect And teens offering. the given for tax and in quarter in just I in investments due expense. a a rate not mentioned income we of there, under income expense had of the the remind to that in ongoing uncertainty for quarter, gain raised that came item the changes we've be at But you, impact tax had the low yet venture the $XX December level. to line in approximately Other calendar And

were by a favorable had this impact to that in we March $X.X what more per subject allocating on contributed item. investments line also quarter We guidance venture in we diluted December dividends in execute The per the earnings shares, to forecasting that cash in buybacks equity in share. of approximately some in our will active repurchases. share is We're P&L well the quarter, the and the was $XXX earnings The an repurchase in towards set continue results market-related March was ASR based share guidance Diluted well. the market as volatility $X.XX We quarter from positively of since will expectation open billion was share our negative currently during million see June's quarter over cause OI&E the quarter. markets. quarter paid count March the level fluctuations OI&E as combination March repurchase June quarter than repurchases, share $X.XX. March was XXX deployed as which a million share to lower program. due increased accelerated during the our We during than activity. in time less

of including billion. that from was quarter spoke Let the activities level $X.X short-term just was me prior primarily return investments, capital Cash at I which restricted billion, driven $X.X balance cash, by shift to about. and down the the sheet. decrease ended The

at help March which at and from to December was in we're occurring in was March the were times. the due the days coming the sales expenses came shipments a the in quarter compensation, due we Non-cash at the level. an level challenges. our the inventory March fairly Technology approximately which with supporting XX for saw quarter, that amortization. the customer Capital in Ohio, in deliveries while some December days timing expansion prior was million regular XX,XXX expenditures quarter headcount growth were had chain approximately prior quarter an equity end $XX which facility We million supply flat million, increase supply address of $XXX spare focused to outstanding $XX the in X.X in days, XXX field the level, Also, later growth included for in of customer Malaysia silicon of for making investments new Korea the parts and mainly XX of and quarter. organizations parts in $XX mitigate approximately factory depreciation approximately quarter, our full-time the Capital people cash increase down Center. quarter were and somewhat turns the constraints, operating Inventory factory the this Additionally, to of from to from lower in is quarter. activities million primarily had as in expenditures employees installations. such the We as

of guidance Let We're look minus plus for quarter. XXXX me the or expecting shift at billion, now $XXX our revenue non-GAAP million. and $X.X June

percentage Gross one While supply be strong, ongoing of minus we customer or margin demand see constraints. point. continues plus XX.X%, chain to

continuing an one very approximately minus based of the of earnings of cost shares. execution the in Operating margins guidance minus chain. And expectations plus XXX $X.XX, reflects point. or Our share the plus manage inflationary the per finally, share to tactically XX.X%, supply $X.XX and or environment need percentage million of on count

let me things So wrap up. then

Our the our quarter execution little of expectations. March in short a came in

that with robust. While supply of backlog. consecutive limit we is sixth growing we our remains the demand high. to had continuing challenges output, quarter, through work chain is demand incremental to quarter Visibility our our March end Exiting

forward would and remarks. our foundation and call Tim our traction have opportunities solid all that in a for going questions. up the with position, now segments. We I market to to-date like prepared in share Operator, concludes strong new open

Sur Instructions] take We'll our question go Please with [Operator ahead. JPMorgan. first from Harlan

your continued business, I in taking to have But I CSBG of now new out manufacturing you period continued challenges was shipments customers' operations impacted as X% know spares, slowing a or customers full said question. down supply And the where and to to for growth about migrations. chain Thanks run broaden think challenges was impact about know to starting that a pretty utilizations. manufacturing capacity sequentially it targets? tend new point where chain We afternoon. upgrades. to the Good technology my by installed is of much out, supply your capping reliant potentially the mostly it's CSBG to either of your CSBG as

the supports by customers' assume your segment, fair not installed So, part which is that chain it operations, services to impacted of it challenges? supply that manufacturing is being

a different is I'd mentioned, reliant, a everybody up then I those which the question, differently. just just and And more we of of four business made systems. mature and upgrades is Yes, of as each remind that's kind services, CSBG guess is impacted -- Harlan, product spares, the lines, it's that the good node

at customers look the top of is you the top now base, every If to is those over systems for what installed running Lam the priority numbers of XX,XXX for and single fabs. keep inside priority which all day something

