Lam Research (LRCX) 20 Apr 232023 Q3 Earnings call transcript

Good day, and welcome to the Lam Research March 2023 Quarter Financial Conference Call. Today's conference is being recorded.

At this time, I'd like to turn the conference over to Tina Correia. Please go ahead.

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

we'll little results for results detailing afternoon. March business Time call, During the on outlook and our after was the Pacific our The June this review financial we'll financial XXXX XXXX the quarter. today's X:XX our p.m. environment, share our and a for quarters distributed overview release press

found the today's subject presentation include for accompanying see Investor SEC be presentation of also in Company's website, the the that in section to slides Q&A can with the uncertainties our reflected public slides the release The filings. are information. on and forward-looking additional presentation statements and call. risk Please Relations risks in along factors accompany that Today's disclosed

results found p.m. website. our unless GAAP presented Today's A to be can otherwise financial this X:XX accompanying call be last presentation. is later until replay A scheduled our Time. This a basis afternoon and detailed made specified. discussion will call reconciliation between will slides in this in non-GAAP available results financial on of the Pacific be of the non-GAAP on

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

and progress our with technology specialty our everyone. guidance. demonstrating system leading Thank revenues, you, Foundry-related all levels, Tina, results the both execution quarter solid of midpoint welcome, achieved edge operating Lam's segments. EPS reflect strong March exceeding margins and in revenues and record

near-term spending and technology maps, support managing transformation investments operational while long-term in continue profitability. prudently prioritize road to We and customer

challenging. indicates, guidance June remains our quarter near-term the demand As environment

primarily mid by in be We range, additional expect demand. partially offset to spending customers, with memory low XXXX $XX from WFE billion domestic China-related the to weakness

mature and to October a us On rule logic the segments. incremental to U.S. the notified clarification China. we last governing node memory exports of Recently, government strength in the front, see China issued

we that our certain us notification allows ship had expectations. from originally This products to excluded

expect to of output the tools ship in levels. conversions second customers Memory down and continue fab to bit lower slow to investments inventory these drive technology half normalized We to limit additions reduce in utilizations, capacity XXXX. Overall, and

to by We from expect XX% year the NAND. spending and led approximately XXXX, decline for memory

the XXXX in in low the WFE. adoption considering of We of spending storage especially regular is long-term and applications at Xx Memory content a bit support investment Xx still approximately percentage demand, stages growth historic such this and as unsustainable a in of believe to can DRAM the early total of the AI, a is are as data-intensive level have server.

advances addition, are architectures technology process in sizes. In memory die evolution as DDRX and larger such driving

the we accelerate, from trends capacity, these tools in but memory, leadership not also to installed only to our investments outperform benefit upgrades of in base As positions tools. for large us Lam's established new as from technology

close installed base and to compared a XX% It memory last customers when to back Our for memory to the convert valuable has next-generation normal nodes. platform lines to to growth cycle. increased utilization existing levels, begin for ramp is down

memory manufacturing strength. when and intensity overall the of opportunity. importantly, this to growth benefit our complexity areas more conditions one stands While of Lam's Rising both capital Lam inflections improve, technology to clearly for positive key product is is tied aspect

processing For scale. example, investments significant EUV devices new has patterning where in atomic and made at important Lam the gate are for two all-around inflections products

we us. are with for it ramp yet new traction the they in front Lam. is the already look of multibillion-dollar in stages of products, these If are of the a patterning, at growth still gaining opportunity majority We with early

photon smooth exposure. EUV broadening to adoption been footprint edge enhance of well-defined by this as and segment, are with our in a EUV developed productivity minimal solutions creating We have leading Lam's share EUV scales. position we have patterns

etched track reduced Our is resist etch close particularly EUV stress strong the patterning thinner is influence width problem nodes. into in of properties plasma challenging on XX% film hard the pattern Also, has applications. these which capabilities Lam's win of Fidelity. a and is pulse at portfolio hallmark films line hardness future EUV of help stack, the the become on to a as control films. Precise a mask our as to deposited roughness, share is film Pattern

with are continued record adoption the for as critical in EUV EUV for the segment tool applications process logic expands. growth We of already foundry expected patterning

scalability challenges our and a customer. adoption dry EUV our goal development first central we by underlayer resist the drive plusses Last EUV for memory is behind Addressing of saw applications also technologies. the year, major

calendar progress to and another provide solution XXXX. quarter. our resist memory set second logic foundry to Today, I'm drive a to in include large update. development applications, we pleased adopt March dry player products underlayer is Our EUV these in for extended key revenues deposition, start customer for and recognizing their A the will

grow Looking resist our will every technology etch, portfolio product becoming our road particular, hard to the see to when adoption solutions, EUV pattern NA thinner even we differentiated and patterning industry's in resist. scaling at ahead, EUV and of mask With challenges continue for map. high increasingly dictates the EUV vital the node, need drive

