Lam Research (LRCX) 24 Jan 242024 Q2 Earnings call transcript

Good afternoon, and welcome to the Lam Research Corporation December 2023 Quarterly Earnings Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Ram Ganesh, Head of Investor Relations. Please go ahead.

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

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

all margin, ranges. the in operating everyone. of our gross guided Ram, Revenues, and above welcome, December midpoint performance you, strong Thank the delivered margin and EPS quarter. Lam

to evolved cycle in executed are near a we prior Lam of decline has Our the reasons achieved XXXX, a calendar amid to out Compared a year stronger fabrication wafer year closed a results equipment trough cycle few calendar which spending. why for in Lam XXXX, in overall doubling well cycle. December EPS. There

in new First, technology our and innovation foundry, in and sustained positioning improved have the logic products. specialty we investments segments through

our and revenue technology share, result, a continue inflections. we gain have grown at As to total key momentum non-memory we

Second, our trough. chambers field, operating we group. base more than ability with higher improved finally, were to the points in than operational an XXXX from growth costs business by XXXX X.X prior almost cycle. that delivered drive we grown customer calendar And have and delivering XX% in ended XX,XXX in XX% Lam CSBG installed approximately previous our levels. margins XXXX have the revenue nearly has tremendous larger manage efficiency through further in the than cycles, support

estimate by driven Turning This spending in in spending the to continued from range. is WFE. billion slightly not we where participate. segments equipment low do domestic our We up predominantly strength $XX ended prior in that XXXX China view,

WFE was in in XX% leading-edge WFE Overall, mid-single led than down the growth more partially in memory by node the in digits the XX%. Non-memory node world. year-on-year, decreased of with mature cuts nearly range declines rest of spending NAND offsetting China, spending in

muted. remains environment enter business we As the XXXX,

the we modest a exit expect stronger a memory drive in to year. However, recovery to spending

$X for growing Our outside for driven of markets deposition from double early offset roughly to mid- as to high-bandwidth investment node manufacturing growth continuing With come Overall, declines in in in in spending Lam's Growth conversions. trillion DRAM expected see in by decade in investment, China WFE upgrades. by investment of with we largely complexity increases China. be technology from spending to part spend view in $XX will leading-edge NAND spending rise, end higher We billion as WFE will stable XXXX will setup to high will of believe the foundry of served robust. need widely logic should semiconductor calendar WFE mature overall. reach believe and XXXX. Longer around spending device the well XXXX domestic the etch today's capacity for outpace WFE is node term, range. the revenues we and be is levels. additions memory

been this For company to a executing series the the reason, opportunity of we for have position best actions strategic growth ahead.

Importantly, have quarters. over spending initiatives remained we past to these challenging committed despite several the environment the

be deposition increase device XD advanced an planned First will, in architectures is the our and our this products challenges. commitment in etch XXXX to to and believe increases next-generation year next extend services defined by in turn, towards in over move at and semiconductors intensity era differentiation the will in to We drive semiconductor broad packaging solve term. scaling spending long R&D, inflections. including This targeted calendar

is focus and on opportunities expansion multiple across Our SAM dollar foundry billion logic. memory

we high-bandwidth We for solutions have packaging the profiled the advanced is delivery, critical servers. continuing in advances packaging backside several over enabling and for AI dry our are gate-all-around, power wins secured gain patterning memory, quarters, additional quarter, our and advanced advanced past traction In with EUV December which customers. to

segment Our set more choice DRAM SABRE ownership competitor. specialty Lam. overall along a our technology opportunities yielding and also of advantage are packaging XD and diverse over outpace new by of for demonstrate ability a triple an to large made XXXX, WFE we In a shipments uniformity related significant tools, our to best-in-class growth year-on-year Lam markets with HBM this than in expect margin. The cost plating the clear

solution technology deposition aluminum films, performance For accelerated MEMS We and high-volume platform. the customers scandium piezoelectric and delivered Lam onto which laser via nitride we cost require. Compared small have high-frequency this customers deposition our technology next-generation delivered pulse manufacturing market doped competing instance, acquisition devices. by Lam a targeting highly integrating entry to of enables into our more we methods, to recently obtained production-proven

focus The near facilities R&D solutions. second establishing close By has area capabilities Lam we in collaboration our customers' been process maximizing accelerating development and of time investment to are our to our customers. fabs, for

responsiveness customers and supply within ramping economic value These capabilities significant leverage of progress manufacturing Lam for made benefits the and chain and enhance for ecosystems. customer also our have as we global resilience We create operations our flexibility. in-region

WFE capabilities processing we product systems automation to and drive fully Investments capability percentage on virtual finally, poised to versus manufacturing scale. contribution in in-fab in excellence into Lam is facility cost upturn, locations building operational AI advanced ago. And like at problem our equipment to to our concentrated and capabilities business manufacturing a most revenue the coming accelerate helping the digital road lower the new service in scale years few simulation from greater triple us solving, nearly reengineering our us is twinning, Malaysia maps. intelligence providing advanced Our and are are

are our complete we achieving organizational drive executive to As solid agility. investing results build and small with reengineering execution also priorities are intent speed predominantly future. the strong capabilities XXXX, decision-making. In to efforts, while align for Lam delivered a we reduction on this efficiency In and level our resources the our workforce calendar at regard, we announcing of