And not parts, on compromise normal to so going spare we're customers instance. for

demand leading-edge do of of be? services they chips, And it They to some as to you I the services. there's of base tool you are more We're those put can I the frequently I the parts? same other a little to installed need think so constraints in I around affected of components. they mean, spares for us have preventative for of little bit do I to would do get performance and our actually, They I constraints. determine how say Equipment what need need really using data the Systems, are an really How we have as talked services I where where keep terms all probably when But priorities about things. does communications, a They on about the here, systems. by work in to do -- -- Intelligence, need impacted, Equipment tools. tool. maintenance runs replace bit have And uptick Reliant Intelligence. do the those so ways looking the to

most systems. we're way are edge. as leading that same those go upgrades similarly, upgrades, the impacted new And are So, doing of then components would also actually the just into

it can talking we some customers to business. is quarter, see on new which priority we're impact see So, the work about with the you that call. Is put the the right system particular to upgrades to

every installed of that. kind will over grow. as the CSBG base how expand But continue quarter, explain and those to period, the affected. expect segments single I longer helps to that different we hopefully, business the get in So, grows It with line said,

always And in of our Harlan, spares, maybe inventory. the only think, would inventory. been customers We better is other because a is I thing There's hold inventory. hold some a level situation add historic I

reason inventory I Probably got we base. why part the so sitting installed bit don't impacting And think we're of believe a that's of little has there. the

is logistical your the Great. forecasted still No, Malaysia, resources got I'm also thanks support and very And given helpful. go of you've on as boosting which pretty components, Doug, That's I second shipments for then the assuming but fluid, purchase insights. situation your then the commitments suppliers' know yours you continued has to and planned, you're half. for and ramp have the and

of think all put together, You second year? half gross the like through how of this margins about that we should

Yes. I'll improve little here so we get a as as sit thing Harlan. I improve as will we Harlan, But same will always bit progress I bit it and through year. we output margin supply in don't we as we chain sit it down I and that gross I'll little today, we do today, a the said here as capability, our improve March, that year number the I expect last that right. acknowledge quarter believe ticked missed then you through and remind the progress

All right. Thank you.

Thanks Harlan.

Pitzer question next Suisse. from our Credit John take Please ahead. We'll go with

do Yes, expect March in and that understand works. then dynamic guys. of guide, And WFE or how half deferred billion year, down full guess one, question. letting in help $XXX calendar back the just the June does in me seen down? revenue for you've buildup the in about first good billion the ask you you year? up, think maintaining your My Thanks as of go deferred revenue quarter sort $X imply the afternoon by for Just comes $X the that that December billion implied me Doug, to is I flat

our again gets quarter caught to that just The deferred chain parts there there's hope through to guessing we've in then billion I Yes, supply the I some of up. things will little end already if bit we June, John, mean, benefit from I think a mean, way the in it now, work as right the begin I revenue ship grows to sitting base at was $X that. of tool, too, and need probably I shipped.

get And a follow-up own they larger for that. And demand reschedules for be $XXX significantly they Tim, then delivery above Tim. That's the because I'm placing a WFE bit if and later on? than I the just little struck orders my customers, can't want, about talked your risk financial maintaining year that and PowerPoint, a talk this its what's they're into in helpful. guess, I but billion you there comes the by, what customer otherwise? is unconstrained back being backlog and about you timing would oftentimes significant constraints create they consequence guess,

Yeah.

