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Lam Research Corporation is a global supplier of wafer fabrication equipment and services to the semiconductor industry. The company operates in the manufacturing and servicing of semiconductor processing equipment used in the fabrication of integrated circuits . Their offerings include systems revenue from sales of new leading-edge equipment in deposition, etch, and clean markets, as well as customer support-related revenue from services, spares, upgrades, and non-leading-edge equipment from the Reliant product line .
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Customer Support Business Group (CSBG) - Provides essential services including spare parts, service, equipment upgrades, and the Reliant product line, which focuses on mature equipment. The spare parts business is a crucial component for maintaining equipment productivity and yield .
- Spare Parts - Supplies necessary components to maintain equipment productivity and yield.
- Service - Offers maintenance and support services for semiconductor processing equipment.
- Equipment Upgrades - Provides enhancements to existing equipment to improve performance.
- Reliant Product Line - Focuses on mature, non-leading-edge equipment for semiconductor processing.
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Systems Revenue - Encompasses sales of new leading-edge equipment in deposition, etch, and clean markets, supporting the fabrication of integrated circuits .
- Given that the NAND spending recovery in 2025 is expected to be driven primarily by technology upgrades rather than capacity additions, how will this shift impact Lam's overall revenue growth and market share in the NAND segment?
- With China's revenue share expected to normalize to 30% in the December quarter amid ongoing geopolitical and regulatory challenges, how do you anticipate the evolving China landscape will affect Lam's business in the near term, and what strategies are you implementing to mitigate potential risks?
- You mentioned production wins for the molybdenum transition in NAND scaling in 2025; can you elaborate on the competitive dynamics in this area and how Lam plans to capitalize on this materials migration to drive incremental revenue growth?
- Considering the early adoption of Dry Resist technology in DRAM before the introduction of High NA EUV, could you provide more details on the adoption curve and whether it's progressing as originally anticipated, and what implications does this have for Lam's market position in DRAM?
- Some of your peers have adjusted their outlook for leading-edge foundry logic due to competitive dynamics among customers; how do you assess the potential impact of these dynamics on Lam's business, and what measures are you taking to maintain or grow your market share in this segment?
Competitors mentioned in the company's latest 10K filing.
- Applied Materials, Inc. - Primary competitor in the dielectric and metals deposition market and the etch market .
- ASM International - Competitor in the ALD and PECVD markets .
- Wonik IPS - Competitor in the ALD and PECVD markets .
- Hitachi, Ltd. - Competitor in the etch market .
- Tokyo Electron, Ltd. - Competitor in the etch market and the wet clean market .
- Screen Holding Co., Ltd. - Competitor in the wet clean market .
- Semes Co., Ltd. - Competitor in the wet clean market .
Recent developments and announcements about LRCX.
Financial Reporting
- Revenue: $4.38 billion, a 5% increase compared to $4.17 billion in the previous quarter.
- Gross Margin: 47.4% (U.S. GAAP), slightly down from 48.0% in the prior quarter.
- Operating Income: $1.33 billion, representing 30.5% of revenue, up from 30.3% in the previous quarter.
- Net Income: $1.19 billion, with a diluted EPS of $0.92, a 7% increase from $0.86 in the prior quarter.
- Gross Margin: 47.5%, down from 48.2% in the prior quarter.
- Operating Income: 30.7% of revenue, slightly down from 30.9% in the previous quarter.
- Diluted EPS: $0.91, a 6% increase from $0.86 in the prior quarter.
- Systems Revenue: $2.63 billion, up from $2.39 billion in the prior quarter.
- Customer Support-Related Revenue: $1.75 billion, slightly down from $1.78 billion in the prior quarter.
- China: 31%
- Korea: 25%
- Taiwan: 17%
- United States: 9%
- Japan: 8%
- Southeast Asia: 7%
- Europe: 3%.
- Cash and Cash Equivalents: Decreased to $5.7 billion from $6.1 billion in the prior quarter, primarily due to capital return activities and capital expenditures.
- Deferred Revenue: Decreased slightly to $2.03 billion from $2.05 billion in the prior quarter.
- Revenue Guidance: $4.65 billion ± $300 million.
- Gross Margin: 47.9% ± 1% (U.S. GAAP).
- Operating Income: 31.9% ± 1% of revenue (U.S. GAAP).
- Diluted EPS: $1.00 ± $0.10 (U.S. GAAP).
- The company continues to benefit from strong demand in the semiconductor manufacturing sector, particularly in advanced deposition and etch applications.
- Despite a slight decline in gross margin, Lam Research has shown consistent growth in revenue and net income, reflecting operational efficiency and market demand.
Earnings Call
Lam Research (LRCX) recently released its earnings call transcript, highlighting several key points about its financial performance and strategic outlook. For the calendar year 2024, the company reported strong financial results with a revenue of $16.2 billion and diluted earnings per share of $3.36. The Customer Support Business Group (CSBG) revenue increased by 11% to $6.6 billion, and the gross margin reached 48.2%, the highest since Lam merged with Novellus in 2013.
In the December quarter, Lam's revenue was $4.38 billion, a 5% increase from the previous quarter. The gross margin for this quarter was 47.5%, slightly down from the September quarter due to an unfavorable customer mix. The company expects its deferred revenue balance to trend lower in 2025 but acknowledges potential fluctuations.
Management provided forward guidance, indicating that Wafer Fabrication Equipment (WFE) spending is expected to rise slightly to approximately $100 billion in 2025. They anticipate technology inflections, particularly in AI applications, to drive faster growth for Lam. The company is optimistic about its strategic investments in R&D and infrastructure, which are expected to yield significant product advances.
Analysts raised questions about various topics, including the impact of China export controls, NAND growth, and gross margin sustainability. Management noted that China revenue is expected to decrease in 2025 compared to 2024 due to customer headwinds. They also highlighted that NAND spending will primarily focus on technology upgrades, which aligns with Lam's strengths in capturing WFE spent on upgrades.
Overall, Lam Research is positioned to leverage its strategic initiatives and market opportunities to continue its growth trajectory in 2025.
Earnings Report
Lam Research Corporation (LRCX) Earnings Results for the Quarter Ended December 29, 2024
Lam Research Corporation has released its financial results for the quarter ended December 29, 2024. Below are the key highlights and trends from the report:
Key Financial Metrics
Non-GAAP Financial Metrics
Revenue Breakdown
Geographic Revenue Distribution
Cash Flow and Balance Sheet Highlights
Outlook for March 2025 Quarter
CEO Commentary
Tim Archer, President and CEO of Lam Research, stated:
“Lam is executing at a high level at a pivotal moment for semiconductor manufacturing. Increasing demands on chip performance play into Lam’s strengths, with advanced deposition and etch applications set to comprise a growing share of WFE. Our investments to win at key technology inflections are paying off, with more exciting opportunities ahead”.
Significant Trends
For further details, visit Lam Research's investor relations page or refer to their official press release.