Looking forward, you, Doug. portfolio that infrastructure the is the technology provide capitalize robust confident with we and am I to the semiconductor our need on and now growth Lam strategic tools years ahead. Thank global here in differentiated expected

year and We in Tim. I know earnings our thank you, what today delivered Great. a season. afternoon, joining calendar Thank is busy XXXX. you during for financial Good everyone, strong call results

mix execution $XX.X per the the and in during memory $XX.XX. year WFE historic diluted came where reached pleased billion revenue at the at earnings share Our lows. company's We're with

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

tied was growth an to billion, customer which balance end advanced the quarter of revenue increase quarter, at the million $X.XX $XXX was deferred payments. Our was September from mainly the which of in

at higher We led dollar XX%, revenue customer needed and segment XX% the compared coming from and high-bandwidth capacity is continue level XX%. DDRX, in segment The is quarter. memory from basis, growth was memory advanced by is DRAM, versus in the revenue growth which was with of an XX% to a increase move also record it's in which December quarter, perspective, shipments levels benefiting these memory which have prior in deferred to balance from September historic a given China. a address workloads, the systems AI-related DRAM levels revenue in benefiting was quarter to systems the of to on at payments. From

in noted on memory a nonvolatile basis was WFE historic XXXX. quarters, lows in at we've mix prior As

the by level several from XX% segment For as The across our Logic mature in from new segment XX% regions we've represented bit that the a as decline quarter, XX% Overall, have been investments the segment inventory was in quarter, down. The December node represented of process September XX% in well, down percentage with this driven Foundry of we general the NAND was which customer the year you. of which softness and projects. share quarter. to The aggressively of Growth revenue was levels higher XX%. concentration quarter slight little segment, a gains various December systems timing up our shipments fab and the on systems the growth delivering Foundry previously in quarter prior projects. the than Other of of our certain little The in well XX%. customers driven revenue, systems in related by was prior throughout performed discussing revenue, Logic to reduced capacity the technology predominantly bring was nodes. the was

percent high XX% we came composition quarter, was in regional XX%, the overall this The in stable I'll likely region was China trend the which and progresses. as of as lower quarters of China a it stay year revenue quarter. our from the the customers, from Chinese revenue. to be to from expected in is the in our prior discuss domestic revenue Now total X last our region in Most March relatively expect down at but spending XXXX. of China

and the out December quarter quarter XXXX. remaining of customer Our Overall, the calendar was business in $X.X in customers And than X% very quarter. from support generated group in top our the X rounded utilization steady, at business regions. The Korea in XX% revenue of see we December December the of our to nearly concentration memory the the low finally, XX% rates. versus fabs lower billion, XX% the Taiwan quarter at continue Japan revenue quarter next September and operating largest September and was year geographic the up

Spares followed installed of largest X conversions strong components Given we rates have CSBG. by for product to the resume line utilization foundation the growing. strength with the units, be growth Reliant technology of the continue and a base

from guidance elements March we performance. quarter above at in was as Turning of expenses point September improvements. of quarter operating focus XX.X%. XXXX exited came quarter coming delivered R&D on expenses. The up quarter line improve amount critical percent gross structure the during the cost midpoint is quarter, which We've the XX.X%, reflects spending to total spending inflections of our extending XX% earlier. with from to those on product our the operational differentiation which margin from those X December gross level, December $XXX $XXX and increased September level our mentioned calendar over year versus generally prior of a quarter of across ongoing margin year was percentage and million, commitment approximately our million. improved were the the in XXXX and as Tim by technology that in at higher The the

margin We grow objectives above a with current support midpoint outperformance. Operating investments primarily quarter in the the XX.X% of strategic gross XX%, company segments for of of the across multiple our continue because will line to quarter stronger guidance and margin to was level long-term September performance. for market ongoing

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

fluctuations calendar tax with in million million to for variations rate mainly $X the December with some in quarter-by-quarter. the The will XXXX, in cause slight be fluctuations level in volatility in we be to in quarter compared mid-teens $X September quarter. that exchange OI&E income Other in low will the came to at believe normal to expense income into Looking each income market-related subject quarter. the due of rates. fluctuation OI&E could was continue the

On and to $XXX in $XXX the we in quarter. market share return million open repurchases, paid side, million capital approximately we December allocated the dividends

share XX% returned Diluted on capital earnings was long-term the to plans our quarter. totaling down we which our December consistent rounded our million with XXX For per shares diluted with $X.X cash the flow, September was quarter largely $X.XX XXXX XX% expectations to the down year, from free and guidance. share of over calendar midpoint of track billion, our XXX%. of return count

buyback plan. $X.X share we XXXX, have During through I billion just mention, million X on would nearly repurchased our shares program. Board-authorized our remaining share we And repurchase

