China Revenue Outlook
Q: How will China revenue change next year?
A: Management expects China's revenue contribution to decrease from about low 40% of sales in 2024 to around 30% plus or minus a couple of points next year, due to expected digestion and reduced investment in greenfield projects.

Leading-Edge Demand Growth
Q: Is the excitement about leading-edge spending broad-based?
A: Yes, demand for leading-edge nodes is driven by customers across multiple players, not just one foundry. Significant demand for 2-nanometer and additional demand for 3-nanometer technologies are leading to robust forecasts into 2025, fueled by growth in AI for both training and inference chips.

Offsetting China Downshift
Q: Will lower China revenue be offset by other spending?
A: Management believes the reduction in China revenue will be offset by increased spending in advanced foundry, logic, and memory, driven by leading-edge demand. Overall views on 2025 remain unchanged, with expectations of growth despite the China downshift.

Process Control Intensity at 2nm
Q: Is process control intensity higher at 2-nanometer nodes?
A: Yes, 2-nanometer nodes are expected to have higher process control intensity than 3-nanometer, with more inspection points and higher sampling rates due to tighter process windows and increased design variability, driving the need for more capacity and advanced metrology.

Growth in Patterning and Metrology
Q: Will patterning and metrology see growth next year?
A: Management anticipates growth in metrology and reticle inspection next year, driven by increased intensity in advanced nodes like gate-all-around transistors, backside power distribution, and advanced memory, as well as expectations for new design starts.

Gross Margin Outlook
Q: How should we think about gross margins moving forward?
A: Gross margins are expected to operate around 61.5%, with potential to be higher as current run rates continue. Mix variability can cause fluctuations, but over longer periods, margins tend to align closely with the incremental margin model of 60% to 65%.

DRAM Investment Outlook
Q: What is the outlook for DRAM investment next year?
A: Management expects incremental investment in DRAM next year, especially in advanced DRAM and high-bandwidth memory, coming off a very low base. Improved utilization rates and financial performance of customers are factors contributing to this expectation.

Advanced Packaging Opportunities
Q: Are there opportunities in advanced packaging?
A: Yes, growth in advanced packaging, particularly with high-bandwidth memory (HBM) devices, is driving increased process control opportunities due to higher reliability requirements and the cost of failure, leading to a need for higher-level inspection capabilities.

Export Controls Impact
Q: What is the impact of potential export controls?
A: Management does not want to speculate on hypotheticals regarding export controls. They have been receiving questions on this topic for over a year and will assess the impact once there is clarity and share more information then.

NAND Market Outlook
Q: What is the outlook for the NAND market next year?
A: Investment in NAND is expected to increase slightly next year from a very low base, driven by improved utilization rates and better financial performance of customers. However, no significant growth in absolute dollar terms is anticipated.