Timm Schulze-Melander

Timm Schulze-Melander asked about Arm's thoughts on SRAM and other memory structures for AI, particularly at the edge, and the cadence of power efficiency improvements from v8 to v9.

Answer

Rene Haas, Arm's Chief Executive Officer, stated that Arm continuously focuses on power efficiency due to battery life and space constraints in smaller form factors, especially with increasing AI compute demands. He confirmed high involvement in SRAM and alternative memory technologies, recognizing the critical link between CPU and memory in hardware design for AI. He reiterated that AI will impact every application, and Arm aims to be the compute platform of choice.

Timm Schulze-Melander inquired about Arm's thoughts on SRAM, SRAM at the edge, and different memory structures for its business, and the cadence of power efficiency improvements from V8 to V9.

Answer

CEO Rene Haas confirmed Arm's high involvement in SRAM and alternative memory technologies, emphasizing the critical interdependence of CPUs and memory in hardware design, especially for increasing AI demands. He stated that Arm continuously focuses on power efficiency due to constraints in smaller form factors and increasing compute demands, leveraging its incumbent position to address these challenges.

Timm Schulze-Melander asked about the projected revenue opportunity from the Stargate project over one, three, and five years, and sought clarification on how Lumex CSS, launched in September, was already generating royalty revenues.

Answer

Rene Haas, Arm's Chief Executive Officer, referenced the $500 billion Stargate project announced in January, noting that the demand for compute has only grown since then, despite infrastructure constraints. He expressed bullishness on the overall compute demand. Jason Child, Arm's Chief Financial Officer, explained that Lumex CSS royalties were earlier than expected because it was adopted by an existing CSS partner for their second generation, leveraging prior close collaboration to accelerate time to market and royalty generation within months of launch.

Timm Schulze-Melander asked about the projected revenue opportunity from Stargate over one, three, and five years, and for clarification on how Lumix CSS, launched in September, is already generating royalty revenues.

Answer

CEO Rene Haas stated that the demand for compute, particularly for the $500 billion Stargate project with OpenAI and SoftBank, has only grown since its announcement, despite power and infrastructure bottlenecks. CFO Jason Child explained that early Lumix CSS royalties are from a partner's second CSS adoption, allowing for rapid integration and demonstrating CSS's effectiveness in accelerating time to market.

Timm Schulze-Melander asked for more detail on royalty growth momentum for fiscal 2026 and whether licensing agreements are becoming structurally more complex and taking longer to close.

Answer

CFO Jason Child deferred specific FY'26 guidance but reiterated past comments about mid-20% royalty growth driven by v9 and CSS adoption. CEO Rene Haas added that CSS royalty rates also increase with new versions. On deal complexity, Jason Child stated there is no structural change, noting that while large, new contracts naturally take longer, the underlying factors remain the same.

Timm Schulze-Melander asked to what extent KLA's 2026 outlook, which mentions broadening demand, already incorporates high NA EUV engagements, or if that would represent an upside to the current outlook.

Answer

CFO Bren Higgins clarified that while there is R&D collaboration with customers on high NA EUV, its translation into revenue is not part of the 2026 outlook. He stated that the outlook is primarily influenced by the continuation of the N2 (2 nanometer) ramp across the customer base, not materially by high NA EUV adoption in that timeframe.

Timm Schulze-Melander asked to what extent KLA's 2026 outlook, particularly the broadening demand, already incorporates high NA (numerical aperture) engagements or if that would be an upside.

Answer

CFO Bren Higgins clarified that high NA engagements are primarily on the R&D front and do not materially translate into revenue as part of the 2026 outlook, which is more focused on the continuation of the N2 (2 nanometer) ramp across the customer base.

Timm Schulze-Melander requested a gross profit bridge from the December to March quarter and asked for more detail on why the service business is the primary source of tariff impact and how KLA might respond long-term.

Answer

CFO Bren Higgins explained the margin improvement from Q4 to Q1 was due to a favorable product mix with more higher-value systems. He detailed that the service business is uniquely affected by tariffs because its high contract penetration makes KLA the importer of record for service parts into regions like China. Long-term responses include process optimization and potential pricing strategy adjustments.

Timm Schulze-Melander asked why there appears to be stable, albeit lower, visibility for China over the next few quarters, while visibility for leading-edge logic seems much more uncertain.

