C J Muse

C.J. Muse asked about Qualcomm's strategy for a potentially sustained memory shortage into 2028, including Chinese customers designing in CXMT, Qualcomm's qualification status, and the impact of Samsung's internal DRAM supply and Qualcomm's wafer commitments to TSMC. He also inquired about the impact on QCT EBITDA margins if there's a mix shift towards higher-tier Snapdragon products but lower unit volumes.

Answer

Cristiano Amon, President and CEO of Qualcomm, clarified that handset memory is purchased by customers, not Qualcomm, but confirmed Qualcomm is qualified with all memory providers, including CXMT, and offers platform flexibility for various memory versions. He acknowledged that memory vendors prioritize HBM, leading to consumer electronics memory availability being below demand, and expects the fiscal year's handset market size to be defined by DRAM availability. Akash Palkhiwala, CFO of Qualcomm, added that while leading nodes are constrained, Qualcomm has strong supplier relationships for wafers. Amon also stated that a mix shift towards premium and high-tier Snapdragon products is generally beneficial for QCT EBITDA margins.

C.J. Muse asked about Qualcomm's planning for sustained DRAM shortages into 2028, inquiring if Chinese customers are designing in CXMT, the strength of business with Samsung given their internal DRAM supply, and wafer commits to TSM. He also followed up on the impact on QCT EBITDA margins if the mix shifts higher towards Snapdragon but unit volumes are lower.

Answer

President and CEO Cristiano Amon clarified that Qualcomm does not buy memory for handsets; OEMs do. He stated Qualcomm is qualified with all memory providers, including CXMT, and has platform flexibility for different memory versions. He reiterated that the fiscal year's handset market size will be defined by DRAM availability due to HBM prioritization. CFO Akash Palkhiwala added confidence in wafer supply for leading nodes due to strong supplier relationships. Mr. Amon noted that a mix shift towards premium and high tiers, where Snapdragon performs well, is usually a benefit for Qualcomm's margins.

C.J. Muse inquired about AMD's ability to source incremental server CPU capacity from TSMC, the timeline for wafers to market, implications for 2026 growth, and potential pricing inflections.

Answer

Dr. Lisa Su, Chairman and CEO, AMD, noted that the server CPU TAM is expected to grow strong double digits in 2026. She stated that AMD has increased supply capacity for server CPUs and expects continued growth throughout the year, actively working with supply chain partners to meet strong demand.

C.J. Muse inquired about AMD's ability to source incremental capacity for server CPUs from TSMC and other partners, the timeline for wafers to be available, the implications for 2026 growth, and potential pricing inflections. He also asked about gross margin progression throughout the year, considering the balance between strengthening server CPU and accelerating GPU revenue.

Answer

Dr. Lisa Su, Chairman and CEO, noted that the server CPU TAM is expected to grow strong double digits in 2026, and AMD has increased its supply capacity, expecting continued growth throughout the year. Jean Hu, EVP, CFO, and Treasurer, stated that the Q1 gross margin guide of 55% (up 130 basis points year-over-year) benefits from a favorable product mix across all businesses, including new generation products like Turin and MI355, and expects continued gross margin progression, with MI450 ramp in Q4 largely driven by mix.

C J Muse asked for a gross margin framework for calendar year 2026, considering the MI355 to MI400 transition and the shift towards full rack-scale solutions. He also sought more detail on AMD's growth expectations through 2026 and beyond, specifically regarding the breadth of customer penetration for OpenAI and other large customers, aiming for tens of billions in 2027.

Answer

Jean Hu, EVP, CFO, and Treasurer, stated that data center GPU gross margins typically improve with new product ramps after an initial transition, with a focus on expanding top-line revenue and gross margin dollars. Dr. Lisa Su, Chair and CEO, reiterated excitement for the roadmap and strong traction with major customers like OpenAI and OCI, confirming deep engagements with multiple customers expected to achieve significant scale in the MI450 generation.

