Lam Research Corp (LRCX)

China Sales Outlook
Q: How will China revenue impact results going forward?
A: China revenue is trending down but remains important. We expect China's contribution to our total revenue to be lower next year as other markets strengthen. Despite the decline, China is not going away. - - - -

WFE Growth and Guidance
Q: What is the outlook for WFE spending in 2025?
A: We believe year-on-year WFE overall will be up next year, driven by strength in leading-edge foundry and logic, DRAM, and advanced packaging. Although China WFE is expected to be lower, growth in other regions due to technology inflections will support overall growth. - - - - - -

NAND Market Recovery
Q: How confident are you about NAND WFE growth next year?
A: We anticipate the NAND market will recover, driven by the need for higher quality bits for AI and enterprise applications. Technology upgrades, such as shifting to advanced nodes with molybdenum transitions, play to our strengths and position us well for growth. - -

Gross Margins Impact
Q: Can gross margins remain stable despite China mix decline?
A: While the reduction in China mix is a headwind, we're implementing operational efficiencies—like relocating closer to customer fabs, lowering costs, and shortening supply chains—which we believe will offset mix impacts and improve gross margins. - - -

Advanced Packaging Growth
Q: How is advanced packaging contributing to growth?
A: Our advanced packaging business, driven by AI demand, exceeded expectations, achieving over $1 billion this year. This area continues to strengthen beyond our original forecasts, and we don't expect it to slow down anytime soon. - - - -

DRAM Market Trends
Q: What are your views on the DRAM market?
A: Our DRAM outlook remains positive. The transition to DDR5 and the growth in high-bandwidth memory require incremental equipment. We believe DRAM WFE will grow again next year. - -

Technology Inflections Impact
Q: How are technology inflections impacting your business?
A: Transitions like gate-all-around, backside power distribution, and dry photoresist are increasing etch and deposition intensity, benefiting us. These inflections allow us to gain share and expand our market, positioning us to outperform WFE growth. - - -

CSBG and Reliant Business
Q: How is China slowdown affecting CSBG and Reliant?
A: A reduction in China WFE could be a headwind for our Reliant business. However, other components like spares, services, and upgrades are driven globally. We see opportunities in equipment intelligence and automation, which will continue to drive CSBG growth. - - - -

Operating Expenses and Leverage
Q: Will operating leverage improve next year?
A: We've funded necessary growth projects and achieved over a full percentage point of operating margin leverage in our December guide. As revenue grows, we hope to continue delivering leverage into next year. -

Export Controls Impact
Q: How do export controls influence your China outlook?
A: Our view incorporates our best understanding of potential restrictions. While it's difficult to predict exact outcomes, we base our estimates on the best information available and factor in possible impacts on our China business. - -

Adoption of Molybdenum in NAND
Q: How does molybdenum adoption affect your growth?
A: Even though we're already strong in tungsten, molybdenum adoption represents a net gain for us. It resolves wordline resistance issues for customers and drives technology upgrades, leading to additional business. -

Dry Resist Adoption
Q: Has dry resist adoption timeline changed?
A: Dry resist adoption isn't necessarily tied to high NA EUV. Customers recognize benefits like shortened exposure times and improved defectivity, leading to earlier adoption across different nodes, including DRAM. -

Inventory Management
Q: How are you managing inventory ahead of recovery?
A: Inventory levels are managed based on business mix. Much of our inventory is geared towards NAND, which will be utilized as that market picks up. We're balancing this with components needed for strengthening segments. -

Revenue Growth Ex-China
Q: Are you expecting double-digit growth outside China?
A: We follow the same rigorous process in forecasting, considering customer expectations and orders globally. While China may decline, other regions show growth, contributing to our overall revenue guidance. - -

Peers' China Outlook
Q: How does peers’ China outlook affect your view?
A: It's hard to compare our outlook with peers due to differences in product types and shipment timings. Our exposure and growth in China may differ significantly from others, so our projections are based on our specific circumstances. -