Systems Revenue

Customer Support-Related Revenue

Memory

Foundry

Logic/Integrated Device Manufacturing

Total Revenue

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4b6bbe62713e9f9e697fcb45ddbc2f8010297fbac457312baf451358c9843779

Employee headcount (employees)

86fb4b12205b105696b9ac5ae3abb45a86e3d446c164265251d44df7622ca2c9

| Name                     | Position                                           | Start Date | Short Bio                                                                                                                                                                                                                                                                                                                                                     |
|--------------------------|----------------------------------------------------|------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Timothy M. Archer        | President and Chief Executive Officer              | Dec 2018   | Timothy M. Archer has been the President and CEO of Lam Research since December 5, 2018. He joined Lam Research in June 2012 as Executive Vice President and COO and was promoted to President and COO in January 2018. Previously, he spent 18 years at Novellus Systems, Inc.  **[0001140361-24-041891_ny20031746x1_def14a.htm:107]** **[0000707549-24-000106_lrcx-20240630.htm:20]** .                                                                       |
| Douglas R. Bettinger     | Executive Vice President and Chief Financial Officer| 2013       | Douglas R. Bettinger is responsible for Finance, Tax, Treasury, Investor Relations, and Corporate Analytics at Lam Research. Before joining in 2013, he was the CFO of Avago Technologies and held finance positions at Xilinx, Inc. and Intel Corporation  **[0000707549-24-000106_lrcx-20240630.htm:20]** **[0000707549-23-000102_lrcx-20230625.htm:20]** .                                                                                           |
| Patrick J. Lord          | Executive Vice President and Chief Operating Officer| Mar 2023   | Patrick J. Lord oversees Global Operations, Customer Support, Global Quality, and other functions. He joined Lam Research through the acquisition of Novellus in June 2012 and has held various leadership roles since  **[0000707549-24-000106_lrcx-20240630.htm:21]** **[0000707549-23-000102_lrcx-20230625.htm:21]** .                                                                                                                               |
| Neil J. Fernandes        | Senior Vice President of Global Customer Operations | Mar 2023   | Neil J. Fernandes joined Lam Research in 2012 through the acquisition of Novellus, where he was Vice President of Sales Operations. He has held various management positions in product marketing and process engineering  **[0000707549-24-000106_lrcx-20240630.htm:22]** **[0000707549-23-000102_lrcx-20230625.htm:21]** .                                                                                                                            |
| Ava A. Harter            | Senior Vice President, Chief Legal Officer, and Secretary | Jul 2024   | Ava A. Harter is responsible for global legal matters, ethics and compliance, global trade, and government affairs. She joined Lam Research in July 2024, having previously served as EVP and Chief Legal Officer at Whirlpool Corporation  **[0000707549-24-000106_lrcx-20240630.htm:22]** .                                                                                                               |
| Vahid Vahedi             | Senior Vice President and Chief Technology and Sustainability Officer | Mar 2024   | Vahid Vahedi has been with Lam Research since 1995 and has held various leadership positions, including Senior Vice President and General Manager of the Etch business unit. He became the Chief Technology and Sustainability Officer in March 2024  **[0000707549-24-000106_lrcx-20240630.htm:22]** **[0000707549-23-000102_lrcx-20230625.htm:22]** .                                                                                                 |
| Seshasayee (Sesha) Varadarajan | Senior Vice President of the Global Products Group | Mar 2023   | Sesha Varadarajan joined Lam Research through its acquisition of Novellus in June 2012. He has held various roles, including Senior Vice President and General Manager of the Deposition Business Unit  **[0000707549-24-000106_lrcx-20240630.htm:23]** **[0000707549-24-000106_lrcx-20240630.htm:20]** .                                                                                                                                               |
| Ita M. Brennan           | Director, Member of the Audit Committee            | Aug 2024   | Ita M. Brennan was appointed as a director effective August 30, 2024, and joined the Audit Committee on November 5, 2024. She has significant financial management expertise from her previous roles, including CFO positions at Arista Networks, QuantumScape Corporation, and Infinera Corporation  **[0000707549-24-000109_lrcx-20240828.htm:1]** **[0001140361-24-041891_ny20031746x1_def14a.htm:28]** **[0001140361-24-041891_ny20031746x1_def14a.htm:112]** **[0000707549-24-000109_lrcx_exx991xpraugust2024.htm:0]** .                                           |
| Mark Fields              | Director, Member of the Compensation and Human Resources Committee | 2024       | Mark Fields has been a Director at Lam Research since 2024. He has extensive experience in executive management, having served as President and CEO of Ford Motor Company. He has also served on the boards of several public companies  **[0001140361-24-041891_ny20031746x1_def14a.htm:115]** **[0001140361-24-041891_ny20031746x1_def14a.htm:6]** **[0001140361-24-041891_ny20031746x1_def14a.htm:4]** .                                                                                                         |

955319b710c7db25bc3c0062c113e48f4915537bea9c06bc85329164ff159ad6

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 **[0000707549-24-000128_lrcx-20240929.htm:7]** **[0000707549-24-000016_lrcx-20231224.htm:8]** **[0000707549-24-000106_lrcx-20240630.htm:88]**. 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 **[0000707549-24-000128_lrcx-20240929.htm:7]** **[0000707549-24-000016_lrcx-20231224.htm:8]** **[0000707549-24-000106_lrcx-20240630.htm:88]**.