C.J. Muse inquired about the near-term outlook for calendar year 2026, specifically how to interpret the expected first-half weighting of sales and potential overall revenue growth. He also asked for clarification on the long-term vision for Teradyne's ATE market share, which appears to grow significantly in the new target model.

Answer

CFO Michelle Turner highlighted strong backlog and better first-half visibility for 2026, while cautioning against linearity assumptions due to the lumpiness of new sales patterns. CEO Greg Smith added that Q1 strength reflects a 'two, three-quarter surge' potentially followed by a digestion period. Regarding long-term ATE share, Greg Smith clarified that the $6 billion revenue target within a $12-$14 billion TAM implies a slightly moderated share from 46%, driven by expected share gains in compute, stable share in mobile and auto/industrial, and incremental growth in memory.

C.J. Muse inquired about Teradyne's near-term 2026 revenue outlook, specifically regarding the first half weighting and potential overall growth rate, and then asked about the long-term drivers for ATE market share growth to 46% as implied by the new target model.

Answer

CFO Michelle Turner highlighted a healthy backlog and better first-half visibility for 2026, cautioning against linearity due to the lumpiness of new sales patterns. CEO Greg Smith added that Q1 strength suggests a 2-3 quarter surge, but visibility for the second half is limited. Michelle Turner and Greg Smith then explained that the $6 billion revenue target within a $12-$14 billion ATE TAM implies a moderated share, driven by gains in compute, recovery in mobile and auto/industrial, and incremental growth in memory where Teradyne has expanded its presence.

C.J. Muse focused on DRAM, asking about KLA's historical share of wallet (7-9%) and its expected progression in 2026 and 2027, particularly with the evolution of HBM (HBM4 and HBM4E).

Answer

Rick Wallace (CEO) attributed higher DRAM adoption to factors like less redundancy, more metallization layers requiring inspection, and increased EUV usage, making DRAM intensity more similar to logic. Bren Higgins (CFO) added that reduced process variability flexibility for high-performance compute drives more rigor, creating growth opportunities in the service business for maximum uptime.

C.J. Muse asked about the progression of gross margins through 2026, given the 62% guide, and thoughts on 2027 regarding the ability to pass along higher DRAM costs and the impact of newer products on incremental gross margins. He also inquired about KLA's historical DRAM share of wallet (7-9%) and how it might progress in 2026 and 2027, especially with the evolution of HBM4 and HBM4E.

Answer

CEO Rick Wallace expects gross margins to trend north after March, driven by mix and volume, and remains comfortable with the long-term 63%+ gross margin profile. He anticipates continued incremental gross margin improvement into 2027 with cost normalization. Rick Wallace explained that DRAM intensity is increasing due to less redundancy, more metallization layers, and increased EUV use, making it more similar to logic. CFO Bren Higgins added that process variability flexibility is reduced for high-performance compute, driving more rigor and service opportunities.

C.J. Muse from Cantor Fitzgerald inquired about ASML's calendar 2026 outlook, specifically regarding the implied number of Low-NA tools, the impact of customer cleanroom space completion, Carl Zeiss lens sourcing, and potential lead time extensions. He also asked for an update on the vision for High-NA tool revenue in 2026, the potential for follow-on orders, and whether DRAM or Logic might adopt High-NA sooner.

Answer

CEO Christophe Fouquet explained that the 2026 outlook is largely driven by customer progress in completing fabs and ASML's execution in ramping production. CFO Roger Dassen clarified that the implied Low-NA unit number in the backlog might be on the high end. Christophe added that there are no major changes to the High-NA adoption timeline, with good progress at both DRAM and logic customers, and decisions for new orders expected in the second half of 2027. He noted it's a "neck-to-neck race" between DRAM and logic for early adoption.

C.J. Muse asked for clarification on ASML's calendar 2026 outlook, specifically regarding the implied Low-NA EUV tool shipments versus current bookings, and factors like clean room space, Carl Zeiss lens sourcing, and lead times. He also inquired about the High-NA vision for 2026, potential follow-on orders, and whether DRAM or Logic might adopt High-NA sooner.

