Sreekrishnan Sankarnarayanan • TD Cowen

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CEO Gary Dickerson expressed high confidence in gaining share in key AI-driven inflections like gate-all-around and backside power, citing deep customer collaboration. CFO Brice Hill explained the Besi investment strengthens a five-year collaboration on die-to-wafer hybrid bonding, a critical technology for energy-efficient computing.

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CEO Gary Dickerson expressed high confidence in gaining share through major AI-driven inflections like gate-all-around and backside power, citing deep customer collaborations that provide high visibility. CFO Brice Hill explained the Besi investment strengthens a five-year collaboration, as their combined die-to-wafer bonding solutions are critical for the future of energy-efficient computing.

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CEO Gary Dickerson reaffirmed the company is on track to capture over 50% of the incremental spending for GAA. He emphasized that 85% of the relevant steps are selective epi, an area where Applied has 'tremendous strength' and is bringing new innovations to market, expressing high confidence in the company's position.

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CEO Gary Dickerson asserted that this is not a 'one-shot thing.' He explained that the industry's relentless pursuit of energy-efficient computing makes all future architectural inflections—including backside power, 4F squared, and 3D DRAM—extremely challenging and valuable. He stated that Applied's unique integrated platforms are critical for these transitions, ensuring that the opportunity for value pricing is a sustainable, long-term trend.

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Interim CEO Ken Rizvi responded that while tariff uncertainty is a factor, Synaptics has not seen a direct impact and fundamentals remain strong, with healthy backlog, bookings, and lean channel inventory. Regarding PC share gains, Ken Rizvi and Vikram Gupta, SVP of IoT Processors, attributed the success to gaining significant share with a major OEM by providing innovative solutions, including AI features in touchpads and fingerprint sensors, at a competitive cost and quality.

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Interim CEO Ken Rizvi expressed confidence in a new phase of steady growth, projecting a path to ~$10 million in sequential revenue increases for the rest of the calendar year, driven by better visibility and lean inventories. He noted that while the Broadcom deal contributes to this, the underlying business has bottomed and is growing. He clarified the Google deal validates the Astra platform but its revenue ramp remains a fiscal '27 event. Head of IR Munjal Shah added that post-June, sequential growth comparisons will be organic.

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CFO Ken Rizvi acknowledged that March typically sees seasonality, particularly in the PC and sluggish automotive markets, which could impact the quarter. President and CEO Michael Hurlston explained that Synaptics has a first-mover advantage with its Wi-Fi 7 chip, expecting a $1-$2 ASP uplift and an 8-10% margin uplift compared to Wi-Fi 6, which he anticipates will hold for about a year before competition increases.

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Executive Jeffrey Andreson clarified the gross margin miss was due to internal execution challenges, not customer pressure on tariffs. He noted that their global footprint, including an exempt Mexico facility and operations in Malaysia and Singapore, provides a natural hedge. He attributed second-half confidence to sustained strength in NAND and DRAM, plus an expected recovery in the lithography business after a Q2 trough.

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Executive Jeffrey Andreson described NAND shipments as seeing a healthy uptick in Q4, continuing at a similar level into Q1 and likely Q2, with overall visibility now extending to 4-5 months. He confirmed the European epi customer is growing but is not expected to become a 10%+ customer in 2025. Andreson declined to provide a specific basis-point breakdown for proprietary product margin contribution but reiterated it is a primary driver of margin accretion.

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Executive Jeffrey Andreson confirmed that the company is seeing some true end-demand for gas panels in NAND applications, which he expects to strengthen in the first half of 2025. He clarified that proprietary content will primarily enhance the profitability of existing gas panels rather than raise ASPs, though some new applications represent incremental share gains.

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CEO John Lee stated the NAND strength is from industry upgrades and inventory burn-off, noting that gaining share is not possible when MKS is already at 100% market share. He confirmed MKS is engaged with major players on Pulse DC, but it is not yet in volume production. For the Atotech business, Lee noted some improvement in smartphone-related builds and expects the typical seasonal pattern (Q2/Q3 acceleration) for the consumer-related chemistry business to hold.

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CEO John Lee confirmed that 'green shoots' are appearing in NAND, with new orders starting to come in, though from a low base. He declined to guide for the June quarter but noted that future revenue depends on the mix of upgrade versus greenfield activity. Lee also explained that the step-up in operating expenses to the $250-$260 million quarterly range is for strategic investments in long-term growth and business efficiencies, while reiterating a commitment to 40% incremental operating margins as revenue grows.