1. **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 **[LRCX_3401409_17]** **[LRCX_3410490_5]** **[LRCX_3390218_11]**.
   - **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.

2. **Systems Revenue** - Encompasses sales of new leading-edge equipment in deposition, etch, and clean markets, supporting the fabrication of integrated circuits **[0000707549-24-000128_lrcx-20240929.htm:7]** **[0000707549-24-000016_lrcx-20231224.htm:8]** **[0000707549-24-000106_lrcx-20240630.htm:88]**.

60495b9cbe451ff76162644cda23b6a993f6c3d1b5f185f388d48a980728e952

Adjustments for Non-Cash Items [USD, M]

Stock-Based Compensation [USD, M]

Changes in Working Capital [USD, M]

Capital Expenditures (CapEx) [USD, M]

Proceeds from / Repayments of Debt [USD, M]

Share Repurchases [USD, M]

Dividend Payments [USD, M]

Net Change in Cash [USD, M]

c08010ef734d6dfbe4a1b4dc8d631480703b7a876361a2c43fd8b0d9d490af3a

b114f4bbb955377d49adb05e77af9719ebce2e3397e2c6e7698e533bc4d948d4

1. 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?
2. 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?
3. 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?
4. 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?
5. 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?

42965a668d2a1702293e2960a2868cdd05b83e5d4edc2d664d581b8a6bc0d854

China

Korea

Japan

Taiwan

United States

Southeast Asia

Europe

3dd092bf5f75062c989588f62ead4400d78740f1f08db4255d6bcd24d757a432

### Q1 2025 Earnings Call
- **Issued Period**: Q1 2025
- **Guided Period**: Q4 2024 (December 2024 quarter)
- **Guidance**:
  - **Revenue**: **$4.3 billion**, plus or minus **$300 million**  **[LRCX_3403394_5]** .
  - **Gross Margin**: **47%**, plus or minus **1 percentage point**  **[LRCX_3403394_5]** .
  - **Operating Margins**: **30%**, plus or minus **1 percentage point**  **[LRCX_3403394_5]** .
  - **Earnings Per Share (EPS)**: **$0.87**, plus or minus **$0.10**, based on a share count of approximately **1.29 billion shares**  **[LRCX_3403394_5]** .

### Q4 2024 Earnings Call
- **Issued Period**: Q4 2024
- **Guided Period**: Q3 2024 (September 2024 quarter)
- **Guidance**:
  - **Revenue**: **$4.05 billion**, plus or minus **$300 million**  **[LRCX_3395339_6]** .
  - **Gross Margin**: **47%**, plus or minus **1 percentage point**  **[LRCX_3395339_6]** .
  - **Operating Margin**: **29.5%**, plus or minus **1 percentage point**  **[LRCX_3395339_6]** .
  - **Earnings Per Share (EPS)**: **$8**, plus or minus **$0.75**, based on a share count of approximately **131 million shares**  **[LRCX_3395339_6]** .

### Q3 2024 Earnings Call
- **Issued Period**: Q3 2024
- **Guided Period**: Q2 2024 (June 2024 quarter)
- **Guidance**:
  - **Revenue**: **$3.8 billion**, plus or minus **$300 million**  **[LRCX_3380467_5]** .
  - **Gross Margin**: **47.5%**, plus or minus **1 percentage point**  **[LRCX_3380467_5]** .
  - **Operating Margins**: **29.5%**, plus or minus **1 percentage point**  **[LRCX_3380467_5]** .
  - **Earnings Per Share (EPS)**: **$7.50**, plus or minus **$0.75**, based on a share count of approximately **131 million shares**  **[LRCX_3380467_5]** .

### Q2 2024 Earnings Call
- **Issued Period**: Q2 2024
- **Guided Period**: Q1 2024 (March 2024 quarter)
- **Guidance**:
  - **Revenue**: **$3.7 billion**, plus or minus **$300 million**  **[LRCX_3370734_5]** .
  - **Gross Margin**: **48%**, plus or minus **1 percentage point**  **[LRCX_3370734_5]** .
  - **Operating Margins**: **29.5%**, plus or minus **1 percentage point**  **[LRCX_3370734_5]** .
  - **Earnings Per Share (EPS)**: **$7.25**, plus or minus **$0.75**, based on a share count of approximately **132 million shares**  **[LRCX_3370734_5]** .
  - Additional note: The March 2024 quarter will have higher spending due to it being a **14-week quarter**, and there will be growth in R&D spending  **[LRCX_3370734_5]** .