true to transistor. what deposition the from all-around performing the introduces new requires capability to Moving device of processing consider address we gate-all-around, It logic complexity geometric be a first to XD this perspective. characteristics and etch inflection the the

architecture gate-all-around, deposition of on the underneath Processing reach device, suited strengths. our to to making solutions, take place layer and XD the just key need is usual name top that that and plays atomic are to layer etching direction. must well for a atomic implies, spaces inside perpendicular reaction inflection the of, reactors nature where gate-all-around to as The

gate-all-around the is per per node opportunity to $X to wafer transition the Lam, incremental capacity. month For billion close start XXX,XXX

at for in for is our good share Company. as Our the market this goals be our as overall expectation to least

come Selis, These tools Prevos To and Argos device in our precision. like all-around to including of launched and gate address treat tools the etch future. manufacturing etch selective the of products Lam several suite the has challenges all ALE can surfaces of with more with devices, new

gate-all-around record continued quarter of momentum additional tools at customers. applications, Our have with March for saw key customers positions multiple process shipments the in to we selective achieved and etch

is close control the critical increasingly films the very in transistor. depositing to geometries in also complex Atomic-level

a differentiated plasma Our nodes. uses films nitride and this to ALD customers radical ALD in see have Lam's growing low-case adopted we reactor ready approach future Multiple demand based manufacturing films productivity. deliver high-volume spacer and high-performance now with

working XXXX In inflections. managing are year a to tied WFE our prioritizing investments expenses, lower manufacturing R&D strengthening summary, by we and near-term operational critical capabilities through in

of customers' strong plans and to growth base, installed last of on our criticality the put our products resumes, you. remains outperform. value which focus XX% has Our to ensuring Thank us nearly when that position a the WFE downturn, in since the our grown

And it turn Doug. now, over to I'll

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

our for financial came was on cost-saving quarter, a all financial over in delivered our midpoint record the progress but over guidance transformation the initiatives. or cash quarter, flow ranges of of guidance for only quarter business results metrics. made XXXX we at Company. not great and financial We the generated also which Overall, during the our in March Our for $X.X level billion performance free we with line

the was for was investments and driver March Systems in revenue decrease move down our revenue now WFE the Revenue results. memory. quarter. most to decline main quarter profitability me given of the in billion, the XX% $X.XX Let the notably prior from

the As the exiting we supply expected, order chain our all shipments improvement completed with having in nearly March constraints, systems. of are for back quarter outstanding

levels. I at now characterize what are normalized would orders as Back

of revenue just balance expect related tools. by deferred until from cash of deposits majority and mention year is ship customers, a advanced revenue The the orders. deferred which balance convert to XXXX. However, calendar offset the our historic balance revenue prior decline will I higher the remaining deferred in remain And that to levels newer is we do flat billion. the advanced these tied impact during payments related back reflects increased the the $X we with This to the completed quarter deposits of revenue with than orders customer would

prior revenue, coming the in sequentially, us Within NAND quarter. represented details of revenue segment of at systems for X% would segment concentration our decreased Looking December The mention is XX% was systems percentage level I this the March only the memory memory December the the from level XX%. XX%, quarter DRAM systems the in of down from for Memory, XX% a quarter is at revenue decade. revenue which a lowest in And XX%. with decline of the in of of level compared quarter.

With the had and conversely, of December NAND quarter, DRAM revenue decline momentum leading was investments, node a a foundry in quarter. XX% memory further current weakness higher June we had representing in devices. than level in percentage revenue, We the we contribution mature the In our revenue both the dollar of anticipate in the systems record in quarter, positive XX%. both and March which in

And progress segment I'm pleased the we've with made in the market. of this

We year. continued are array quarter XX% with a in this March from contribution of Investments a revenue regions. node in investments and in had multiple of segment compared of logic particular XX% concentration other The in the were IDM broad logic strength the mature quarter. seeing with the systems prior

from of contribution the the had China Let slightly and me the each region quarter, March coming total list at discuss concentration the of in of a now in the Korea of XXXX. The shift was with in quarter. the early regional certain our XX% top was at domestic prior XX% the and down to Korea reduction higher were revenue. restrictions sales put up were total. in which largely and for the China from the XX% government customers December October in attributed quarter, in place U.S. Chinese

represented States, XX% from perspective Notably, a an in March concentration compared in Taiwan revenue XX% XX%. prior dollar a we the quarter XX% decreased December the level the revenues a had to of of United in of increase quarter, our with quarter. from record And which the finally, as total

totaling the Customer but in March quarter $X.X decrease approximately Support of Business which quarter generated December than in Group higher the revenue from a the calendar was billion, quarter, XX% X% March Our XXXX.