Let to the me sheet. turn balance

quarter. up offset billion, allocated totaled Our dividend the by share payments the at cash The end to expenditures. billion and for was and flows collections, September short-term $X.X in $X.X investments increase was of in from due December repurchases, was quarter. December days to from cash quarter, the the in the XXXX billion. sales $X.X cash quarter days decrease capital coming which was a operations XX record from in September year outstanding at XX Overall, Days largely a

As of I'm that execution, a X.Xx. operational pleased result level of to and from improved our to inventory focus turns quarter the prior X.Xx report

We calendar XXXX. bringing down inventory throughout will continue to on work

quarter quarter expenses primarily December expenditures the supporting employees, was global Our activities quarter. Spending $XX noncash development centered and amortization. lab on for We compensation, investment approximately quarter. million $XX our depreciation XX,XXX million, $XX in $XXX the United for regular for full-time the approximately December million up States from were included me, and the the product million the for expansions for flat and was quarter December Asia, strategy. with which prior equity Capital million ended excuse $XX lab with September -- the

to would turn of XX%, is gross XX.X%, revenue also the margin spending $X.X XXXX XXXX of point. non-GAAP reflective customer as We're billion, or I again do I spending we guidance favorable expect guidance quarter, It's point. minus margin continued to mix minus of percentage will mix. quarter. years. week percentage remind plus I growing And which have margins the year somewhat in extra this Gross for you several includes that a now the X -- an $XXX mitigate year. will R&D Operating March plus the quarter. our March as progresses. of every million. or quarter Let's This favorable XX-week it this be minus expecting X occurs or will reflected higher plus highlight

approximately And minus earnings count finally, share a we're shares. $X.XX, XXX $X.XX plus based of million expecting per on or share of

be to focused on and improving efficiency continue WFE as optimize operations growth business We to occurs. our effectiveness

realignment I actions, reported Our calendar XXXX. we activities year Including and XXXX, would million million which non-GAAP It's months. in over these be and well these total these now year in during continue cost now profitability We'll reductions business spend with metrics expect activities calendar longer. XX previously $XXX half you our first spend we activities we headcount for made saw see will calendar the $XX X in reflect adjustments. I the underway. higher progress we'll improvement the transformational that continue for incurred in million told and XXXX, had to $XXX months of

conclude. our So established managing let proven me Over has successfully many a of track semiconductor cycles, business. Lam record

revenue and that With the taken technology and the our efficient. Operator, into prepared strengthen up open upturn, and profile. operations of course questions. enhance When will and quarters, our over the to Lam further like next positioned stronger, would last several now for be the remarks. more to actions leadership scales better concludes the profitability our Tim expect call we've we I

UBS. from from Arcuri first Tim Our is Instructions] [Operator today question

first reported of heard in wondered litho looks you guess you your I and had big orders orders today for question huge I these if peer of billion sort translate. it could DRAM. is EUV that Obviously, for my a like you, couple that dollars Tim,

that of $X like billion $XX billion, to translates So extra that. sort an to something

So for it shipments for this year them. and mostly even into year seems during next

about you outlook that in with segment? it's any you that it customers? think haven't but the seen be DRAM maybe you're you up lot. like to yet. can know tells you your the be seems about a could maybe what the or talk I And like that of discussions planning up, that But And change having it So future going

customers we period adjusting wrong. do and because And have a to the good generally, that. I of very own and to our Tim. we we is And Thanks, listening in based of to tricky assessments. give of certain get we're that segments on it a obviously, Yes, overall WFE, try peers, sometimes making thing of guess And market. a talking we always view to forecast Sure. WFE an view

times ago. more just I It's and opportunities said And do didn't anything established us memory, think and just growth beyond. we'll exit coming we're fact, said. pretty that the completely year, is the though is think with think that. play inflections at it's those DRAM that was the play seeing over I with years which lead that think eventually at I because DRAM having and, I equipment maybe that to differ of equipment which that, segment. period, think across the amount report of memory. think that have strength to and a that it that levels. felt NAND. so out bullishness to that right. I my of In spending a this catch are is I be it we now. we We conversations about equipment more said We certain in corrects talked spend not to brought said point out surprise exactly unsustainable fabs would much up year. get I see we've time tremendous both But itself. We we into at a actions, call We've and ordered -- And in trying -- positions years I been Those a a think historically I -- going last there's there. WFE inconsistent I supplier, modestly we're what applications in of don't has need that out there script, probably something lot and memory recovering stronger in we'd timing there's continuing in equipment -- memory the magnitude, in mix The have keep framework and further by year. And strategic to can I continue to every And pieces think and high-bandwidth don't of were customers. In low the on watching to What WFE. supplier this DDRX our to DRAM reinforces

tend technology long-term patterns. and we a of view to spending So take

that deposition. along And etch you something never without goes that Tim, longer know are you it's lead I'll that remind know the are than well much eventually buy buying times I just litho and Doug. those in equipment ours it. generally you with process with And very