48c05af21872c2aa2344882e02ef35a92744a6ff45b16e8e9a12092939877dfa

bb96b1c488bd147f8f8d19f09cb5ce0001a0d397289f4a04b74c1aa0b06e8e72

23794d91c53ae875c8e247d72561e35d9d06ee07c70c9e0dbcc977a6d161504a

- **Applied Materials, Inc.** - Primary competitor in the dielectric and metals deposition market and the etch market  **[0000707549-24-000106_lrcx-20240630.htm:17]** .
- **ASM International** - Competitor in the ALD and PECVD markets  **[0000707549-24-000106_lrcx-20240630.htm:17]** .
- **Wonik IPS** - Competitor in the ALD and PECVD markets  **[0000707549-24-000106_lrcx-20240630.htm:17]** .
- **Hitachi, Ltd.** - Competitor in the etch market  **[0000707549-24-000106_lrcx-20240630.htm:17]** .
- **Tokyo Electron, Ltd.** - Competitor in the etch market and the wet clean market  **[0000707549-24-000106_lrcx-20240630.htm:17]** .
- **Screen Holding Co., Ltd.** - Competitor in the wet clean market  **[0000707549-24-000106_lrcx-20240630.htm:17]** .
- **Semes Co., Ltd.** - Competitor in the wet clean market  **[0000707549-24-000106_lrcx-20240630.htm:17]** .

25e764979a18fba97aa8fc326cc325cce4d792d4f0941a8443f366d538035db3

| Program Details          | Program 1          |
|--------------------------|--------------------|
| Approval Date            | **May 2024**  **[0000707549-24-000128_lrcx-20240929.htm:12]** **[0000707549-24-000128_lrcx-20240929.htm:55]** |
| End Date/Duration        | **No termination date**  **[0000707549-24-000128_lrcx-20240929.htm:12]** **[0000707549-24-000128_lrcx-20240929.htm:55]**  |
| Total additional amount  | **$10.0 billion**  **[0000707549-24-000128_lrcx-20240929.htm:12]** **[0000707549-24-000128_lrcx-20240929.htm:55]**  |
| Remaining authorization amount | **$9,821,006,000**  **[0000707549-24-000128_lrcx-20240929.htm:12]** **[0000707549-24-000128_lrcx-20240929.htm:55]**  |
| Details                  | The program may be suspended or discontinued at any time.  **[0000707549-24-000128_lrcx-20240929.htm:12]** **[0000707549-24-000128_lrcx-20240929.htm:55]**  |

481812d1d179e2bd956ba7ea8e5a9bbefeb8dd3b98a63a246cf468cd73cbfc20

**Quarterly guidance for Q4 2024:**
- **Revenue**: $4.3 billion ± $300 million  **[LRCX_3403394_5]**  (raised from $4.05 billion ± $300 million  **[LRCX_3395339_6]** )  
- **Gross Margin**: 47% ± 1 percentage point  **[LRCX_3403394_5]**  (no change from prior guidance  **[LRCX_3395339_6]** )  
- **Operating Margin**: 30% ± 1 percentage point  **[LRCX_3403394_5]**  (raised from 29.5% ± 1 percentage point  **[LRCX_3395339_6]** )  
- **Earnings Per Share (EPS)**: $0.87 ± $0.10  **[LRCX_3403394_5]**  (lowered from $8 ± $0.75  **[LRCX_3395339_6]** )  
- **Share Count**: Approximately 1.29 billion shares  **[LRCX_3403394_5]**  (raised from approximately 131 million shares  **[LRCX_3395339_6]** )  

3f403545995fe3f197d45ded71164a7c5781c851a8148df041ae0c793ce6d458

| Name               | Start Date | End Date | Reason for Change |
|--------------------|------------|----------|-------------------|
| Ernst & Young LLP | 1981  **[0000707549-24-000106_lrcx-20240630.htm:116]**  | Present  | Current auditor   |

0090fe48932a8a525c331b6cd8f04c76f31cc7b64f44856b3aa7bfe83901f524

274e3b80bea2477d4b9da3f95a5525fe1f6c3bf5d24bbb3ba163afe2247f8b06

- **Strong growth in advanced packaging and high-bandwidth memory (HBM) opportunities:** Lam Research's advanced packaging revenue exceeded **$1 billion** in 2024 and is expected to grow again in 2025, driven by increasing demand for HBM technologies like **HBM3 moving to 3D** and stacking from **8-high to 12-high die configurations**. Lam's expertise in through silicon via (TSV) processes positions them well for this growth.  **[LRCX_3413602_12]**
- **Significant upside from NAND market recovery:** Lam anticipates **NAND spending to increase** in 2025, driven by technology transitions to higher layer counts, such as moving to **256 layers and beyond**. This growth boosts both upgrade and new tool shipments due to the complexity of the transitions, including the adoption of multi-tier stacking requiring new **carbon gap fill tools** and **molybdenum processes** where Lam holds strong positions.  **[LRCX_3413602_10]** **[LRCX_3413602_7]**
- **Breakthrough in dry resist technology opening new revenue streams:** Lam's innovative dry resist solution has achieved a major milestone by being selected as the **production tool of record for high-bandwidth DRAM** at a leading memory customer. With hardware already in all customers' R&D facilities, this positions Lam to capitalize on new revenue opportunities as adoption of this technology grows.  **[LRCX_3413602_31]**