specialty XX% a at overall but levels technology Systems customers perform businesses, increased our March We and both continues negatively better business representing CSBG during be quarter revenues is utilization saw seeing given quarter service upgrade to of and model, year over market the -- Reliance me, performing devices. we're part well this than impacted resilient March XXXX. spares and of node to decline The the I level continue WFE, in utilization the calendar expect which our revenue. part memory strength of excuse mature business demand to in the

mix. right margin in XX.X% from was of the midpoint me now XX%, tied Let to decrease product and percentage performance. Company is with focused lower calendar pivot came quarter. efficiency quarter and to enhance least our customer improvements December margin year our The XXXX. in gross as well on quarter-on-quarter which The is down range aligned expand exiting our March profitability as and business by the at X cost gross at to guided volumes in to The plan point at

quarter quarter, a road prior expenses executed million. in of have Operating XX% XX% $XXX actions amount million expenses, investments spending the cost support high our comprised the Company of customers' expenses down savings prioritizing for and $XXX which were Company. while managed our across maps. the from R&D point March is nearly on in operating the of We

margin mainly management that of saving was and we midpoint undertook. guidance, of operating expense above the XX.X% actions quarter March the and cost The because

with line tax in non-GAAP for quarter expectations. was rate Our our and the XX.X%

believe the XXXX, into low with will quarter-to-quarter. mid-teens in to Looking we expected rate the tax fluctuations be calendar

income some and decrease of volatility in The to subject quarter. expense came rates. quarter the lower million to in each million as expense approximately to OI&E at $X continue higher for will rising interest be quarter. cash will the fluctuations due cause that from in reflects the expense balances $XX well as Other market-related increased prior income by interest level

the $XXX in side of quarter. return allocated share open capital market March million On repurchases. approximately to the things We

we Additionally, in dividends paid $XXX the quarter. million in

was share the XX% share capital obviously of a to towards returning expectations shares December was guided quarter Diluted our and earnings higher down free quarter. on March We long-term and XXX% cash our than continue plans million range. return little of bit lower $X.XX track diluted our flow. end the to track with of XXX count at per to our

days XXXX $X.X investments, the of cash $X.X sheet, quarter. allocated billion cash quarter by quarter. short-term due to XX in largely end December at an the restricted balance to and collections totaled Days sales of December in from the increase the offset the from capital XX share and including buyback cash increase was outstanding March For expenditures. March at the billion up end The the and dividends quarter, days were

quarter March ended inventory X.Xx, and with Inventory we balance. turns slightly the to dollar prior higher a quarter declined the from

during the equity manage to depreciation $XX continue $XX approximately million will the We amortization. quarter inventory in for for Non-cash expenses included calendar March balances million in year. and compensation

the for million, March million. down the for $XX and activities. quarter Technology approximately expenditures the were Capital March $XXX development mainly by from our Malaysia December factory, were quarter level quarter product Korea other investments Center

As discussed call, we January had approximately workforce within we March reduction in a the of earnings quarter X,XXX the people.

we million, to XXX higher seniority somewhat primarily our estimate original incurred impacted in somewhat actions reduced We was This level. with for severance-related workforce $XX March Additionally, payments. quarter workers. charge a temporary the than a reflecting due of people the approximately charge more higher

within projects Company rationalization transformation of anticipate we'll the slight decrease which and year that in We is to product also the we incurred XX,XXX the improve in expensed quarter. the calendar inclusive one-time our March with and We of prior the a $XXX charges $XXX investments approximately decisions is prioritize million incur regular costs as for full-time We other technology range and related March ended the which within to XXXX employees, million systems we one-time costs operations. quarter quarter in the for in quarter.

to Due won't head of count amount until of headcount quarter. and quarter our June significant restructuring our undertook the actions, timing we the be reduction the end in reflected number a the

guidance let's June Now non-GAAP the to the XXXX turn for quarter.

per plus or X environment or of $X.X X operating on XX.X%, minus or the reflects sequential that $X.XX Gross earnings million. or normalization quarter. a share point; minus occurred of shares. percentage minus in million back count of revenue and The decline of percentage plus memory plus XXX margins of approximately and expecting are minus based $X, share margin point; soft finally, systems plus a March the order of We billion XX%, $XXX

with XXXX So accomplishing backdrop. memory shipments, let but then against we're summarize. pleased me for to our challenging be a this I'm proving is challenging environment progress the

efficiencies. We continue leadership and to focusing make technology progress operational our our on growing on

emerge spending appears we WFE from is the this this little efficient of mentioned be will second company. positioned, that half weighted. I a downturn, closing, thing. look We just now year, In bit one at more memory-led profile more to stronger better as it