Answer

CFO Brice Hill clarified that visibility is not necessarily better in China. The forecast is based on an expectation of a natural digestion period following a massive investment year in 2024. In contrast, the uncertainty in leading-edge logic stems from customers making commitments later in the current environment, which has reduced the multi-quarter visibility the company previously had.

Timm Schulze-Melander inquired about Applied Materials' appetite for risk in the fast-growing and evolving advanced packaging market, particularly regarding investment in new and potentially unproven technologies.

Answer

CEO Gary Dickerson stated that while advanced packaging is a key inflection, the company's investment risk is mitigated by high visibility into the industry roadmap. He explained that through a strategy of 'high-velocity co-innovation' with customers, Applied can confidently place bets on new technologies, noting the packaging business has grown 4x in the last five years.

Timm Schulze-Melander inquired about Applied Materials' strategy in advanced packaging, specifically asking about the company's appetite for risk when investing in new and potentially evolving technologies to serve this rapidly growing market.

Answer

CEO Gary Dickerson described advanced packaging as a critical industry inflection where Applied is a leader. He stated that the company's risk is mitigated by deep, collaborative relationships with customers ('high-velocity co-innovation'), which provide high visibility into the industry roadmap. He noted that packaging revenue has grown 4x in five years and he expects this high growth rate to continue.

Timm Schulze-Melander asked for more detail on the device applications for recent advanced packaging volume orders and for clarification on a deferred tax asset revaluation.

Answer

CEO Gary Dickerson stated that packaging revenue comes from a broad range of architectures, including HBM, but declined to comment on specific customer ramps. CFO Brice Hill explained the tax item was a non-cash charge from revaluing a deferred tax asset in Singapore due to newly renewed, lower incentive tax rates, calling it a one-time event.

Timm Schulze-Melander inquired about Lam's expected market share in Molybdenum (Moly) deposition over the next few years and asked about the profitability and scale of the advanced packaging opportunity.

Answer

President and CEO Timothy Archer did not provide a specific share target for Moly but highlighted Lam's leadership in ALD metalization and its first-mover advantage with tools in production. Regarding advanced packaging, he noted that increasing complexity grows Lam's SAM and that the company targets gross margins for these products that are similar to its other high-tech applications.

Timm Schulze-Melander of Rothschild & Co asked about Lam's market share outlook in Molybdenum (Moly) deposition and inquired about the size and profitability of the advanced packaging opportunity, particularly comparing different technologies.

Answer

President and CEO Timothy Archer expressed confidence in Lam's Moly leadership, noting they are the only company with ALD Moly in production for foundry logic and are building on their historical strength in ALD metallization. For advanced packaging, he stated that as schemes get more complex, Lam's SAM grows, and the company aims for these applications to have gross margins similar to its other technology-enabling products.

Timm Schulze-Melander asked for an update on the spares business within CSBG and for a long-term view on how the NAND opportunity will split between upgrades and new equipment sales.

Answer

CFO Doug Bettinger noted the spares business is performing well, benefiting from favorable utilization trends and a larger installed base. CEO Timothy Archer explained the NAND opportunity is already a mix of upgrades and new tools. He expects this mix to become more balanced over time, with new greenfield fabs eventually driving more new equipment sales as demand visibility improves.

Timm Schulze-Melander of Rothschild & Co Redburn asked for clarification on the implied sequential decline in Installed Base Management revenue in Q4. He also asked for an update on the key milestones customers still need to cross for High-NA systems to begin volume manufacturing.

Answer

EVP & CFO Roger Dassen explained that the implied Q4 decline is partly due to rounding in the full-year guidance and a mix shift where high upgrade business from H1 tapers off while EUV service revenue continues to grow. President & CEO Christophe Fouquet stated that High-NA is moving into its second phase, HVM qualification, where the key milestone is proving tool maturity and repeatable performance to build customer confidence for manufacturing.

Timm Schulze-Melander of Redburn Atlantic asked for details on the hybrid bonding technology moving to volume production, including the end application and whether it was done in-house. He also posed a long-term strategic question about how UMC views the competitive landscape given significant mature node capacity expansion in China.

Answer

President Jason Wang clarified that the wafer-to-wafer hybrid bonding is for RF front-end module applications and is performed in-house. On the long-term competitive landscape, Mr. Wang stated UMC's strategy is to build differentiation and minimize exposure to commoditized products. He highlighted UMC's geographically diversified manufacturing footprint across Asia, now extending to Arizona via a partner, as a key competitive advantage that offers customers supply chain resilience in a tense geopolitical environment.