b196791bd6e70fcbcb1a54d72353fbdc6d703479dc8cdb8b52fe74085a93741c

- **Lam Research expects gross margin headwinds due to customer concentration**, which may lead to a slight decrease in gross margins as the year progresses. Doug Bettinger stated: “you're going to continue to see some headwinds from customer concentration. I think there's more headwind as we go through the year...”  **[LRCX_3413602_6]** , and “we have that customer concentration headwind that we got to deal with here.”  **[LRCX_3413602_13]**
- **New export controls on certain Chinese customers are expected to impact revenue by approximately $700 million in calendar 2025**, particularly in the second half of the year. Doug Bettinger mentioned: “the forecast we had from that group of customers was probably... **$700 million** or so that obviously we won't be able to ship to those customers... that revenue footprint... would have been a little bit second half weighted in 2025.”  **[LRCX_3413602_8]**
- **Increasing operating expenses due to investments in R&D and digital transformation may limit margin expansion**. Doug Bettinger indicated they will continue growing R&D and investing in digital transformation projects: “we will be growing R&D and continuing to grow investment in a digital transformation project...”.  **[LRCX_3413602_5]**  When asked about OpEx growth, he responded: “You'll get a little bit of leverage from us this year. So that's as much as I'm going to give you right now.”  **[LRCX_3413602_18]**

a59bb8f877628d12ab2b6109a840010fd970fd787a08e2602ba77b94891b5337

1. **Impact of China Export Controls**  
   **Q:** What's the impact of recent China export controls?  
   **A:** The new regulations restrict us from shipping to certain Chinese customers, resulting in an estimated loss of **$700 million** in revenue for calendar '25, which would have been **second-half weighted**. This aligns with what peers are experiencing.  **[LRCX_3413602_8]** 

2. **NAND Spending and Upgrades**  
   **Q:** How significant is NAND spending growth this year?  
   **A:** NAND is starting to come back and will be our largest year-on-year growth driver. Upgrades are key, as about **two-thirds of bits are still produced on nodes below 200 layers**, requiring upgrades and new tools like **carbon gap fill** and **molybdenum deposition**.  **[LRCX_3413602_10]** 

3. **CSBG Outlook and Reliant**  
   **Q:** Why will CSBG revenue be flat this year?  
   **A:** Reliant revenue is expected to decline due to reduced spending in mature nodes and lost Chinese customers, offset by strong upgrades in NAND. Overall, CSBG should be **flattish** year-over-year.  **[LRCX_3413602_15]** ,  **[LRCX_3413602_16]** ,  **[LRCX_3413602_18]** 

4. **Gross Margin Outlook**  
   **Q:** How will gross margins trend with Malaysia operations?  
   **A:** We've delivered over **100 basis points** improvement from our Malaysia strategy, with more to come. However, customer mix headwinds may offset some gains. We're pleased with our proactive approach to improving margins.  **[LRCX_3413602_13]** 

5. **Advanced Packaging Growth**  
   **Q:** What's the outlook for advanced packaging revenue?  
   **A:** We finished 2024 with advanced packaging revenue above **$1 billion** and expect growth again in 2025, driven by demand for **HBM3**, **through-silicon vias (TSV)**, and moves from **8-high to 12-high** stacks.  **[LRCX_3413602_12]** 

6. **Customer Concentration and China Sales**  
   **Q:** Will China sales decline due to customer concentration?  
   **A:** Yes, China revenue percentage will be down in '25 versus '24 due to customer headwinds increasing throughout the year.  **[LRCX_3413602_23]** 

7. **Operating Expenses and Investments**  
   **Q:** How will operating expenses change in 2025?  
   **A:** We'll increase spending, particularly in R&D and digital transformation projects, but revenue should grow faster than OpEx, resulting in some leverage.  **[LRCX_3413602_18]** 

8. **WFE Market and Outperformance**  
   **Q:** Is outperformance due to dep and etch growth or share gains?  
   **A:** It's both. Etch and deposition are becoming more important, and we're gaining share through new applications like **carbon gap fill** and entering new markets with technologies like **Aether**.  **[LRCX_3413602_14]** 

9. **Reliant Business Decline**  
   **Q:** How much is Reliant impacted by lost China customers?  
   **A:** We forecasted **$700 million** in revenue from restricted Chinese customers in '25, much of which would have been Reliant. Now, that revenue is gone, leading to a significant drop in Reliant sales.  **[LRCX_3413602_21]** 

10. **NAND Strength Amid Soft Demand**  
    **Q:** Why is NAND strong despite softening demand?  
    **A:** NAND spending is driven by technology migration to reduce bit costs and improve performance. Upgrades are efficient for advancing technology, and our high capture rate in upgrades benefits us amid the spending.  **[LRCX_3413602_25]** 

11. **Molybdenum (Moly) Adoption**  
    **Q:** Is the transition to moly broad-based and sustainable?  
    **A:** The transition to moly is a multi-year process. As customers move to higher layer counts in NAND (above 200 layers), moly adoption increases. While not a broad upgrade move yet, we expect moly to contribute more over the next several years.  **[LRCX_3413602_17]** 