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

Evercore. question C.J. come Instructions] [Operator The will from first with Muse

deferred quarter, to about this normalize trying the first I talked in I call, you to $X.X 'XX. revenues. get the think deposits last guess billion question expected you you would then on to Exiting majority of be and we'd these revenue on there, said calendar whereas

you contribution the the what moving quarter revenue there? guide come parts kind deferred line? will from And can us in help understand June of So a

extent, a our I the back Yes. was orders. cash deposits being little bit I would got certain expected. The bit Offsetting up C.J., than some is in a that, last you. little what tell wrong more and a quarter bank to of customers from we ended newer decline

when any I we in in was like of quarter, I part of around think going if the second I in told But give a year that a revenue up during that said, exactly the I think advance this would you to didn't it I is majority of I normalized 'XX, lot level cash while. And for the don't shows got deposits be whole half. little June X.X So clearly think be what right. will calendar the it. that

you've anything changed? first has WFE half. certainly kind helpful. that weighted. And a seismic more in the seen a be do revenues and cuts guess magnitude just WFE guess half think I the your follow the the you shift. second revenues that, in about deferred Or seems of the if being you as than That I the else up guess, half? comment higher, higher have little bit I suggest first should that would And benefit half Okay. total of of that is nicely it second Very last second on half to then around like

has higher, what mean, talked think year. June commentary with clearly, our to on I quarter that weakness I a the effect the I do about weaker bit came into we we thought probably little second C.J., Yes. being been incremental than something as half we think that has also

And a in up that is make so, spending. it half. well both the we're the think I case That's the shows half, first what some here customers in of utilization continue tools to aggressive of adjustments, back overall of pretty as seeing as

half talked second occur with in anticipated. that be also the weren't restrictions, about fact We China originally the time on would shipments the that clarification through that some additional there the

in So WFE that as the with does well. help second half us

question from Timothy next come the will UBS. Arcuri And with

take earlier given coming explosion from of if is? they're China Applied and comments your can today, into in all edge. ASML How they're they get, them you restrictions like obviously, Tim, feels lagging sustainable the this which now with taking I huge just and I edge. do money what sort this of pouring kind demand their is there's combine think lagging It

worry something So Or that's going there on that that? real is that not sustainable? there does where demand you backing there's maybe

consume Well, one to a create have trying they and demand. I manufacture in region, real build said, you all mean area I I just that is think, demand of I as as semiconductors. regional that it types also is capability the China, have there And believe up to to they capability this to is the every mean, that well. ability

I in built, us the I self the that's think it have from bigger impact regional it's self-sufficiency call a But to that demand resilience is or in industry. going standpoint, good on I a sense, think, regional spending in being so long-term -- this and think for industry. And for others

news game talking We're play not or coming both of sustainable? think that whether have or these And cases, recent positive specialty assessment these in have the segments a able that industry and impact the of not up. that they across is it do to European not on are that I spending to And our and to it to to new going some but ecology invest trying so be some trailing the chipset, time. they technology. sort is we're I our and customers, U.S. is only with the chipset, if not projects think quite on are something for this leading-edge of own We will it's

I you been to more Tim, of that to ship on color clarification said of then can just rules. -- not able ship be guess, export or an past? And you can you the provide was example what Doug the assumed now that there's in some give Can

the issued staying what exactly of with very It's same to X was terms compliant in October on clear as We the be limits. rules Lam the want in technology restrictions.

$X at determine be the clarification why for range. looking the impact. billion were guidance the in to so, billion we a made. had That's And said how year, there on whether were given could that $X.X was shipments we time some we of there We for knew to

printed determine that rules you with year. can if on those and now our are exactly so clarification was the what But And tools we've back at how forecast look it's can't there, X. the October ship, that what you on added into

for revenue put Yes, it's we hundred for Tim, million as around dollars, few I it, some to Lam. year look think, at just the a numbers

Krish question with will from next Sankar Cowen. our TD And come

a strong just China the do of I together like trying constraints half revenue a quarter like a put then your back it quarter demand have relaxation more from WFE shipping should China. into Doug, start to loaded June the question. a China comments just of heading improve And I for assumes you on up, all that the standpoint? in as lagging gross And the some and follow-up. follow-up China? with margin from Is one, is you back first trough

just it's confusion are sitting if the And Yes. half-weighted the that second WFE in there's said the any clarify cash deferred I mean, deposits WFE about is there, way, and advanced Krish, what I by a I that's slightly number. year.