placed a space. suppliers, And with equipment whether it's we usually very order multiple I question. of not the So is good common a think is question that which around all, get first in I mean,

point, is to the So perhaps sense urgency. drive of to try to demand your instead a being overstated

I pointing you think kind were of that's out. what

depends the financial level. a close From either this supplied we're some Lam of that are half it driving implications over very customers. on our there have the of that perspective, capability comfortable second this talking are financial into other frequent to believe saying rescheduling ramp ensure no billion what forecasts to those unconstrained a we're if WFE that's year. driving execution year, than occurs. these up that, is, felt customers, Lam of remainder you we now and of what were, supply implication is for that therefore, that, the with when I have don't if be I are is which that to to discussions and demand or pointing is our we're close to tools little forecast the think bit we're would And there out and about even can well levels. really now We And chain there and how but to actually pushing There a XXXX. $XXX through If is capacity

And implications. would timing change depends the so that's the that – on very and kind probably much the of of it affect

Appreciate guys. Thanks, it. Perfect.

Yep. Thank John. you,

our take Please ahead. from We'll Evercore. Muse next question with go C.J.

Yeah. what idea question. Good for second get look I'm calendar the like. the to taking ramp of might trying year Thanks afternoon. an half

assume XX% $XXX it's implying steady like you If at to WFE billion billion, with just ramp a XX% of half-on-half. holds $XX your tool share to

I are as you of in the QX should thinking And the resources should recovery then have? capable pickup larger doing, so of margins guess, and progression we about a what in we how you gross given a about think And QX be one and the unfolds?

in this about Well, have XXXX, those can that around factory take factories of kind I'll mentioned, to of first talked of the we constrained further. and expanding the I year We we we – we're I in the world ramp by we as the every ramp half clearly, supply. mean, the like question. feel facilities. underperforming fact capacity in Lam's invested We're

let capacity. work ramp suppliers Doug – And We we that's the and with to confirm, investing I'll deferred at to are we look suppliers. little the too, need distinguish a versus qualifying piece additional it's up own our as working actually but and We're their being bit done. maybe revenue

mentioned, Doug actually we're year. As the at revenue shipping of higher much this rate half we're recognizing first a in than

balance. the improving and WFE shipping, also needed second that clear factory We progressive deferred output for in to up keep to year, have the So to for the entire that perspective. as billion from components to we Lam $XXX need as a show that much are ramp critical doesn't look quite revenue execute half recognize

it add And tried to I answer that. on right. on Nothing the margin exactly C.J., to thing, Yes, Harlan gross when asked.

the I half. today, here sit think I it second better in As gets

more we As somewhat our mitigate some work We these the chain and output output supply to capability, increases its of of absorb cost. capability. increase fixed constraints our

And the March, now, gets what last it wrong little see I but you told a same that's quarter in you remind I then, was better. bit I I that I'll right think C.J. thing and

for growth? expectations minimum as question, guess I that strong talked infer that, And of a expect follow-up about another double-digit Can for we you my Great. you growth from year. CSBG,

the to to Yes, I'm nicely last all All It’s strength Investment business it same aspects for going the are going We're grow just supply that place, Chamber stuff. high. in quantify very a not of the right? industry chain again little year. counts the is well. in in you. given grew are year, nicely WFE. doing dynamics bit behind Utilization on this across

Thank you.

Thanks, C.J.

our We'll Please from ahead. question with go Arcuri next Timothy take UBS.

lot. Doug, a two. I Thanks had

follow-up a is first from The prior this question.