12. **Revenue Expectations and Guidance**  
    **Q:** Should we expect revenues to be lower in the second half?  
    **A:** We guide one quarter at a time but note that WFE will grow slightly, and we expect to outperform WFE. Loss of revenue from restricted China customers, which was second-half weighted, should be considered in models.  **[LRCX_3413602_11]** 

13. **OpEx Growth Details**  
    **Q:** Will OpEx grow mid-teens again due to investments?  
    **A:** We'll guide one quarter at a time. There will be some leverage, with revenue growing faster than OpEx, but we're not providing specific OpEx growth rates now.  **[LRCX_3413602_19]** 

14. **Advanced Packaging and HBM Demand**  
    **Q:** How will advanced packaging and HBM grow this year?  
    **A:** We expect growth in advanced packaging revenue again in 2025, driven by HBM demand growing **50–70%** per year and transitions from **8-high to 12-high** and **3D SOIC**.  **[LRCX_3413602_12]** 

15. **Foundry Logic Spending and Market Share**  
    **Q:** How does leading-edge foundry logic spending impact you?  
    **A:** We're gaining share in leading-edge foundry logic through tools for **gate-all-around nodes** and strengths in advanced packaging. Foundry logic spending represents share gain opportunities for us.  **[LRCX_3413602_31]** 

16. **Cryo 3.0 Technology for QLC NAND**  
    **Q:** How is Cryo 3.0 impacting your QLC NAND opportunity?  
    **A:** Our **Cryo 3.0** technology is a breakthrough for etching deep, vertical holes in NAND flash memory, including QLC NAND, and can be used to upgrade existing systems, benefiting customers financially.  **[LRCX_3413602_27]** 

17. **Customer and Regional Concentration**  
    **Q:** Will customer and regional concentration remain similar?  
    **A:** Customer concentration is tied to geographic concentration. Expect similar concentration from December to March, but China concentration will be down year-over-year in '25 versus '24.  **[LRCX_3413602_20]** 

18. **WFE Market Size Clarification**  
    **Q:** Is the $100 billion WFE estimate unrestricted?  
    **A:** Yes, it's an all-in estimate, including restricted customers. We're describing it to the best of our ability, considering all factors.  **[LRCX_3413602_19]** 

19. **CSBG Revenue Flat Despite Upgrades**  
    **Q:** Why is CSBG flat despite strong NAND upgrades?  
    **A:** Reliant revenue is declining significantly due to loss of Chinese customers, offsetting gains from NAND upgrades. Overall, CSBG is expected to be flat.  **[LRCX_3413602_21]** 

20. **NAND Capacity Transition**  
    **Q:** How will NAND capacity mix change this year?  
    **A:** Over time, more installed base will be upgraded to nodes above 200 layers. The rate depends on NAND market conditions and device requirements, but we can't provide specific details now.  **[LRCX_3413602_29]** 

21. **Lam's Capture Rate in NAND Spending**  
    **Q:** How does wafer bonding affect your NAND capture rate?  
    **A:** Wafer bonding has minimal impact on our capture rate. Our focus is on tools related to the stack, like **carbon gap fill** and high-aspect-ratio etches. Device complexity opens opportunities for us.   

22. **DRAM Resist Deposition Opportunity**  
    **Q:** What's the revenue potential for DRAM resist deposition?  
    **A:** We've secured a production tool of record decision in DRAM resist deposition, which will ramp and generate revenue. While not huge dollars this year, it's an important milestone with hardware in all customers' R&D facilities.  **[LRCX_3413602_32]** 

23. **NAND Revenue and China Customers**  
    **Q:** Was recent NAND strength from restricted Chinese customers?  
    **A:** No, there was nothing from indigenous Chinese NAND customers. The strength came from core NAND customer upgrades.  **[LRCX_3413602_28]** 

24. **Cryo Technology for Other Devices**  
    **Q:** Can Cryo 3.0 be used beyond NAND?  
    **A:** Yes, **Cryo 3.0** technology can also be used for devices like DRAM that require high-aspect-ratio dielectric etch, providing broader applications and upgrade opportunities.  **[LRCX_3413602_27]** 

25. **CSBG Outlook Clarification**  
    **Q:** Is the flattish CSBG outlook for calendar '25?  
    **A:** Yes, we're referring to calendar '25 being flattish year-over-year for CSBG revenue.  **[LRCX_3413602_16]** 

26. **Lead Times and China Visibility**  
    **Q:** How are lead times and visibility in China?  
    **A:** Lead times haven't changed much and are similar globally. New regulations restrict shipments to certain Chinese customers, impacting us by about **$700 million**, which was second-half weighted in '25.  **[LRCX_3413602_8]** 

27. **Utilization Cuts vs. NAND Spending**  
    **Q:** Why is NAND spending up despite utilization cuts?  
    **A:** NAND spending is focused on technology migration to reduce bit costs and improve performance. Upgrades drive spending even amid soft demand, and our high capture rate in upgrades supports our growth.  **[LRCX_3413602_25]** 

0cd726d92958d712757e255a5a09be7cbe0ada3afceada98c3d8a694a16dd330

Lam Research reported advanced packaging revenue surpassing $1B in 2024, with further gains in 2025 as HBM memory demand soars (>50%/yr). NAND spending recovers on 256-layer transitions, but new China export controls cut ~$700M in potential revenue, pressuring margins.