Krish, well, just and believe think, doing cost on. view is yes, second where do quarter part we're weighting sort should we I that. point are. we gross clear talking, when look second that the structure so least that's what So about where been we're trajectory half the I at I've what as percentage everybody's And a how the with we're margin the of that of then, exit at that than about I do, year the higher a we we pivoting still

technology Got question it. Super for helpful. And then a Tim. just

about ALD. ALE curious else technology someone slide addressing And note? to gate-all-around. incumbent had gate-all-around, in any because a ALD the why in is is International opportunity ASM customers issues versus are Thank of spoke there you the on leader because shift would you. You the specific incumbent your I'm and ALD gate-all-around kind of and just or that Is that is the

ALD introduce. a in based tried Krish. the of -- over question are the and and different a tool can number the as end, to performance, tools new I reliability are point guess we I the years, these because It's a across And And on is deposition ALD types of what think just lots capabilities, to films. in I the think speak specifically position manufacturing, very is excelled, And to have well. challenges select Lam good customers productivity we factors. we Thanks, has that strong the in areas of types different I of film there

will next Joe with the from come And Moore question Morgan Stanley.

how bigger, kind side? tool And actually as what's of numbers? as business the March some Can the I keeps from utilization is mentioned sense getting looks talk in impact utilization a within us follow-up, from what the saw those you couple CSBG CSBG of more lower you about can quarters? in Are seeing of think -- for some on the memory much of you you Reliant like give impact that the on next quarter. presumably then Reliant you

Yes.

customers cuts markets. hits a different heard me throughout industry and Let the crack years. clearly look tools. segments term, the take up even as of a last built the money business That to the burn the of obviously, services our also at idle lot they save have memory mean, in near couple utilization the some inventory They the within off about I some and of might you've spares utilization. the over

up on Eventually, start its runs side, especially our And be memory -- to so see WFE. improve you'll start CSBG. and to the higher to showing CSBG in that before likely us that's much is there's expectation you clearly talk see that course, revenues long about going

And CSBG that's because start tools and back increasing. see online, revenues those bring you'll customers will to

You'll then also see And off base increases that customers our installed start in to do been some also ultimately of up see the in of kind revenue. CSBG capacity the finally, will additions. technology for doing WFE show upgrades that holding they've we in then on will

we'll it, think I it frame of to but us to on improvement CSBG. bit cure And not we'll time year-on-year, low continuous grows is CSBG utilization get just kind so, I it a causing with that's be And year that not We're going a cuts. we think in where a is see is now. back business this point we to think say when

the then is Reliant And Reliant of the sometimes business as much from Great. release how qualitatively, now? a of

in chime I'll Joe, Yes, that on one.

saying heard more we've well doing now quarter components Spares talking in true that recently two be I note extremely are reported Reliant, the to and with CSBG continues biggest and been is that Reliant that most quarter. mature investments the specialty think I last about. of the

is of little for headwind about a So bit that's that Tim a the benefiting and stuff talked Spares. utilization

the two to So they're largest CSBG. components but -- still

Sur will with JPMorgan. Harlan And come question from next the

back now and the right, share in were of North six contributing track, business just share simply American customer that you've growth is intensity years, to WFE how wasn't it drove right? WFE migrations the they the intensity. of four big much Your much contributing years gains. again on this growth, U.S. is drive back trying -- But customer is on but Part to got of one driving to growth gains intensity. for node your node, strong because logic, five stuck WFE How versus one they're strongly so foundry

see any Yes. we're my think to lot mean combination a focused of making, seeing recognize Harlan, prepared an and when you a that we've remarks of obviously our is growth on both. gate-all-around isolated just area a foundry introduced we're the dedicated not through our I means opportunity the one we've under-indexed, progress of this product it's Company. logic. and portfolio -- we're it'd that new expanding an it's the of that inflection I we've for products which We said share seeing whether it's number to primarily area be significant gains, been customer the was or SAM EUV and inflection. And I

share both. SAM it's driving logic that it's our customers so some And and expansion and And had across growth, all also of foundry gains within SAM. expanded it's element

system for wins remarks when solution. I talk Tim, meaningful dry just you about revenues the process I'm with your more prepared expect photoresists you appreciate do And in drive new some you to also to that? adoption missed sorry, that, start module that. team And Can customer then, mentioned -- I some of but your some announced curve here. you

then customer on what of underlayer March, we a memory And customer you did technology I elements large well. more processes. the well last resist customer some solution. recently, has dry drive adopted memory missed as as In announced announced yes, Yes. second sorry, Well, it, had year, this a foundry was development the as who resist -- deposition chosen if adopt logic to the

I it as are within up better I trends so for sets memory us those continued technology think memory, which becoming it's And is as productivity. people I these logic. And EUV, using nice look, setting better momentum. both up think DRAM capability -- that's Customers, across foundry that look look are that more a obviously growing. are for well and is for And expansion us. resist. adoption challenging EUV well really for -- everybody knows They And commented, the that

frame. be a grow the $X.X revenuing over we'll at I and And continue starting to so very point Lam. just you this to have time that's of size billion approximately a I some in mentioned for this for sized we revenue grow the year, milestone I continues tools five-year as adoption back, subrogate nice And would think then us.