$X.X revenue, just So if I deferred excess always some revenue, excess to about because you have deferred billion just you're the which have deferred. worth flow through going of

you that if would during then which year, that assume in of all the that systems you half XX% would you get should year, of don't, think, most at half-on-half. you revenue I maybe but grow it, the would back of least assume get back So the the like that half

just that back something year know sort if want that, grow I like what half would guidance revenue hold year, Is say wondering the you of, don't on, reasonable XX%, to for you be. of the will bit least to provide little I'm systems So but at hand the that? revenue a maybe it can our yes,

of of the and to suggesting. amount supply there, caught you it give you this it that's you're get investing see. you is run about there's that know Yes, caught to revenue shipping, right? not dance above sitting improve rate with always but it, work how in what stuff to deferred that you're Yes. always is do we're it We I'm thinking There get that's to consistent that the up the probably less described. up I the so a with with Tim, going that chain there, a numbers, number. our up is resources we're need that and making We better, very way it, much through We dollars do. what need that's with range what

could then you going then Doug, I'm and headwinds. gross one, And on the versus I break a pass because and have the or the do And down guess, Can things: lowest that? two I revenue triple question That's but have headwinds. you your break some the going And of there's costs, chain it's going on some now on of whatnot? possible question is are you guess, you maybe different your down I Thanks. this wondering lot the to pass in customers it you're to on, a XXXX since for to of just to then. invest things you eat know these can to just margin. also, to if supply if is,

at observation's Tim, to this I from standpoint in our right? margin Yes. The objectives point, that. a is, on two-plus your had this years are So long-term change we thinking profitability what model that right. your ago think about don't way unchanged

and in that Some and creating done it inflation permanent, must we're get We've We some of are we of to at takes upticks need for the and working value these right? what we for that, create get that. value. paid must paid, that continue to

Some of And we've that, these to for cost little way a beating cost got our work increases are nature. bit. back through the transitory in

do to both. able be to have We

talk doing to our help need and and in we're So little part when your a on other go this hey, customers, we part. you you explain,

about very we're So, much it's how it. thinking

now. need expensive We'll where we it work of expensive, you are it and work are circuits don't of Part cost cost want integrated to I get be. want it anything part are margins we below to and right, logistics Tim, add? know, down need absorbing where freight is right cost get is down. You're paid, and we'll paid the to to where we the fixed

get captures that for I paid No, can much value. I we think it. believe pretty do

in at win-wins rising and can true also with we era the kind in costs, customers. we period develop, find We ways of which of look this can

those the the being you you also well. it's make allows and services we out, fair feels customer the as they value cost so, for productive also out mentioning that came solutions of perhaps charge And done. drive truly operating and can the to Solutions, cost the that again, areas Equipment as again, tool you're paid the try are the things data. work some service to the take productivity good for that are system of customer on get back or like end Intelligence higher get that's Those And these can more focused for and us spares And where a And for gets of where removing whether are that productivity. on by using well. it to value paid

you. Thank Awesome.

Tim. Thanks

Hari We'll Please take Goldman with from Sachs. next go ahead. Toshiya question our

as so the I Thanks had afternoon. I Good two taking for question. much guess well.

picked curious a curious NAND, edge. downside, you The Doug, to DRAM, up lagging I'd realize to foundry can if hear? but you've the To leading in to customer year, pull the extent supply-constrained it's first one, any fluctuations changes I if any logic, or the upside you've seen speak types, different across edge, be device

strong to really foundry, be our Demand Toshiya, every segment continues of very business, memory, Yes, logic. changes. no across

seen all. really We haven't in that any change at

guys Got about business. new I to to then it. here. see as ask the And IDM Really wanted make Logic highs you nice my follow-up,

I image and your prepared I think packaging to spoke microprocessors think sensors you in and advanced comments.

a about us But to MPU don't of are I kind that forward business. from a traction perspective, extent are the think us progression be helpful? focused to the comment, etch. lot and you. And if where you customers. can I can of specific in super of there continued you realize the talk you would To looking remind Thank in particularly want market share kind in you

introduce new We've Yes, the etching, and with our just to are work about future is And past. don't I that to it's any you terms foundry/logic. in hard selective also transition share. talked an that's last -- in about I market expand And been -- for expanding to know portfolio think we time products working gave been but our a market one we specific we we've of in, node getting I within transition served occurs, because points product our our to more Toshi, products gaining every So underexposed to exactly want mean, that we're quarter area foundry/logic than that we've to of the several as talked talk the perhaps all market portfolio the been said, you're proof about of have. a the our around instance, bigger portfolio the better we're you It's what but call, win customer, true and opportunity, seeing is doing products I doing there, this we well. sure make not all try customers targeting that's on things especially and the opportunities for and think, I share. Those for is certain customers. as the that -- gate serving. true, new

Thank you.