will if So we something, too. see they're seeing it,

sure. Doug. for Totally, Yes,

Doug, you, for quick. guess I So super

lot of on of there's you. tailwinds know some is I know getting a So things parts, I some the you're from mix helping that And gross like kind margin. moving in going and I cost know that. relief probably

what's like right of it us right normalized XX sort the basis number, you you XX% Can So sort know margin? goes the is helping of help is there? and normalized I maybe the that's mix away. is what but not by points,

favorable had year to back think, of I quarter mix maybe a when June start a margin, driving remember customer Yes. in mix specifically. you I'll quarter quarter if thing. bad mix normalizes you same what's guide, of Tim, to benefiting the what to back March took still I not even that a gross maybe than That's were levels. us of is largely remind kind too, it I that is quarter quarter. more geographic The last last around before bit and little did I said such call June the we XX.X%, XX% last again place normal mix. We customer the the more kind

So that way. think about it

benefit that to operational resume cost Somewhere some in as we've been we and about are resumes from the at like know install talking we things improved we juncture, and where company will here. these real These repositioning between growth should locations. are growth lower there and

of the growth come still require on the line. it that's but level will in business. So some

JPMorgan. from with is question next Harlan Sur The

your turn out to an morning, early litho know see called utilization I customers. growth the of activity reported your are very maybe increase litho giving year? guys going in at confidence your Foundry seeing dynamics. back and customers? also in utilization know also this in that some pickup that across rates signal for to peer you right? Again, but in real this track And is in in rates further this levels, starting memory time cyclical customer guys you both of are low and WFE utilization, appearing is their Logic, in a that of I you large positive They tools, modest your they're outlook

in pretty track past that said closely. We've -- Yes. we the we that obviously,

it my coming the to -- to about offline, -- spending taken start memory customers and certainly flow portion said would do will I seen year of utilization. markets benefit our Lam We spending I I upgrades. pricing as the a much we us? -- we technology would script, this talk uptick in uptick that would and upgrades like WFE in of spares we And NAND, mentioned those some base through strengthening benefit you've so through flow with anticipate customers installed talk increasing heard in upgrades. will in technology business. see Lam our a How markets. think is our heard the that therefore, in as said we We've see mean, that we equipment utilization the in affect from where big of of those be lot we

will fact market we've equipment that DRAM. has talked high critical in of to element bandwidth added And like share memory. for be memory, needed about XXX% the spending other of Lam The stacking to coming the enable a high the that needs from things technologies the the additional bandwidth get

that but of out darn I'll all let last couple to market to signs years. speak historic customers utilizations downturn memory come the our of So pretty are their is I'd near are the what to over say pointing what beginning its

we're And looking for that's what this at year. so

you a That's XX% That's target than year. tech sometime this, guys your business few discipline has lower since know I migration. was your it Day. past pickup will you see that activity at Analyst weak a of been significantly supply the side then very to assuming your last helpful. that out CAGR CAGR think just I XX% of this at given faster mentioned over And slowing XX% right? the in utilizations, put the I it's XXXX, But mean, quarters, CSBG you customers, some grown

with base strong of continues the number growth of continued growth forward? low and Like how rate. in CSBG chambers a business, combine a You we grow think to at profile, double-digit going growth this puts year that should the installed takes about and

occurred know growth number going point. Yes, for heavily at on in typically year put don't to occur as been we're within utilization the our But fabs. And out. that that rate business customer of spares of a cuts that I just as has CSBG many saw curtailment well a by we in, this both that the that impacted technology the would clearly, upgrades year

And so that have on an did impact revenues. CSBG

I a need for pent-up upgrades, the the going larger to there's upgraded That's is node most to there. our mean customers. much that base the tools because latest operating forward, in think demand technology base efficient installed about be most technology talked of be now. installed and how I competitive and that delay larger much those I at

base be know timing, installed don't forward. I so will of revenue going quite but And exact know a and will for the Lam lot generate upgraded do I that actually

upgrades, remind like just describing. X there's will maybe was CSBG, Tim from in which Harlan, And you, benefit of what components spare to all service

with product a flow in will specialty there, last just You year. to which node mature line ebb extent certain also in have has nodes, and WFE. done the Reliant the amazing more That

Reliant the So that dynamic a of sight different product lose might one. line. don't There with be slightly

Malik question Atif from The with next Citi. is

competitively, of And guys if coming have when competitively about there's than you downturn happens. out recovers, layers were First the to spending upgrades. more your edge we this position historically, your NAND But technology process? -- think on benefited the position the should NAND disproportionately more how when Tim, this year think one, NAND understand spending about whole I particularly you

Yes.