3170bd769a8514d4a068bef05fa6f674a78b5a9403ed9c40554f1b91458a7a9b

**Quarterly guidance for Q3 2025:**
- **Revenue**: $4.65 billion ± $300 million  **[LRCX_3413602_5]**  (raised from $4.3 billion ± $300 million  **[LRCX_3403394_5]** )  
- **Gross Margin**: 48% ± 1 percentage point  **[LRCX_3413602_5]**  (raised from 47% ± 1 percentage point  **[LRCX_3403394_5]** )  
- **Operating Margin**: 32% ± 1 percentage point  **[LRCX_3413602_5]**  (raised from 30% ± 1 percentage point  **[LRCX_3403394_5]** )  
- **Earnings Per Share (EPS)**: $1 ± $0.10  **[LRCX_3413602_5]**  (raised from $0.87 ± $0.10  **[LRCX_3403394_5]** )  
- **Tax Rate**: Low to mid-teens  **[LRCX_3413602_4]**  (no prior guidance)  
- **Customer Concentration**: Anticipated to remain consistent  **[LRCX_3413602_5]**  (no prior guidance)  
- **Operating Expenses**: Normal seasonal increase  **[LRCX_3413602_5]**  (no prior guidance)  
- **Other Income and Expense (OI&E)**: Slight negative bias  **[LRCX_3413602_4]**  (no prior guidance)  

c842d61b1f7ffbac8fc07b1cf11deeb9ad1290b54c0cb4742f16450ea8173a16

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| Year       | Amount Due [Millions] | Debt Type                  | Interest Rate [%]         | % of Total Debt         |
|------------|------------------------|----------------------------|---------------------------|-------------------------|
| 2024       | 504.1                 | Current Portion of Long-Term Debt and Finance Lease Obligations | N/A                     | 10.1% = (504.1 / 5,000) * 100 **[0000707549-25-000014_lrcx-20241229.htm:3]** |
| 2030       | 2,000.0               | Revolving Credit Facility  | 0.70% to 1.10% (SOFR-based) or 0.00% to 0.10% (Base Rate) **[0000707549-25-000014_lrcx-20241229.htm:13]** | 40.0% = (2,000 / 5,000) * 100 **[0000707549-25-000014_lrcx-20241229.htm:13]** |
| N/A        | 4,478.1               | Non-Current Long-Term Debt and Finance Lease Obligations | N/A                     | 89.6% = (4,478.1 / 5,000) * 100 **[0000707549-25-000014_lrcx-20241229.htm:3]** |

d50230e6955145c7dd9fec7af89e91486dee0d78ab4e19a9431690fdcbc3df97

- **Anticipated decline in China WFE spending** in the second half could impact revenues, given China's significant contribution of **approximately 30%** to Lam's sales ( **[LRCX_3403394_1]** ,  **[LRCX_3403394_21]** ).
- **Uncertainty around NAND spending recovery** poses risks; prolonged downturns or delays in technology conversions could adversely affect Lam's growth projections in the NAND segment ( **[LRCX_3403394_15]** ).
- **Dependence on adoption of new technology inflections** for growth involves risks; delays or increased competition in areas like gate all-around and advanced packaging could impact Lam's ability to **outperform overall WFE growth** ( **[LRCX_3403394_18]** ,  **[LRCX_3403394_10]** ).

30ba894a04799cd0ac80a1709d1678a0a81c9dd9ef3ec26b39ce50813b625ae7

1. **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**.  **[LRCX_3403394_6]** **[LRCX_3403394_9]** **[LRCX_3403394_11]** **[LRCX_3403394_13]** 

2. **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.  **[LRCX_3403394_6]** **[LRCX_3403394_7]** **[LRCX_3403394_8]** **[LRCX_3403394_11]** **[LRCX_3403394_12]** **[LRCX_3403394_18]** 

3. **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.  **[LRCX_3403394_7]** **[LRCX_3403394_11]** 

4. **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.  **[LRCX_3403394_9]** **[LRCX_3403394_12]** **[LRCX_3403394_19]** 

5. **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.  **[LRCX_3403394_7]** **[LRCX_3403394_8]** **[LRCX_3403394_11]** **[LRCX_3403394_17]** 

6. **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.  **[LRCX_3403394_7]** **[LRCX_3403394_27]** 

7. **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.  **[LRCX_3403394_8]** **[LRCX_3403394_11]** **[LRCX_3403394_18]** 

8. **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.  **[LRCX_3403394_6]** **[LRCX_3403394_10]** **[LRCX_3403394_13]** **[LRCX_3403394_25]** 

9. **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.  **[LRCX_3403394_10]** 

10. **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.  **[LRCX_3403394_14]** **[LRCX_3403394_22]** 

11. **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.  **[LRCX_3403394_8]** 

12. **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.  **[LRCX_3403394_22]** 

13. **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.  **[LRCX_3403394_11]** 

14. **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.  **[LRCX_3403394_14]** **[LRCX_3403394_24]** 

15. **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.  **[LRCX_3403394_13]** 