Toshiya. Thanks

Stanley. our go take ahead. next with Morgan We'll Joe Moore from question Please

Is you. constraints the it in of saw same December what constraints Thank And semiconductors about you talk it products? I wonder the that it could supply is you non-semiconductor is Great. stuff? much are. if new or how versus

component are at pretty it. a that it's shot mean, about shortages. themselves broad-based. mean, take fact clearly, parts can the big the the lead-time one that of maybe of and shortages we've talked I I I a Yes, of ICs very -- the of long

complex incredibly are inside systems lot of a our that Our semiconductors go tools. they subsystems use of and into

a So, But that is broadening. about it. we big part talked of also the

or just our capacity of to that require in and their that materials and with into those working either qualify in suppliers. each customers where parts, suppliers found working necessary, tools, alternative and alternative types with up those fabricated of labor shore components to broadening go that was the suppliers skilled other Some parts, subsystems of itself short

those and our what throughout that moves the those qualifications resiliency the of place supply accept year. on that's can time so and And those new components, as the of rest and take customers confidence gives us flexibility new that improves chain suppliers and

that And little of had as Great. that are kind in deferred comment that, this demand. of $XXX guess given revenue million. you by my your would minutes -- made ago a a be Thank then that up And million I June, few I'm kind unfulfilled you $XXX surprised follow-up, of the up you you. revenues slightly quarter,

So, have demand in at that I overall least the thought is June flat. would

And million, there? would a quite again so deferred up missing I'm there that bit, $XXX something revenues is be with up the

Like up get that number it's whole bunch guiding That's bit, enough said. we to I I into balance sheet Joe. hard think right? the be put didn't a get I a said, I somewhat, it. I'm the on do of little not missed a going it to because just will to numbers what numbers

you. Thank Great.

Joe. Thanks

Arya our take with from America. next We'll Vivek Please go of question Bank ahead.

Thanks taking my for questions.

curious a that one, are lockdowns be I'm I into of, your playing to when think, assuming catch-up lead-times are is For a What constraints into we Tim, question Because -- of China's line long that the a I recovery seeing. any as and can So, China some start Any gradual calendar of side? the playing large these is, should guess the a side tell QX, we supply side? the this that weighted any are you the IC if long on what lead improvement role, of whether kind you're And due more is just get you mentioned you or on constraints backup on in first role ICs. weighted lockdowns my improvement? that? the improvement about sight on in to views time see real

we it that do believe your progressive anything lockdowns Yes. down we've anything things about chain break COVID supply about as the China, question suppliers, issue, of whole. a so either talked have due improvement, out new was time, Well, We in -- that an that get where in better in the obviously, important locations. we location those disrupts you and out in lose delays logistics or parts getting do of in a freight to and

past. lead built or into quickly for some year. I those outlook the this through have few and supply our that more of within impact you related either the in rest slightly that So, supply improvement quarter. broadly, did each every it's I multi-quarter that normal labor think we elements component, time more likely we what really, has feel shortage – maybe in or shortages I to lockdowns shortages really pace, used in lead times in that of multi, anything to think component that ICs, some see for constraint the materials, a Other But more were the I though the different recover it before ICs, a when long order progressive year where talked think that situation each the I as predicting from chain recover a difficult. I will But at the pace exact chain mentioned meaning the the the was about will that's be was