next America Arya of the And Vivek with question comes Securities. from Bank

And or memory The first think second on also your Or there I'm is June better it's be know down gauge their or customers industry-wide your half a first that's about side. memory fall of memory them, more is an do XX of whether that a to on terms thinking market, on of in just to even customers the for worse it, But shipments? a WFE is view. kind side? memory could trying and the for one how than in you think bottom And memory fiscal for just you year I view and fiscal memory? just are I the calendar to said related of the next in half year. terms not have the WFE

and memory So, near just term longer a questions. kind of

I Vivek, of we first memory at parsing the whole get level space. low our I don't and to the XX-year it is now. want I and in did pretty revenue remarks, bit growth at right a right from, the to Hard is March, a the but I or don't than would seeing where in want we're shipment right second into little is say. lower comes low now, mean a is say June pretty second a And Yes. point into now. anyway see get half than in into lot that lower doing was the of terms at low what in segment prepared to which even half. memory March

I about think And their on think XX customers fiscal too Or get in WFE memory under has is WFE, even trying view? to a WFE the your to view view specifically, of an public again, not that's but been reducing XX year? a stay could that you that Do pressure 'XX. industry-wide is Or make that customer-specific next assertion? Memory it early one

I that outlook guess gave early. might you I could you quarter say in about a Yes. we XXXX the XXXX, recall,

early a think might little I quarters 'XX. early for three be

$XX in said, give the million WFE look just in 'XX. from is So point I don't But think we're down quarter September we going be to as that, I'd would I for the signaled WFE. last to you what at call, --

we're saw to June just I because think is we the wanted down do December our from revenue this we XX decline memory, XX%. to -- we the gave so already guide in first

into well this we're So cycle.

as year come. when a through and cost remainder don't to year, about come tick to put in we up. laid move And cuts just we happen. into see back eventually that have of to be technology into and great that back, operating well upside we're exact levels call The conversion quarter we going and to well talked the to the able as we we're is going this occur. Doug next about I the some to ourselves think WFE it finally, starts And thing out, utilizations the then at to that's But I think with feel position we Company these start

And Doug, Right. follow-up, a just one quick maybe you. for

mean OpEx decline guys that sort could level On actions? OpEx side, September higher. of further. OpEx last this able that report were were that the significantly or revenues this I December, you you reflecting is all the OpEx were you the to at in time think do Or

markets kind just to the see more this kind should the Is right, two of lot bottom parts. we grow? And start of leverage, in as then end So OpEx? a

Yes, Vivek.

certainly, non-related think That's cost about actions majority of $XX million I the I talked we've the complete. severance. taken, of largely

again of Certainly, in of you think in run the it rate. I amount. kind a already at a if is we're lot quite at June, it's where look good So down

talking of a some lot also spent portfolio inflections work elsewhere. add I'd of broaden really occurring the memory we're strength beyond Vivek, the fast-growing Lam just into expand product are that our So to that. about I and doing to time

XX% our quarter OpEx of think spend nearly R&D. this in was I

grow committed absolutely road company. technology maps to supporting to this we're so And

And watching so that. we're

deterioration, and we with I if we know are the they're going want it we all business will further does Obviously, you we come at this new and when for the products engineering point, on to technologies this back that buy want us think see to the prepared prepared that our prudently. at come back, to that But the and market also time. support capabilities can count be to manage to customers

So spending now. and see we're our balance working what levels really in you that's right that

to Research. with moving on Bernstein Rasgon And Stacy

know memory all sell it? revenue is to anything of Because foundry are additional all markets to list. Chinese of the first them. they that customers it back go can and I guess, one, in big memory? these end one that new you to in Like Chinese. the I balance. For the I'm deferred to the entity want not I is got not you deferred a places on which are able view us And assuming give you're

color are is and little are Chinese what are it it? a just end -- not actually bit So on is all markets that driving the of

are mature nodes, markets and end And logic. the acknowledge got and will a foundry I decent Andre to Chinese primarily it. Stacy, footprint it's logic, Yes, the

it. Got it. Got

trying same the to as same Is incremental that in double are China I got half counting anything. China want And -- and you've was -- Is the shipping? deferred? $XXX to half the before because to got this reduction I things Is revenue the back million, sanctions? is can $XXX just not actually because those and $X billion back I right, -- this that I'm the of guess are like back of you the said ship be like you so mean, they because adds the I'm expected incremental And so the as that sure this I offsetting in guess balances you that revenue $XXX it's about million. you've the I in million things? there, deferred is the this kind to there more guess make get coming

in clarification the of I then Stacy, will a said a incremental say. we I say revenue said said that overlap the all. the majority ago, And thing second didn't Yes, other million advance dollars. cash the and majority. from half. I I there's what very a payment was large would moment the hundred I China And few is got