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President and CEO John Lee responded that from MKS's perspective, the NAND market remains muted, noting that certain types of customer upgrades may not require new MKS equipment. For E&P, he clarified that the sequential growth was driven by two factors: increased bookings for flex PCB equipment for smartphones and a rise in orders for rigid PCB equipment and chemistry related to AI applications.

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President and CEO Fusen Chen explained that the Q3 slowdown is most pronounced in Southeast Asia, attributing it to customer hesitation in the auto and industrial sectors due to potential tariff impacts. He noted that while Southeast Asia is weak, utilization rates are improving in Taiwan and China, suggesting a potential recovery in Q4, contingent on macro clarity. Regarding TCB, Chen stated the company is growing in logic with IDMs, OSATs, and foundries, and is now increasing focus on the memory market, expecting to ship additional systems by year-end with hopes for results in 2026.

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CEO Fusen Chen stated that despite industry forecast revisions, he anticipates a stronger second half for fiscal 2025, with a normalized annual bonder revenue run rate of $500-$600 million expected by the end of the fiscal year. CFO Lester Wong clarified the margin strength was due to revenue recognition from systems related to the previously impaired 'Project W', not from TCB tools.

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President and COO Niels Anderskouv clarified the smart mobile dynamic was more about the roll-off of underutilization charges than inventory, noting new design wins in display, haptics, and audio have margins accretive to the business. CEO Timothy Breen reaffirmed confidence in the automotive growth story, stating it's driven by strong market share gains with key customers and new technology traction in areas like RADAR and power management, independent of the weaker overall auto sales environment.

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CEO Thomas Caulfield and CBO Niels Anderskouv described a "constructive pricing environment" driven by differentiated, sole-source technologies, making ASP less of a focus than value capture from a rich product mix. Regarding China, Caulfield noted the threat of overcapacity is mitigated by GF's differentiation, while opportunities exist as Chinese fabless firms seek geographic diversification ("China+1") and through potential partnerships for the "China for China" market.

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CEO Thomas Caulfield stated that the largest foundry player has set a constructive tone for pricing due to cost pressures. He noted GF's pricing has been roughly flat, supported by LTAs, but sees an opportunity for better pricing in 2025 on non-LTA business to offset inflation. CBO Niels Anderskouv added that smart mobile is returning to growth, with design win momentum expanding beyond premier phones into China's 5G mid-tier market, driven by the 8SW, 9SW RF SOI, and 22FDX platforms.

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CEO Tim Cook explained that the $500 billion investment includes a mix of CapEx and OpEx across facility expansions and a new server manufacturing factory, but did not provide a specific breakdown. On AI, Cook noted that Apple is already shipping an LLM on the iPhone 16 and uses a hybrid approach of on-device processing, Private Cloud Compute, and integration with partners like ChatGPT, expressing excitement about the future roadmap.

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CEO Tim Cook stated that strong Mac growth was a combination of compelling M4 products driving double-digit growth in both upgraders and switchers. CFO Kevan Parekh noted that product margins benefited from a favorable mix towards Pro models and a positive commodity environment.

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CFO Luca Maestri explained that while R&D spending has grown, the company has also reallocated existing resources to AI, increasing investment intensity without necessarily changing the overall percentage of sales. CEO Tim Cook added that Apple has released many APIs for developers to integrate Apple Intelligence, which he believes will be great for the user experience and the ecosystem, though he did not forecast a direct impact on Services revenue.

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CFO Bren Higgins clarified that the Arizona investment cycle has been slow and most of the relevant customer business is currently directed to Taiwan, explaining the low U.S. revenue figures. He stated that while KLA has a global footprint, creating fully redundant manufacturing to segregate supply chains would be very difficult and require significant, long-term investment in a stable but different trade environment.

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CFO Bren Higgins estimated that China's revenue contribution would fall from 41% in 2024 to about 29% in 2025, implying a total China business decline of around 20%. He attributed KLA's resilience to its crucial role in process qualification and yield learning, which drives earlier and more consistent investment in new fabs compared to capacity-focused equipment.