I'm And than almost before. in kind curious, my very on follow-up, inflation, of at pass prices kind the others every right? of Doug, better margins two doing it. gross to able industry the raise all along they You for companies, look semiconductor the and All maybe semiconductor parts for margins, been are right. cost one have to gross

costs so So raise strong what demand are in higher recovering are right, margins of I to makers at, the high? think, that And structural more so revenue prices certain these aspects the four gross and operating these the nature at prevent has prevented the from costs three recover to is to if or have Lam equipment future, points, you you in levels? along could costs? there pass do these flexibility in that should be that Like delta

improving, as things, with Yeah. output's doing some inflation done X, is that. done which talk how together. of customers have we No, And from or that. Y you haven't right? pricing and there's Vivek. Z, Nothing, like, from that. we restricts It's adjusting us us But about if nothing cadence through doing we mean, to a restricts I my not your to doing some, this need work

We have.

I that are mean, things kind to get to going frankly, better. got emerged. earlier. through paid we're in get mean, I New that The is rates stuff of have challenge. be cost. we costs what the I for. way it's more said our permanent a work freight The should continue nature, to to transitory, That managing back

wouldn't we profitability our where to We're want before, go term, responsibility XXX, back we've XXX to are doing XXX them basis points want different we're a do both level. going the any have communicated to right? and I of that be, and long think to our than in both. to We you, to objectives way work we

you. Thank

you. Thank

next go Please Research. Bernstein with from Stacy our Rasgon We'll take ahead. question

it's my But December? I get Hi, in guys. fluid and getting one, when what very quarter. actually a looking you better felt in point is guidance feel your have overall level in your do taking line quarter how I Thanks your are way the tougher, better June into in more you of and look, And now taking you to I about higher guess quarter confidence understand environment do about caution happened you are March for just guidance, that when – giving My account? Like the is, versus Maybe the guidance taking environment? prior that potential outlook versus you deterioration gave you forward, this at how felt June are questions. given you're things the worse, first a ask that environment given guidance? in your how about you the broader

never some things look Yes, numbers happen. me than in let Stacy, I Frankly, worse things the To then then We the happened opportunity. chain. March I intend miss, that risk, got I'll can is look ranges. expected what Tim try at we add. we could communicated to first our best describe in at and supply we that. of ability, comprehend

we didn't anticipate. things Some

supply right? see the the the Just task like do have and billion through I linearity good number everything we're just I what they of doing based chain I the on working worse, force gave and shipments the is feel you, somewhat all things we and got $X.X number? a I with suppliers. And do, with

number have here have sit wouldn’t I given I As I’m to today, or that it confidence we -- in you.

working We're know, that don't ensure So to don't it real what anything to and I things quarter. happen doesn't that, I Tim, you that's to can to. happened want and June, last in add expect on? change though us hard

of No, chain I to we're our and and effort the output higher. been recovering I and just would supply amount the has investment never that and attention and focus supporting ensure mean, recovering think I our customers reiterate,

and said, make that up, and a numbers and parts good so, to as think, And the go that to that's sight the that I confidence to everything we what that's of have we and execute. Doug -- plan the that we line have we needed tools

guys. you, Thank right. All

apparent right quantification there ability like obviously you do it above below apparent somewhat way have strong, Is or is able kind For you're is any supply it your obviously gap color now? and between to -- it shipping Is that demand quantify of mean, my you're on the just can you and follow-up, sitting? that demand where the demand any give to ship above to I is data? demand is the where and understanding revenue more? is deferred beyond XX% -- out

still Tim Yes. the seeing, try why trying looks why to I the ways that's Stacy, WFE -- that's annual like is actually guess, say. the though, we we so is stronger that that's because help and or $XXX annual entire what best it an in We some communicate the for on our a I That's somewhat give to supply-limited, that ability. demand much give we're than of is we're But industry demand billion, you what proxy said. number, actually to what as WFE when we're think is that. what what see would we think you outlook, you

it. Got That’s helpful. Thank you, guys.