Answer

Christophe Fouquet, CEO, explained that the 2026 outlook's bandwidth is largely driven by customer fab completion progress and ASML's execution and ramp rate. For High-NA, he noted no major changes from the previous quarter, with good progress at both DRAM and logic customers, expecting new order decisions in the second half of 2027. Roger Dassen, CFO, clarified that the EUV backlog unit number referenced by Muse might be on the high end.

C.J. Muse from Cantor Fitzgerald followed up on CapEx, questioning if the relative growth was conservative given market conditions and if Micron was constrained by cleanroom space, asking for clarification on the company's philosophy regarding capacity additions. He also inquired about cost down trends for DRAM and NAND through calendar 2026 and potential temporary cost impacts from HBM3E to HBM4 transitions.

Answer

CFO Mark Murphy acknowledged supply issues for several quarters and that cleanroom space takes time, emphasizing that the industry is expected to be short on demand. He stated Micron is accelerating construction and tool installations within existing footprints and near-term expansions, with 2026 bit growth being supply-constrained. CEO Sanjay Mehrotra added that investments are being made in technology transitions and greenfield capacity, noting that in the medium term, Micron can only meet 50% to two-thirds of demand from key customers. Mark Murphy also highlighted strong cost execution, good yields, and that 1-gamma DRAM and G9 NAND ramps are proceeding well, expecting HBM4 to have a faster yield ramp than HBM3E.

C.J. Muse followed up on CapEx, noting that the relative growth seems conservative given current market conditions and questioned if Micron is constrained by cleanroom space or being overly judicious with capacity additions. He also asked about gross margin trends beyond the February quarter, specifically regarding cost reductions across DRAM and NAND, and potential temporary higher costs or yield impacts during the HBM3E to HBM4 transition.

Answer

CFO Mark Murphy explained that supply issues have been ongoing, with node transitions being the primary source of fiscal 2026 supply growth, and that cleanroom space takes time, leading to an industry-wide supply shortage. CEO Sanjay Mehrotra added that Micron is investing in technology transitions, greenfield capacity, and maximizing existing cleanroom output, but still only meets 50% to two-thirds of key customer demand in the medium term. Regarding gross margins, Mark Murphy indicated that while not guiding beyond Q2, margins are expected to strengthen through the year, albeit with more gradual expansion. Sanjay Mehrotra noted strong cost execution, good yields, and that HBM4 is progressing well with an expected faster yield ramp than HBM3E.

C.J. Muse asked about the evolution of customer engagement and the emergence of long-term agreements (LTAs) in the NAND market, similar to trends seen in the HD world. He also inquired about SanDisk's visibility, bit allocation strategies, and bit shipment growth opportunities for calendar years 2025 and 2026, considering current inventory levels and the BICS8 ramp.

Answer

Chairman and CEO David Goeckeler noted two phases of customer engagement: multi-quarter volume and price deals for certainty of supply, and proactive outreach from large data center customers seeking visibility and supply alignment through calendar year 2027. He emphasized that this is a welcome development for long-term CapEx decisions. EVP and CFO Luis Visoso added that SanDisk prioritizes strategic customers for allocation, focusing on growth and value creation, and aims to maintain market share while expanding in the data center segment through innovation like BICS8.

C.J. Muse asked about the evolution of customer engagement in an allocation environment, drawing parallels to the HD world's shift to long-term agreements, and inquired about Sandisk's visibility and bit allocation strategy. He also sought clarity on bit shipment growth opportunities for calendar years 2025 and 2026, considering current inventory levels and the BiCS8 ramp.

Answer

Chairman and CEO David Goeckeler noted two phases of customer engagement: multi-quarter deals for supply certainty and proactive discussions extending to calendar year 2027 for long-term demand alignment, especially from Data Center customers. EVP and CFO Luis Visoso added that Sandisk prioritizes strategic customers for bit allocation and aims to maintain market share while growing the Data Center business through innovation like BiCS8, with capital plans supporting mid to high teens long-term demand growth.