33204a7b7094c193aafeac3cb30673f4051d2c5a6c0c19bf2272f0d4428b5495

- **Expected Gross Margin Decline Due to Less Favorable Customer Mix**: Lam Research anticipates that the favorable customer mix contributing to higher gross margins will mitigate as the year progresses, potentially leading to lower profitability.  **[LRCX_3370734_5]**
- **Elevated Inventory Levels, Especially in Memory**: The company has accumulated excess inventory in the memory segment due to a dramatic decline in memory demand. This poses a risk if the memory market recovery is slower than expected.  **[LRCX_3370734_34]**
- **Increasing Operating Expenses Ahead of Revenue Growth**: Lam Research plans to increase R&D spending, which will raise total operating expenses. This investment is occurring ahead of anticipated revenue growth, which may pressure margins in the near term.  **[LRCX_3370734_11]**

0128c2bff176fb1ff1ed03da112f1c68756e5b904119e9093255c6ab9cdebde8

- **Loss of a large NAND customer in China due to regulations is impacting revenue and is difficult to replace.**  **[LRCX_3395339_20]** **[LRCX_3395339_26]**
- **Weakness in mature node spending outside of China due to high inventories, delaying investments until inventories adjust.**  **[LRCX_3395339_27]** **[LRCX_3395339_18]**
- **Gross margins are expected to face headwinds in the second half of the year due to customer mix, potentially leading to declines.**  **[LRCX_3395339_10]**

26aacb8c01fd8571975fbe454caff3876efaaeb285e66bd7c15d45d5f9f50b94

1. **Memory Spending Recovery**  
   **Q:** Can you discuss expectations for memory segment, given litho peer's large DRAM orders?  
   **A:** Forecasting WFE is tricky, but we see WFE up this year, modestly recovering due to memory, with a stronger exit to the year. Memory spending across DRAM and NAND has been at unsustainable low levels, so it's not a surprise it will correct itself. We have strong positions in high-bandwidth memory and DDR5 applications, established from recognizing DRAM opportunities years ago.  **[LRCX_3370734_6]** 

2. **NAND Supply-Demand Outlook**  
   **Q:** What's your assessment of NAND supply-demand, and when will customers start adding tools?  
   **A:** Utilization cuts were severe in NAND last year, leaving significant capacity offline that needs to return. The key question is at which technology node capacity should restart; there's a high likelihood that technology upgrades will occur as equipment is reactivated. We expect a revival of utilization-driven revenue from spares and services, as well as technology upgrade revenues, representing the majority of NAND spending this year.  **[LRCX_3370734_21]** 

3. **Gross Margin Normalization**  
   **Q:** What's the right normalized margin; is mix helping by 50 basis points?  
   **A:** Customer mix is benefiting us again in the March quarter guidance, perhaps even more than last quarter. In the June quarter last year, we were around **46% gross margin** (45.7%), which is a reasonable starting point when mix normalizes back to typical levels. Operational improvements and moving to lower-cost locations should benefit margins as growth resumes.  **[LRCX_3370734_7]** 

4. **China Business Outlook**  
   **Q:** You mentioned China mix should decline; is China business slowing?  
   **A:** We are not seeing China slow down; it's purely about the timing of when spending occurs. We've consistently described our China business as **"stable."** Year-over-year, it's relatively steady, though half-on-half may look different in 2024 compared to 2023. Customer mix effects may lessen as we progress through the year.  **[LRCX_3370734_13]**   **[LRCX_3370734_18]**   **[LRCX_3370734_19]**   **[LRCX_3370734_20]** 

5. **DRAM Demand and HBM Impact**  
   **Q:** Your DRAM systems revenue was strong; what's driving this, and what's the outlook?  
   **A:** The strength in DRAM during the December quarter is driven by **high-bandwidth memory (HBM)** and DDR5, along with a China DRAM customer in the second half that wasn't present in the first half. Going forward, even if China demand adjusts, we expect growth in core DRAM and HBM as key drivers.  **[LRCX_3370734_26]**   **[LRCX_3370734_27]**   **[LRCX_3370734_22]** 

6. **CSBG Growth Outlook**  
   **Q:** How should we think about CSBG growth profile this year and beyond?  
   **A:** Our CSBG business was heavily impacted by utilization cuts, but with a much larger installed base now and pent-up demand, tools need upgrading. We anticipate that upgrading the installed base will generate significant revenue. This business not only provides stability but also opens new growth channels as we innovate around the installed base.  **[LRCX_3370734_9]**   **[LRCX_3370734_16]** 

7. **OpEx and R&D Spending**  
   **Q:** Is total OpEx up, and how are you approaching R&D growth this year?  
   **A:** Total OpEx is likely increasing, with R&D rising more substantially. Last quarter, **69% of total spending** was in R&D, a high watermark. We're intentionally growing R&D investment due to the significant opportunities we see. As we progress through the year, we'll continue to invest in R&D, and we might not see the historic leverage we've previously delivered.  **[LRCX_3370734_11]**   **[LRCX_3370734_15]** 