Stacy. Thanks,

Krish We'll and Company. take Sankar our Cowen next question ahead. Please, from with go

customers since or there's I So the And Yes. It etch I'm hear kind a process do had whatever Doug. so, for get large-cap for question. seems due impacted dep you like dep first My has love buying more that. Hi. have, etch to components my complex demand this they seems a for dep impacted? thoughts eases, equipment are your your Thanks been by whenever the then So their company? Epi, your etch because constraints on pent-up to Lam hands relative supply like the to or on? would supply you're products one it of or taking think CMP is you're if control nature, is can more versus like curious, And vacuum tools a more follow-up. Tim peers. the And

Okay.

also So ours speak you complex. about if we a people's great quite just deposition but equipment, it's is very amount a said, lot good supply obviously, lot of a it's just vacuum there. I of etch lot in requirements only fabrication, control we capabilities, as gas to subsystem complexity detail and fabrication, but and a question. -- And systems, generation a other require, tremendous complicated can't things for gas ICs of those delivery you And systems. and power systems, of not high-purity mean, talked delivery line think has I chains, as it about,

clearly, And mentioned, on know are if we uniquely each But that are impacted shoring impact. up are I suppliers increases we And where as qualifying additional requirements can so, and way. of the we we're not who meet the our then of needed, don't where quality point those we I those parts can or focused areas see main find for that is and our in qualification that's capacity.

it is, long also it the flexibility. gives what us Over run, does

As I to making ability well. off increase more forward, the today the going the respond suppliers are. some will And regions give investment factories much supply in think resilience have of term closer pay We'll us have I because chain suppliers. we'll in in look the that's more to demand where a in our future, way to to to cost-effective as our this long we're

think margin, gross we're long-term the investments about good actually that from as I the that, making to so, are perspective. And today

last supply nine supply-constrained currently shared market much for any constrained take are there longer Thanks, or time much everyone But Got it, been the is or boat. so, to make is, better same share got do follow-up seems demand to Tim Tim. clearly you with? like Constrain a shifts then do in And it. you happening we've a supply it months the supply. living customers think to environment the due misses, than compared like decisions that your is

to far the the pooling, advance obviously, difficult very -- work I these do, would process it's what to Well, think is qualification of most on of customers speak the hard to but done in is needs. production all it decisions

in qualify in taking is reason made very incredibly even are think to even might feeling is this of of while And have supplier. why than an so, our It that's equipment And is far from environment, recovery why is those our longer difficult. tooling we longer I timing to anticipated. maybe to so takes is and suppliers, choices customers all alternative a everybody requalify to and output -- advance, the parts, part choices stressed suppliers, own

true the think customers I thing equipment. same be and semiconductor manufacturing for would

don't to you're market in due way capacity this of saying, these shifts So, constraints. I believe a seeing long near share term

Got it. Tim. lot, Thanks a

Krish. Thanks,

question next go Barclays. Blayne from ahead. our with take We'll Curtis Please

for taking question. two. thanks my had Hey, I

versus and the out but maybe spares this you way, you one, in and the as reliant midpoint, missed looking called source the March being I'm of I Just at miss. guess, June. the XXX wrong big by

like I down down. think CBG is products XX and

issue? maybe I'm understanding reliant is So -- biggest maybe why just the not

thing didn't Yes, or It's across as communicate Blayne, line didn't say you we because we equipment maybe misunderstood Reliant I well us. because Frankly, in one supply equipment. intend specifically We in that. of CSBG. that's to the missed constraints chain the in missed also CSBG as another. in new for upgrades product board of

communicate. it's that's is not maybe to, we very tried to across what what of So all that well, but we tried