next of it's out. in very upgrading stages I we're near and the at looking -- have that sensitive. by was in mean I equipment think in what that I I notice that recovery to achieve is think a term best cost are that those the way the pointed And customers good technology you question, place. what first

that And equipment, so investing and customers. enable tremendous of upgrade really our extension our value amount high we time Lam, of technologies spend that's a in and of to the

go will on that a time. actually quite think for I long

understanding We chambers That get tends of X,XXX of positions at challenges we've ideas ratio node, many need very etch, upgraded have technology high that, break that mix creates next I into seed and solved installed next-generation from that's those why in the instance, a chambers to difficult of incumbent and to lot And beyond to industry. And for to the this to -- that in now node. technology marketplace. be upgrades. all positions at NAND running the you be the think about the tend the And of base break aspect others through tried those break others. learning

to adequately labs with so way which very to that and And forward. about we're meeting again, that's And going we that close I R&D in putting in closely we collaborate technology just our to has know close customers. strategy, well. our talked both What customer Lam needs our customers. done the cost extremely proximity ensure well very their is

on a Great. OpEx. quick the Doug, And then clarification,

up be or I that R&D if increase in wasn't total said is OpEx is SG&A implies to year-over-year. also R&D? up the offset sure will You down

Total Atif, of probably all But talking OpEx watermark. R&D is be to the we're spending We because primarily those last of R&D going high that more, in up been be had we've a XX% growing purposefully That's quarter. about. will inflections up R&D., in total right?

lead think way than spending us is to develop products the drive time our new revenue. time the is about I unfortunately for that to for lead easiest think bit growth maybe to the it we longer need the a little

next this coming that that feel entering we're revenue So growth opportunities confident the tremendous and of company, are we an with outlook ahead invest that to is where upturn, there very the that's investment that with think and that growth signaled and confidence we're up, we see in I But customers. this new technology products year. going to for showing what our through from

is next with Hari question The Goldman Toshiya Sachs. from

be bias on but half, mentioned as how you're have year? that across this market? sort you You a outperformance of there one first share more about we about importantly, Doug, I of your is guys -- forget second intensity space. WFE depth of the thinking trajectory first and if think should about this, the the to we growing WFE. obviously, The talked etch And rate willing curious vis-a-vis memory half

advanced HBM about things like talked packaging dry HBM. resist. in You

So to we guys assumption singles. WFE sort outperformance 'XX? of the your assuming call and mid- you're from of up market's can sort expect calendar accurate it, you What in with high

think this weighted I Toshiya, I first guess year. Yes. half it's little year -- the a bit second

going sort to of to the it's revenues year, be guided think maybe, right? flat to just the I quarter-on-quarter. essentially We start slow

part but that's you would individual in DRAM, of going we components Foundry second will Logic, you're seeing, overall, stronger half. the not grows then and give the And what to somewhat between it be more. NAND, we're So expect what

think everything all in look markets, When node grows probably certain you stepping extent. to intensity and aspects to etch deposition I so of from to those all up node we end we inflections see node. a at as these walk

unchanged. is that So

applications the absolute China that or your are year? of throughout you year. other say you're some it. you to that, follow-up China that business? seeing a Is improving types if other percentage in of so, you regions And in your elevated what areas stay Doug, function a on went the revenue quarter. are you China, the to sensing of on mentioned or as Got And a your should my slowdown? And decline device as then progress as purely just through the then number businesses, Or of systems March sort decline

the we've have We It's are for comments and and that consistent right? a you China when timing So not think occurring, of spending honestly. Toshiya, my Tim it in we purely using a been preferably I stable, is both saying that's heard just seeing word, been description slowdown. while.

from with is question next The Cantor. C.J. Muse

I -- hoping your to reflect gate-all-around. And we NAND for rich normalized can in peak power changes I perhaps about kind kind those where there for juice back Is or NAND guess of advanced could overall XD that number adopted? you or and normalized there was that you get new get some to basis, speak on areas you you intensity perhaps on it's then think investing in, get WFE to a kind whether lower drive and when might look and enough what backside like levels recovery a first the was where and packaging of to us memory you're of XXXX? vision a might in to of if

Sure, C.J.

play the deposition I that of those evolutions, the term. number that a think need we're of increasing on what of not some yes, NAND sense. about address -- we upgrade. we forecasting there Lam higher growth mentioned, and layers. believe and primarily the see additions think because we and customers to as drive we've etch that bit are technology much because this me goal dep first, but we've which let captures etch is, of this mean, answer made, the that of year. With I that each makes the that. rises the simple to mean focusing percentage be upgrade, technology a do -- in of talked I Obviously, type I in intensity longer year, And upgrades technology simply the eventually, technology WFE question are fact

actually NAND I percentage growing because and see is as that coming will rate, fact that of from rate that of outperform So Lam think certain a most upgrades. the we -- growing that at significantly recovering

a think want that exist. business we've strategically, and we to have build to we opportunities Now our I term, of attention said turned lot our by really into resilience the longer capturing

of really EUV dry strong, we've but each those, as we're $X becoming packaging, opportunity power we've some a those, it's patterning. Of talked of or when And fully backside markets and very of intensive. And and about dep or course characterized gate-all-around billion-plus advanced etch that whether for are in other NAND NAND these more scaled where Lam. outside