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CFO Bren Higgins tempered the China math, stating the dollar amount could be flat or down slightly and he was providing directional guidance. He confirmed that rising process control intensity in DRAM is a tailwind for 2025, driven by the higher value, complexity, and reliability requirements of die used for High-Bandwidth Memory (HBM).

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CEO Greg Smith clarified that any customer pull-ins are utilizing existing capacity and have not driven new capital equipment orders for Teradyne. He confirmed order pushouts are primarily from automotive and industrial customers. Regarding the memory win, Smith explained it is for a high-speed performance test at the wafer level for stacked HBM4 memory with a customer where Teradyne did not have prior HBM3 business.

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CFO Sanjay Mehta confirmed the 15% growth outlook at the midpoint. He explained the revision from a higher figure was due to a reduced growth forecast for the robotics business, down to about 10%. However, he noted that the outlook for the Semi Test business has actually strengthened over the past 90 days. Mehta added that compute is expected to be the largest grower within SoC revenue in 2025.

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CEO Greg Smith described the OpEx increase as more cyclical, representing necessary investment in applications and support to win business with complex VIP devices, with an expectation that revenue will grow into this new spending level. For HBM, he stated Teradyne was qualified mid-year for post-stack die performance test at a major supplier and is in qualification at another, representing a share gain opportunity. In wafer sort, he expects market share to remain more aligned with traditional breakdowns.

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CFO Wendell Huang stated it was too early to comment on the second half but would provide an update next quarter. CEO C. C. Wei described N2 demand as 'very strong,' with new tape-outs exceeding those of N3 and N5 at similar stages. For the Japan fab, Huang said its capacity will be 40,000 wafers per month when fully ramped, with an insignificant revenue contribution for 2025.

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CEO Dr. C. C. Wei noted that while PC and smartphone unit growth is low-single-digits, increasing AI silicon content is driving healthy demand. CFO Mr. Wendell Huang added that advanced packaging revenue is expected to grow faster than the corporate average over the next five years. Its margin is improving and approaching the corporate level but is "not there yet."

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CEO Sanjay Mehrotra attributed pricing strength to fundamental demand drivers, including AI adoption and normalizing customer inventories, and stated Micron is driving for higher prices in the second calendar quarter. On HBM, he acknowledged that new products have a yield ramp but expects the 12-high product to command a premium over 8-high and be accretive to DRAM margins, noting the company's strong execution on its HBM3E ramp.

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CEO George Kurian described the enterprise AI cycle as being in the 'early innings,' with customers building out AI centers of excellence and data lakes, where NetApp is performing well. CFO Michael Berry clarified that the Q4 guidance includes approximately $9 million of revenue from Spot, based on an expected early March closing date for the divestiture.

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CFO Michael Berry stated that customer demand has not been significantly impacted by NAND pricing as budgets are set in dollars, and confirmed that NetApp has pre-purchased a large majority of its fiscal 2025 NAND supply. CEO George Kurian added that the new AFFA series has seen strong adoption and is performing well, complementing the C-Series and ASA families, contributing to the overall 21% year-over-year growth in the all-flash business.

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CFO Sheri Brumm stated China revenue was approximately $40 million in Q4 and $215 million for FY2024. Chris Cook, President of the Products Division, explained that the Q1 guidance softness is due to customer ramp issues and inventory digestion, not export controls. Both executives confirmed that UCT's in-China-for-China manufacturing footprint allows them to continue shipments to these customers without being impacted by the restrictions.

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CEO Stephen Kelley responded that the company is seeing strong traction in both conductor and dielectric etch applications, as the new technologies address fundamental challenges of throughput and yield in both areas. He noted the main difference is the power levels required. Kelley attributed the confidence in a stronger second half to the significant design win activity over the last 18 months, which is expected to start converting to revenue as new products ramp.

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CFO Jason Child explained that the long-term model assumes mid-to-high single-digit ACV growth, and the recent acceleration to the teens was an upside from AI and CSS adoption. He expects future growth to be driven more by royalties. He also stated that Arm China's contribution to ACV is in the 20-ish percent range, similar to its overall revenue mix.

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CEO Rene Haas confirmed that Arm is benefiting from the strength of local Chinese brands like Xiaomi, Oppo, and Vivo. He stated that the premium flagship market in China is now moving to Armv9, and this technology will subsequently waterfall down into mid-range phones, ensuring a strong growth trajectory for v9 adoption in the region.