Got broader you. a question. And then just

I first. to already kind seen you up? addition things out and commensurate went your than expect will -- can't with indications equipment piece a it together, be handled. for I I'm everything just kind asked, you've and haven’t you see can I'm like of to this how chain you the assuming I in right or think you each customers. I'm think that don't know And going try you they've one, curious supply of you constraints. this curious of company everybody's they'll curious, terms out do problem the can is on the equipment get? the as they kind asked they additions just lines they to take try supply of how well. the whatever Do I'm question plans capacity to just their And pushed is to are going last only figure quarter don't just any be to capacity everybody massive if push

change we've we guess their receive no for the to I is demand original to in answer that, it or us way simplest in pressure seen customers from schedule. to the change no deliver

constraints output of look a try why to your we're at already making I into that from talked with To services if that We so they tools to to talked their working we fab. we customers our when that And demand tools lot we're increasing exact get them about a their will want. about little tooling they because the capacity not at they on meet installed accelerated different different on more the have times, I recovery take output of that's accelerate their might investments to the at to meet can't try all. installs. like to of, there's bit point changed that's date get things think has demands,

into next I next of exist going couple. think there's will as just a couple through of these partnership move creativity we the constraints a existed and for likely -- continue through the have to quarters to how work lot that over and

Tim. Thanks

Appreciate it. Blayne. Thanks

question Mark next our go Please take with Jefferies. ahead. Lipacis from We'll

magnitude based one. Hi, capacity Do the five you fab or much wafer the about about come could on grow years thanks have year there's out for in a taking online, my have? just debate wafer capacity a going guys what today there wafers versus fab of equipment question. I or have equipment view expectations ago. how given you to is Obviously, industry this year seven next

you wondering was I had that. on a view So, if

don't view a set have have have view this a is sense next if subset year about your the if for kind you maybe industry, what for wafer or year. of wondering customers, I'm a If you you a of capacity and largest growing some

These trying occurring, wafer numbers little I aren't look in are everywhere; give about foundry, where But capacity Mark, across is would to I in caught get the everywhere, The growing well, out. tell try nearly as bit investments different to node and you, I'll mean, this are almost right? process when with up we're in every probably I logic are foundry everybody process normally across totality to things memory, maybe ICs investing demand. in node and talk year. across tight. a every get we see I

share don't they based numbers, those is somewhat we have. the investment up anyway, ticking while plans everything So, I trying or to think on

you. Thank you. Got

I do one of we'll Yes, time. question Operator, more out and we're think about thanks then Mark.

Okay. Please from Citi. go We'll with take question our Atif ahead. Malik last

year, about taking even recession macro Doug, believe guys were fab WFE year? on question. and GDP I going With next in all what for talking growth global next you contraction year. January, about corrections next my in are the curious thanks Yes, wafer scenarios and equipment thoughts with your

semis kind industry, is of thing. softening is time. the more units strong don't still is in more do than the consumption very a Yes, thought. PC perhaps different we one a I bit. little we aren't as as you've of year look do got economy the when strong. mean, computing Atif, at probably you Smartphone same observe across consumer-oriented of the reasons. semi probably High-performance know a in we clearly, all softening And variety for I a

customers happening. everybody in sales guys steam of and Tim So, with investment of terms to the full what it's plans I ahead our talk though, When equipment. their is kind see

So that's going XXXX is to year. year, at stuff's what into want you But what see. going I to I this next quite roll tell I'm that know under yet. that shipping customers not we're fact the

We'll as through So the get little year. further we XXXX about sit tight. talk a

understand. I

using tools and your I Are materials? the the your As and get availability your from and etch – you those seeing have material a coolant or shipments customers impacting component buffer on of shipments impact like materials is are constraints. neon those shortages the supply subsystem deposition to follow-up, enough

that, haven't and issue we're new identified But up as far, every it's so that far, But impact. watching obviously now. issues – we wouldn't we yet significant those its I assessing say would So comes right constraints. those key as identify

Thank you.

Thank for us Yeah. today. on about Operator, joining call Appreciate time that's it everybody Atif. us. for you, the

and gentlemen, concludes appreciate We participation. conference. today's Ladies this your

disconnect. now You may