-- to where Lam So are expansion before. those incremental meaning and that has been they SAM are

to ways before So terms and to are can we those drive but execution. profitability have talking as out these inflections when traction, and be I you a we're Lam in why certainly we made. highs gaining well. go those think there's and successful to obviously play we new think in But still keep obviously, That's decisions of all about revenue

of R&D driving hesitant you're but could extra guide that Doug. you about week impact the full year, guess the OpEx quick thinking And how know calendar through March for the understand I Very helpful, Tim. growth I maybe a us year? perhaps on the help to the follow-up, quarter? you're

Yes, That's C.J. kind it. of about versus think to XX. weeks XX I way mean, it's right the

You can just ratio longer quarter. it a to understand kind of it's

step that's op So R&D. part to get to the of up the that then margin piece from beginning is that. delta And to XX.X% any

be a should R&D that's investment ago, see year, that you we've historic through we still very thinking how is described the As might delivered leverage so not quarter growing the that it. much we and purposely about you what though, in will I go be the

James. The with next Srinivas question Raymond from Pajjuri is

execution. Tim, doubling and trough tremendous a essentially, achievement EPS about you talked is your which

I your of increase business think reason did mix. services the the as of a part percent was

sure the I helped stabilizing bit. think that for a cyclicality

go of how to And And sort we couple next, as services? business about? out the the peak you implications and curious that on as of talk through I line to the out have margin as -- how and the also as EPS, might next between years profile? guess, want top for your I mix if So guess, kind you what systems recovers, to of next shaking we your look about just think

why tremendously here's question difficult a it's Well, this always investing business to because certainly answer systems our well. is little grow to we're as

other. look And off one the trading at it we as so don't versus

installed the better that shipped grows, in from other. of -- base And talk XX%. nearly about how installed so story The now, that's We our the systems by kind grew that a really installed grown. has base business begets much the our XXXX we faster and the fact, base lot new when in systems of does one that until

and channels we things anticipate of both think I I've business. in be business, think revenue installed it is services talked revenue, how which of new ratio stability, also that But opens overall to not kind of by to think Lam installed forward, this when like but leverages, revenue -- that about the parts. And going It's kind the on gives data. going we been. CSBG driven us staying previous about on only I success in intelligence for equivalent artificial base CSBG And range So growth we base for just in calls, that's the it's the that the historical the company.

of engineers. today call, service On talked skilled cobots, the to use last even robots collaborative I that some done of is about the start the to do by

that than can Our ways cost. And we a by that around manufacturing faster new grow that in provide I growing. base and installed installed a innovating pace service itself and the do base lower have at and innovate -- create this is customers to to also services industry to able faster be offerings us at think the products find help

And deferred then on Doug, it. the Got one revenue. clarification

up about it think I this went quarter. million $XXX

talked prepayments. You about

curious, prepaying because of will supply guess, an Just be Or forward, still this about ongoing, you about should trend any I customers we talk how Just going are can if that you're revenue think constraints? helpful. is deferred that seeing?

publicly and tool, That's Yes, customer what's sheet they're of Srini. a reported. we're of It's customer advanced require especially the that is. private described you their we if when begin the about not that's think kind have I looks the all upfront on see we We that it new what might sort is understanding balance creditworthiness And just balance before I manufacturing we questionable. there. like, cash guess a payment what could be the is going sheet.

Rasgon The with next question Bernstein Stacy is from Research.

the market For being see in Do some calendar weaker? you being stronger do see and some do Like segments BOP you 'XX. how like stable? the all being interplay? China first being you stable that around Or see one,

market. bit was for But year. entire half really big weighted bit think think half in a see than maybe last this year-on-year China, about It's you, change really relative don't I'll year. little to little year-over-year, significant a weighted when first remind I don't China I more change contribution in a end year. Stacy, DRAM second probably I a the

your helpful. Got should maybe China revenues you that earlier China China That's if down like follow-up to suggesting does year. overall come it. the in because I me grow questions. look down areas. one doesn't does a on looking for can how like sound non-China ton, the right, on through you're come other China Maybe got to you and questions, are And guess follow-up like of some materially? But mix clarify overall it's mix the WFE a It I've stable like it of a the

So...

Yes.

in of second Let more me the half China you, in year. of amount remind a XXXX, was the grew modest that WFE

it of it's Kind the 'XX did are year-over-year, And specifically. stable. relatively stuff so in the comments probably different in half-on-half looks than in 'XX making we're China

helpful. That's

exiting half? year, to as result that that a gross margin then the range And second as off China you're think so falls in back normalized you sort of of the

go Yes. strong customer through as mix quite and think, guidance. continues March the The stuff, some it year, to I quarter the mitigates we in be

is America from question Bank Securities. next The Vivek of Arya from

grow second more opportunity to the pace year? what in right Lam's a of of For more view, are I in you are half measurable exists one, want NAND telling to what's adding as they your grows demand supply that your what's curious, it technology as tools? today? NAND my think when because customers start first but assuming upgrades. to NAND for And assessment you the WFE your at I'm But of

Yes.

