China DRAM Sales
Q: How is China DRAM demand affecting your results?
A: We saw high shipments of DRAM to China, consistent with an approximately $500 million increase seen in Q4. This elevated demand is expected to continue in Q2, after which we anticipate China mix to normalize from 45% to around 30% over the year.

2024 WFE Outlook
Q: How do you view the WFE market in 2024?
A: We expect DRAM to remain strong, NAND to improve slightly, and leading logic to be larger as gate-all-around and new investments ramp up. There will be some digestion in ICAPS and China after enormous growth in the past two years.

Continued Outperformance
Q: Will you outperform the market again in 2024?
A: We anticipate continued outperformance due to our strong positions in major inflections like gate-all-around and backside power distribution, which are incremental billion-dollar opportunities. We're well-positioned in DRAM, ICAPS, and Packaging.

Sculpta Technology Growth
Q: What's the update on Sculpta technology?
A: Sculpta, our breakthrough pattern shaping technology, offers a cost-effective alternative to EUV double patterning. We expect Sculpta revenue to grow to close to $200 million in 2024 and ramp to around $0.5 billion annually in the next few years.

2025 Market Optimism
Q: How do you see the market shaping up in 2025?
A: We're seeing improvements in inventories and utilization across the market, and our customers express optimism for 2025. We anticipate growth in semiconductor end markets and investment cycles on the leading edge.

Gross Margin Impact
Q: How will China mix normalization affect gross margins?
A: As China mix normalizes from 45% to around 30%, gross margin will come down from 47.9% to a more normal level. The underlying gross margin is approximately 46.7% without the higher China mix and will continue to improve slowly. We maintain our 2025 gross margin target of 48% to 48.5%.

HBM Growth Impact
Q: How will HBM growth affect equipment spending?
A: HBM accounts for about 5% of wafer starts. Customers are shifting capacity to HBM, which has larger die sizes, driving up utilization and eventually increasing equipment orders.

DRAM and NAND Recovery
Q: What's the outlook for conventional DRAM and NAND?
A: We're seeing improvements in inventories, pricing, and utilization in both DRAM and NAND. Utilizations have been low but are picking up, and we expect technology advances to drive spending.

CHIPS Act Delay Impact
Q: Are CHIPS Act funding delays affecting your programs?
A: Schedule changes are consistent with our outlook, and we don't expect changes to the ultimate destination of these projects. We're preparing our applications for CHIPS Act R&D funding.

ICAPS Growth and Outlook
Q: How much did ICAPS grow, and can leading-edge offset its decline?
A: ICAPS grew approximately 40% in 2022 and grew faster in 2023. We expect some digestion in ICAPS and leading-edge to accelerate but won't specify which force will be stronger.

China WFE Spending
Q: How do you view China WFE spending and concerns about duplication?
A: We don't see stockpiling and believe investments are rational and serving end markets. Over the next four years, we expect added wafer start capacity in China.

Advanced Packaging Revenue
Q: Can you clarify the $500 million HBM-related revenue?
A: We expect our HBM packaging business to increase to almost $500 million in 2024. Our overall Advanced Packaging revenue is around $1.5 billion.

Revenue Transition Timing
Q: Will there be a revenue dip due to ICAPS digestion and leading-edge pickup?
A: We recognize the dynamics but won't guide future quarters. The impact depends on which market force is stronger.

Materials Engineering Demand
Q: Will delayed high NA EUV adoption lead to more materials engineering?
A: Innovations are driven by new structures and materials like gate-all-around and backside power. These require advanced materials engineering, increasing our served market.

Leading-Edge Growth Source
Q: Is leading-edge strength from new fab builds or capacity additions?
A: Typically, it's from greenfield new fab build-outs.