So through I left. you where to think got

it. Got

quick. I very much but all, memory again sequentially, if plus I Okay. is guiding you're one X.X%. That's your if this was mean at helpful. more there I almost can't XX said super be mean right? mean, foundry really you just quarter I squeeze logic could I down know in in -- Maybe memory in there

I be barrel than we And it's in there, June. but was to that scraping just that. equipment of don't in June it we can't know presumably bottom lower mean, this the than you at kind are point? guiding be literally taking different know I so much revenues get of mean it much I quarter memory if stays the going can't how long

us, It's down you long decade point told very a it's down hard again at frankly. I March, in more level. it's we're It's it -- to for low was Stacy, a much at personal June. in than in and my Yes, June, frankly, thing, low describing see

that in in necessarily just make add not but pretty I further fact my I cases, customers one, into the just bits order that because proceed add technology better path the investment, rare mean the going also Stacy, market. case. I the see capabilities. we and That's the cost lower was not -- add. technology usually investments a even that's to I'd comment, to, mean to many delaying upgrades

may about that's below if come and here. agree would like lowest I So think coming its -- be levels that feels I maintenance we're It out.

on view our that's memory. So

with next Goldman the question Hari Toshiya from Sachs. comes And

things of did I'm in this at don't memory As given calendar. across roughly I be I that. you bit billion, know, the to little about spending curious close your systems levels $X last a to When maybe business, revenue billion And are look below may follow-up how think the memory $X normalized thinking a you're we now, question, how going industry. in

you're bits Assuming, in the and it state? hypothetically, $X are of should are is mid-teens it growing customers midpoint $X of bits Or billion? How done kind memory the inventory are that? out year be exiting and DRAM shipping higher? of of business of growing How would the NAND how your between big kind mid-XXs. if in think and kind significant billion about in that we Is sort this

I quick down Tim. Yes. it it it XX% a And envision It's hard response. I'll this for than being year. give in lower total, me it's memory right, is to mean,

had remember being think remarks. that on a scripted that lot. down the That's ever it done basis. in can't I a year-over-year I much

or high been Probably You but not have get high? a -- might year, too was say, going it to a little though. hey, number, too year than into not year, last is maybe -- size this last the somewhat certainly higher it's might to it's it precise I'm

that. appreciate I

A you target calendar gross years follow-up, of ago, the thinking my on of margins, couple were how gross Doug, XX%. As doing you're just year-end Curious, that. I But to these beyond know pretty million guys about appreciate close introducing small I you're still. differentiated XX, pretty it. you're between X product products. out are and EUV drive some patterning businesses And those putting quarters margins

there with to, XX-ish which the Malaysia, got to hopefully should path Is ramp. headwinds aware be percent there that You've we Or in a continues call of? calendar it, recovery 'XX? are

and shot a take up as needed. can me Let Doug clean

out still the think Malaysia you getting gross as a about financial we off operating on there put pointed the question I out, margin. past. models we backing to headwind. And was big while were not in close We're the

And more tremendous a transfer of so a lower-cost supply a regions, chain. into obviously, volume it really done work much volumes. our of will We've efficient to require a get lot some increased combination

of exit think period The I again, on and next possible But grew location. COVID time. period in frame a hate put and further give through and you, was it new a to over this of basis I sourced more Asia a time real every about points, the the XX to setback as we our outlook. with year Doug again, improvement XXX And have coming talked incremental But we facilities. if as or contribution volume

gross XXXX, back in range. think towards margin XX%, goals which right kind drive was back in that I will we set those XX% of that that

Atif from next question Malik come with the will Citi. And

taking question what asset in are and last gross end us in understand of of Similar terms the you're will manufacturing be can by to you Malaysia the help percentage the steps margins, year, on Doug, your the optimization? of what

bit resumes, absolutely going know to the we resume, on pivot when that likely the ultimately growth will not factory is, the said past, be factory. We've I'm still is network. whenever case. in That put Atif in it it a the it largest and to it a will will little that number

to the model we'll have footprint. back getting manufacturing described just efficient financial a Tim what of is just more part that's So

products is in lodging roughly in outside or with memory Got it. growth? generative days. And line packaging bandwidth topic side you're a seeing exposure? your AI these topical portfolio your Or it then on that is high there Are

Well, I would say seen outsized we haven't growth.

this to I been clearly, in packaging. investments that And AI area advanced in make Lam strong attribute a at But I generate that point. could directly player but the wafer basis, continue product expand to packaging. think has to only a for well might sure also on future whatever as not prepared make be our different to portfolio we're advance formats and we in

have Curtis with we from Blayne question a And Barclays.

foundry. edge. Clearly, want in trailing strength to leading-edge on you're the seeing ask I