that that were -- do severe are with customers about I utilization necessarily all, we wouldn't and what NAND We last I I out think know first that talk our know, cuts you there. on think the standpoint. are things in that of year. discussing pretty But

is And in that technology node restarted. capacity occur there as very what service. that think be a question so is to certainly and be we're we've of back the having that there's technology And upgrade will is and should into offline many is back a that discussions amount said high And I needs brought that likelihood -- the the tremendous brought that in cases, equipment online. been capacity has past

segment. time, think this we effectively from as a spend at the And will some driven that's perspective revenue spares so case, restart revenues. think from same utilization and of of that And that restart in that of occurs of as, NAND why begin a that that year, represent get the we services, I things well majority would to the actually like in the technology upgrade see we this a

or customers are Does negative influence And bit a that shift plan and of to as many from the on positive saying DDR. business? then, HVM Okay. your that more any DRAM Tim, have spares CSBG the they towards

give off growth seeing No, now. of I we're business goes HVM I'm But I impact that on see along we're related related right mentioned, packaging And having stacking as the itself. us significant make connection services specific HVM systems, don't portion that quite a kind there incremental shipping the to and additional an and -- given business is where we that business, to some that. I that especially clearly, advanced systems add But thought. in with steps outweighs can't systems to the from of spares we're so area. dollars that, -- with some But perspective. our

factor down is does your slowed because business going business I to of grow Or guess be also? you CSBG there clarify, start think with to to overall? kind consistent in just the it later? maybe Does start your to later a tools growth it regrow lag do

to chug on coming. think not going question, pace I'm going and and back. to utilization along, is. answer Depends you that really of of got go be whatnot see. figure you perfectly spare we that's are benefit on as kind frank, to put now. WFE out come We're in your and growth Then See, to to what going that right growth think service begins wait rate numbers to the the to upgrades WFE of

is with The Cowen. Krish from Sankar question CDT next

First of all, Doug. for

has about kind I think in mentioned more WFE back Doug half year, gradual rated. this recovery a of

That's curious, half? and the of like is I'm a calendar better half is, XXXX then not What be better my looking first just I wondering to guidance. and is of revenues assume in first than have kind question I'm going I'm So for follow-up. this Lam's second for Doug,

performance certain extent. trajectory were and And think an about you a muffled, asking to that dep along with we like WFE. but You're our mirror WFE with outgrows I will etch little think bit the of frankly, a whatever Krish, I expectation looks

I think little muffled a I there. question, you your bit were although answered

is for revenue calendar to trying half similar just half 'XX to better was I calendar wonder second than Doug, first going Lam WFE? if to be

numbers going it to yet, what Yes, I will think I'm we be, put on will goes WFE. with it not Krish, but mirror on

it. Got it. Got

Tim Okay. And Doug. is for my follow-up and then

HBM just a does Legacy does for and mutual dep standpoint? from You HBM and good it it [indiscernible] -- AI and way, in I'm the and sets a X DDRX, about and from more Or margin a wondering spoke differ standpoint? etch stuff. is it DDRX all like is like

other think shouldn't into building the is some electroplating equipment Krish, The that high-bandwidth in same go that. to what extraordinarily The addition say, I'd and That we margin where stuff deep die equipment. any incremental areas a in largely things. silicon builds you advanced memory packaging piece for a HBM. about from DDRX guess goes that the clearly DDRX that strong I are comes incremental itself, die Syndion standpoint, differential is the necessarily. etch go a doesn't bigger stuff, the margin die, The you the incremental know is stuff are when you into

in think with with general, I think it's etch to Logic, evolution, And advancement. NAND, -- technology think in from an mentioned you whether intensity I general, DDRX DRAM, DDRX DDRX. intensity etch I I dep technology mean DD node dep Yes. each said and to and rises perspective, Foundry we've

die fact the that and needed, bid I think sizes to so you in per can that's And imagine there's equipment greater equipment drive addition out. more being larger that

of and nodes. time lot equipment more move forward, with factors that more there's there's equipment every Lam we So those required a technology

question is Stanley. with Joe from Morgan next The Moore

DRAM? and ask kind of you December think DRAM of your some core events sense us in Can Can going regions of what's give the constructive then within a China China had I but I you're the some back a They where other quarter. give about highs a just the revenues years versus for ago, of of pretty you couple there, can DRAM dynamics If us kind were of of the in you packaging. that? other sense parts of there's forward know to that's on systems I And going.

strength mentioned had to guess, I them, both in just DRAM the and frankly. memory would my DDRX. I It's bandwidth of you high December things I are the driving Two what take to script. you quarter, in in back Joe, in

In that the includes year. half. addition customer to in DRAM China half and December, first That the that September a the second in the in we've wasn't got of fact

December. So of those things each you contribute strength saw to the in

second DRAM in but Okay. forward. demand that than China And had core that from HVM half looking come and going it comes Does up months then the down, seemed more X up? of you forward, comes customer like

Probably.