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EVP & CFO Douglas Bettinger reported that lead times are globally consistent and largely unchanged. He quantified the impact of new China regulations as approximately $700 million in lost forecasted revenue for 2025, which was slightly second-half weighted. For the business split, he noted headwinds for the Reliant product line but highlighted that a strong year for upgrades, especially in NAND, would be a significant offset.

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CEO Timothy Archer stated that outperformance will come from Lam's high capture rate in NAND technology upgrades and the increasing etch and deposition intensity of major inflections like backside power and advanced packaging. CFO Douglas Bettinger added that the outperformance drivers are broad, including GAA and dry photoresist. He explained that current inventory is largely for the NAND segment and will be consumed as that market recovers.

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CFO Roger Dassen reiterated that the normalization of China sales is primarily due to the company working through a multi-year backlog, not just digestion or new export controls. CEO Christophe Fouquet explained that while HBM is driving aggressive capacity additions from some customers, the broader DRAM market is seeing a more modest recovery, leading to the view that the memory segment will remain strong but similar to 2024 levels.

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CEO Bob Bruggeworth reiterated that Qorvo's content at its largest customer is heavily skewed towards the higher-end Pro models. SVP Dave Fullwood stated that content in the upcoming Samsung flagship would be slightly reduced year-over-year due to a late modem change that cost Qorvo some sockets. Regarding China, Fullwood noted that while Qorvo is exiting the collapsing mid-tier, it continues to support Chinese OEMs in their premium and flagship devices.

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CFO Grant Brown declined to bucket the shortfall against consensus but noted a 'considerable amount' is from underutilization charges, which are expected to increase. He highlighted that China-based Android revenue is now under $100 million and down over 75% from its peak. To reach the 50% margin target, Brown cited a combination of factors: a better business mix from growth in HPA and CSG, improving profitability in CSG, and focusing on higher-value, integrated modules in the premium Android tiers.

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CFO Gianluca Romano confirmed that Seagate is confident in its ability to continue improving gross margin sequentially. He cited key drivers including the mix shift towards high-capacity drives, consistent pricing strategy, cost efficiencies, and a significant ramp in accretive HAMR products expected in the second half of the calendar year.

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CEO Dave Mosley explained that market share is an outcome of their strategy, which shifted a year ago to a 'build-to-order' model focused on predictability over volume, especially at the bottom of a cycle. He expects share to re-equilibrate as margins improve. CFO Gianluca Romano added that the pricing environment remains positive, contributing to gross margin expansion, and that the company maintains a good supply-demand balance.

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CEO Charles Giancarlo stated the forecast is based on expectations coordinated with the customer, but all sales volumes are to be determined, though Pure is the 'plan of record' for the customer's next-gen design. CFO Kevan Krysler confirmed the licensing fee for the technology and software will be tied to the capacity shipped.

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Executive Jeffrey Clarke did not provide a specific attach rate but stressed the immense storage opportunity, stating 'GPUs devour data.' He outlined a necessary 3-tier storage architecture for AI and highlighted Dell's PowerScale platform and upcoming Project Lightning as purpose-built solutions to capture this demand, positioning the company well.

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CFO Kris Sennesael described the demand ramp as normal, with a strong September followed by further growth in December, and anticipates a typical seasonal decline in the March quarter for the overall business. CEO Liam K. Griffin addressed the WiFi 7 cycle, highlighting a strong and broad design win pipeline with key players like Motorola, NETGEAR, Charter Communications, and even automotive customers like Mercedes-Benz, indicating a healthy, multi-faceted upgrade cycle is underway.

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CEO Mike Slessor explained that due to short lead times, visibility into 2025 is limited, but confirmed that softness in mobile and PC end markets is reflected in the Q4 outlook. Regarding HBM, Slessor noted the Q3 digestion was an expected pause following record Q2 shipments. He stated that Q4 HBM growth is driven by resumed spending from the leading provider and new activity from another major DRAM customer.

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CEO David Goeckeler explained that the Flash market has mixed dynamics, with strong enterprise SSD demand offset by softness in PC and consumer markets. This results in a forecast for roughly flat blended pricing sequentially, with a slight cost headwind impacting margins. He acknowledged that there will likely be seasonality headwinds for both Flash and HDD going into the March quarter.

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