China Sales and Export Restrictions
Q: How will potential export restrictions affect China sales?
A: Lam Research anticipates that China revenue will moderate throughout the year due to potential changes in U.S. trade policy. They cannot forecast unforeseen policy changes but are prepared to respond accordingly. Despite this, they expect China to remain a significant market but acknowledge that adding entities to the restriction list could impact sales.

Gross Margin Outlook
Q: What factors will influence gross margins ahead?
A: Gross margins may moderate due to customer mix changes, particularly as sales to smaller customers reduce. Smaller customers, often in China, pay higher prices due to volume purchase pricing. Lam expects gross margins to be in the 46% to 48% range, depending on the mix. They are also continuing to invest heavily in R&D, which was 71% of total spending in the March quarter. ,

NAND Market Recovery and Upgrades
Q: How will the NAND recovery impact Lam's revenue?
A: Lam expects the NAND market to start recovering, with significant upgrade activity resuming, especially in 2025. Upgrades to existing equipment will drive higher capture rates for Lam compared to new greenfield expansions, potentially leading to similar revenue levels despite lower total WFE spend. Their strong installed base positions them well for this upgrade cycle. ,

DRAM Market and HBM Demand
Q: How is HBM demand affecting Lam's business?
A: High-bandwidth memory (HBM) demand is growing rapidly, requiring incremental investment in Lam's tools like the SABRE 3D and deep silicon etch. Their advanced packaging shipments will exceed $1 billion this year, driven by HBM's role in AI enablement. This growth in HBM presents a long-term opportunity for Lam. , ,

WFE Outlook for 2024
Q: What is Lam's outlook for WFE in 2024?
A: Lam has adjusted its WFE outlook upwards by $1 billion, mainly due to increased shipments into China that were previously underestimated. They expect WFE to be incrementally better than last year, with technology transitions like advanced packaging contributing to growth. ,

Impact of CHIPS Act Subsidies
Q: How will CHIPS Act subsidies affect future orders?
A: Lam anticipates that CHIPS Act-funded fabs will contribute to equipment demand in 2025 and beyond, particularly at leading-edge nodes where Lam expects better market share. They are prepared for increased volumes and feel well-positioned with capacity and supply chain readiness.

CSBG Revenue Trends
Q: What are the trends in CSBG revenue?
A: Customer Support Business Group (CSBG) revenue is expected to be flat this year. Growth in spares, indicated by double-digit percent increase quarter-on-quarter, is offset by softness in the Reliant business due to reduced mature node investment outside China. Increased spares sales suggest improving utilization rates and early signs of market recovery. , ,

Advanced Packaging Revenue Growth
Q: How is Lam's advanced packaging business performing?
A: Lam's advanced packaging shipments will exceed $1 billion this year, marking a significant milestone. Strong demand, driven by high-bandwidth memory and advanced packaging needs in AI and compute applications, is fueling this growth. Lam continues to invest in areas like panel processing to capitalize on this long-term opportunity. ,

Technological Transitions
Q: What role do technological transitions play in Lam's outlook?
A: Lam is positioned to benefit from technological inflections such as gate-all-around and the transition from tungsten to molybdenum in NAND. These transitions require new tools and processes, where Lam has strong offerings. For instance, the shift to molybdenum presents opportunities for Lam's deposition equipment, contributing to future growth. , , ,