You've leading definitely, about are the utilizations at reports edge. maybe TSMC low cutting, quite heard

So from comment your on foundry leading-edge maybe seeing what you're just customers.

going Yes, then incremental about strength comment I make comment primarily don't saw from memory. see we we think nodes. we're that customers, specific And I the weakness, to I any I incremental but said in did said, mature

memory, So additional obviously, implies weakness there's primarily from elsewhere.

little that less into weaker. bit is exposure a So, Obviously, as are memory, I well. foundry seeing a our than leading think weakness is we edge it our is there and some insight but bit market in

understand the But trying just near see. players are be the mean, XX, half second think if memory in. I about if And so If half trailing zero, moving being I'm up second it's I you could guess memory prior lower. foundry I'm just pieces. that kind lead perfect guess, still saw, I comment. is down spending of starting go edge? those guess we'll a It's I correction it question talking of to could just to logic just I kind said trying understand

we WFE, where insight of demand and is stuck around challenge have the into every little including element in the Well, industry. WFE we trying to product of times don't different obviously, this for -- a get lead markets. Obviously, it's bit tool forecast

you best give to view. try we our So

for second in Lam us we've four, at conversions. fact the some see. about talked this from every back Technology of But much the the I extremely it's in to running good think how sort the at memory -- point, in if matters technology we in that's to we'll of be of -- Company, spending half up fun point on starting we utilization assuming what of see tick conversions capture see you but some that or translate coming will dollar standpoint we terms really memory of to

We about now payments, we strength mature in we where and about rules. clarification shipments talked make can these advanced talked talked some about to that of Doug also logic foundry, trailing-edge after China node the

think to to of we how WFE, those half. mid all dissect time we an in can that second accuracy. think all try I trying but about that of contribute don't industry things kind with low to we lot Lam So to to translate spend great $XX billion of Then you a for

Sidney question a have Deutsche Bank. Ho from we And with

China revenue First question lower, update is, on to memory you there seems down being here us somewhat, said performance with an revenue can of moving but will your restricted. for utilization CSBG but some give less be it expectations the I be group? previously you parts think

Just want color great. some to would be get

Yes, Sidney.

I what thing. I the said reiterate and I'll same last quarter, think

that CSBG lot will to more little statement down year, a be new expect than We resilient relative overall this but bit WFE. a outlook. obviously, No

to level, CapEx the improve? helpful. utilization utilization the That's of monitor do guys expect the of Is And just about question in you the -- thing CapEx Okay. you another recovery the memory recover much once to lag Maybe ahead first memory spending. a thinking recovery? on how starts

as I way stuff now, this right utilization Sydney, keep as add to is and is on. But come being obviously running, now. cannot and first I'd feel low the works, Usually, maybe adjusted. is Yes, for I'll down. utilization it then other right Tim, gets Normally, remember say the thing right, fabs the

would the little back business That again thing will output bit a get our be growing of spares maybe to first probably up. will the The that benefit to do and upgrades, utilization industry little a move bit.

cost-efficient because that be spending will We that they Memory, do which a in disproportionate and fairly is tend of thing get when base, The and then next back. business the bottleneck first, when installed industry obviously upgrade get happens, that amount to the the we we it's gets output, tools. convert WFE comes

that in to of progression So order. showing think that up you got

you'll it see We first CSBG will before WFE. in benefit in

Yes.

to investments. time -- when to it I think it's what put see starts is you're asking between you to frame start difficult I WFE when think a

think I the probably the on we'll looks of depends be again, are that recovery we beneficiary the the recovery, And demand. we'll a and confident that of we recovery. better like have greatest what that in shape shape of first see which, once

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

Rakesh with Mizuho. from We'll take that Vijay question

I are were the know side. XX%. restrictions. China mentioned Just there China looks a like quick But you question U.S. it on some revenues

out, you or to puts expect color segment approaching look Or takes that some flat? to give you stay you the and down can that? how exposure as to do you're go As if

don't down probably June think in me little a it's always get hold think don't in percentage I standpoint, but from that exactly probably bit it's bit June. to a quarter the We right, little down I that. a although

spending just low, June. do believe, it. more you mentioned a in How broadly, see transition bounds Got that's memory capacity think on Because side, think you adds? that that? by driven or cash, a still but bounce? technology OEMs do I you is And the again the Memory probably But how know wondering I see XX-year are bit you terms hemorrhaging you of where coming, comes I in in see little

Yes.

get the for better cost to not way think first additional some I to described, customers only occur most but we've add also capital that's as clearly, since bids conversions technology efficient structure.

additions will clearly, capacity additions. before capital -- technology come So

up. here. So operator, concludes our I can call think We wrap that time the

That Have Well, your does We do conference. conclude today's excellent you thank participation. day. an thank for you.