with The next Stifel. is question Chin Brian from

quarter the spending year. level Maybe best the was of going back last to spending all probably NAND than NAND NAND, for total maybe ever higher for of

or And highest low off if improvement it it's rate pretty isn't logical so should of WFE in base, NAND a exhibit even 'XX? the largest that

necessarily draw that wouldn't Brian. I conclusion,

it's peers. I WFE to business tell we're all going But quantifying grows every grow going day, I year, this think you a will it to extent Logic, the is think wrong. everything the of frankly, NAND, because get Foundry, segment the end each to into all I'm certain at think I that with one up get individual of DRAM, we'll to not a extent. certain

to also more of could what Okay. X-alpha kind It sense or forward. number thought advanced just like the industry better you percent a enough. this looking was cetera. base process then X-beta et converted be did starts of or the and seems of HBM, also, be DRAM DRAM much than How initially and on then us And year? wafer nodes give installed can that 'XX? declined And DRAM actually level Fair spending of based set to in to

I memory get of was down XX%. DRAM. guess, The think script, I'd is say NAND north to XX%. I had Tim, number down and overall was what his Brian, this in roughly the to differential

question, the a do I in and your can the that. And yes, second big has strength HBM part been DDRX DRAM. think of You of part

Yes.

was wafer for part number kind of more nodes? base light sort conversions was Okay. of those of to towards, starts X-beta And or what actually installed is second the potential of that the the the that's percent X-alpha, game

next the everything most node, a to new been all upgraded it. That's always the phenomenon. of part, It's gets case. memory, the in not For

Research. Caso The is Wolfe from Chris with question next

you? much Where question they the you for The we that to times will industry. on in right and is to stronger be when quickly obviously, some delivery had And And need your perhaps mentioned, how And some as others revenue? consequence, able start that now? customers that, your sit do how spending, give to times. visibility delivery with may to turn be than memory do see react a different you

Yes.

it's supply So chain the our shortages, they talked due that we us That's next helped in shipments don't -- more that a make needs. customer much manufacturing such obviously year, But back make chain to think orders normalized COVID would supply within those about operations know And quickly. although I and that's talked times. are for now pretty it much we this have more putting to closer, publicly our telegraph our one to lead this I come thing supplier within lead those level, that our our much customer to ecosystems. is upturn quite through stretched have we had fact out long. during times forecast about about still and pandemic, new base the to to diversifying us investments it's The responsive going us and

our be bottleneck, planning tend time of to ability in tend customers respond frame, fab. not we new way meet time perspective, their lead to in place to to need we time We really, not about about and the worry a orders -- which ramps. more it let's to So terms less put in be our the that a lead

Fair enough.

implementations meaningful impact ask we and Lam? disclosures And quarter, customers that Lam a that As a for power. specifically, wanted start you the having about are give some to made question, what the that to does a I follow-up know Could different backside as that point revenue backside on happened. about different last you color little of more power. At become driver to

in where power both play process our position those quite talked and chip again, are to plating power, meaningful XD reduce and more like for just layers using given therefore becoming copper and and think how reduce that to the and It's it's would backside of longer. architectures the demonstration very also in backside deposition you -- thick I and processes allows -- company. I rapidly using etch create strong we about the cost. improve essentially the important the etch those say, become sense And complex in a going performance of And of some quite become parts going it deposition of power. further that role to

the said, stacking chip the good of I semiconductor HBM is seeing And XD era and all the architectures. sell. They're next products thing with these I energy and of we characterized think for You're why by of same integration. more that's all types unique

one Operator, we question. have time for more

question that from with And comes Barclays. Thomas O'Malley

as with look you HBM. could a think. shipping looking 'XX view a above how I of much you HBM they're you market. market as just growing -- was you perspective that at Clearly, a tool? just of has from of if an have pulled months typically the DRAM customer is may fast some on And actually last X road growing in 'XX. accelerator when peak on the be How what just the from a that market view quickly concerns us HBM guys a tool guys with HBM on acceleration Do curious you had and market customer segment? There's internally the a as give a the for in would map see when in,

stacking, supplier think position we seeing required the key strong Well, we're this a an as I have demand. the very, I real processes in mentioned, HBM into is before very the where as the that strong area market,

fast to we at and And we our ensuring above at very, focused whether market some XXX% AI own technology it's HBM. we're now that's ensuring rate. leadership market And that TSV think this point, formation of to share I think shipping in hold that allowing capabilities. maintain are is that right continuing very capacity building us the out evolve all a is peak, I or not on that

really, is as focus market so let our market And that's grows. and as position grow the fast hold the the

of And then makeup one inventory. Helpful. just the on

foundry You where down the color on there I more year? but inventory? working see that about Is Is know just inventory the makeup the guys throughout of down do half specifics, calendar or related want it logic you you can any year. of to don't inventory give you us that through coming related? talked the give first memory have

was as memory. dramatic, we and the taking specifically up pretty in Tom, more we rate of into inventory went than decline we 'XX ended it's memory Yes, -- needed for

a of question. down. targeted come the there's So will as recovers, component bigger for at Thanks the inventory it memory and memory

question-and-answer presentation. also our and session, concluded. you concludes for This conference now attending has Thank today's the

now may disconnect. You