8. **Delivery Times and Visibility**  
   **Q:** Where do delivery times stand, and how quickly can you react to increased demand?  
   **A:** Lead times have returned to more normal levels, but to ship within this year, we need to be informed about orders relatively soon. Our investments in manufacturing and supply chain operations closer to our customers help us respond faster. We typically aren't the bottleneck in terms of lead time when planning new fabs.  **[LRCX_3370734_30]**   **[LRCX_3370734_31]** 

9. **HBM Market Growth**  
   **Q:** How fast is HBM growing, and what's its impact on Lam?  
   **A:** As a key supplier in the HBM market, we're experiencing very strong demand. The AI market is evolving rapidly, and we're focused on expanding our capacity and capabilities to maintain our technology leadership. HBM-related advanced packaging steps are areas where we're exceptionally strong, and we're witnessing significant growth.  **[LRCX_3370734_32]**   **[LRCX_3370734_23]** 

10. **Revenue Growth in Second Half**  
    **Q:** Will Lam's revenue in the second half of 2024 be better than the first half?  
    **A:** Yes, we anticipate that it will be. We'll mirror the trajectory of WFE, which is expected to be somewhat stronger in the second half of the year.  **[LRCX_3370734_12]**   **[LRCX_3370734_24]** 

11. **Deferred Revenue Increase**  
    **Q:** Deferred revenue increased by $238 million; are customers still prepaying due to supply constraints?  
    **A:** When dealing with new customers whose creditworthiness may be uncertain—especially private ones—we require cash upfront before beginning tool manufacturing. That's what's contributing to the increase in deferred revenue.  **[LRCX_3370734_17]** 

12. **Inventory Composition**  
    **Q:** What's the composition of your inventory; is it more memory-related?  
    **A:** The decline in memory demand was dramatic, leading us to hold more inventory than needed specifically for memory. A larger portion of our inventory is targeted at memory, and as the memory market recovers, this inventory will decrease.  **[LRCX_3370734_33]** 

13. **NAND WFE Growth**  
    **Q:** Should NAND WFE exhibit the highest rate of improvement in 2024?  
    **A:** We wouldn't necessarily draw that conclusion. We believe every segment—NAND, DRAM, Foundry, Logic—will grow to a certain extent this year.  **[LRCX_3370734_28]** 

14. **DRAM Spending and Upgrades**  
    **Q:** How much did DRAM spending decline in '23, and what's the potential for node upgrades this year?  
    **A:** Overall, memory spending was down roughly **40%**; NAND was down over **70%**, so DRAM makes up the difference. In memory, equipment generally gets upgraded to the next node across the board.  **[LRCX_3370734_29]** 

15. **Backside Power Impact Timing**  
    **Q:** When will backside power become a meaningful driver for Lam?  
    **A:** It will rapidly become significant. Given the important role etch and deposition play and our strong position in processes like copper plating, backside power will meaningfully contribute as the industry shifts to more complex 3D architectures, which benefit our product offerings.  **[LRCX_3370734_31]** 

16. **HBM and DDR5 Margins**  
    **Q:** Do HBM and DDR5 differ from DDR4 in terms of margins?  
    **A:** From a margin standpoint, there's no significant difference. Building DDR5 die uses largely the same equipment as DDR4. The incremental aspects come with advanced packaging, such as deep silicon etch and electroplating, where we are exceptionally strong. This involves incremental equipment but doesn't materially change margins.  **[LRCX_3370734_25]** 

17. **CSBG Growth vs. Tools Business**  
    **Q:** Will your CSBG business grow in line with the tools business, or is there a lag?  
    **A:** It depends on the rate of WFE growth. Spares, services, and upgrades continue steadily and are expected to benefit as utilization returns. Overall growth will mirror WFE trends.  **[LRCX_3370734_23]** 

18. **Deferred Revenue Practices**  
    **Q:** Are customers still prepaying due to supply constraints?  
    **A:** We require upfront payments from new customers with uncertain creditworthiness before we start manufacturing tools, which explains the increase in deferred revenue.  **[LRCX_3370734_17]** 

19. **DRAM Demand Dynamics**  
    **Q:** How are China DRAM demand and core DRAM influencing your outlook?  
    **A:** The strength in DRAM is influenced by HBM and DDR5, along with activity from a China DRAM customer in the second half. Going forward, core DRAM and HBM are expected to grow, while China demand may adjust.  **[LRCX_3370734_27]** 

20. **Customer Mix and Gross Margin**  
    **Q:** Will you return to normalized gross margins as China mix changes?  
    **A:** The customer mix effects may lessen as we move through the year. Our gross margin remains strong in the March quarter guidance, and we expect normalization as the mix evolves.  **[LRCX_3370734_20]** 

10bdd1e726dda932179cce804635a7c61b9f523eea3d0a1432c54b828fb25eb2

- **Lam Research is on track to exceed $1 billion in advanced packaging shipments in 2024**, driven by strong demand in high-bandwidth memory (HBM) and expanding use cases.  **[LRCX_3380467_10]**
- **The company is well-positioned to benefit from industry transitions**, such as the move from tungsten to molybdenum ("moly") in NAND, which offers significant device benefits and productivity improvements. Lam believes it is **"well positioned to win that inflection"**.  **[LRCX_3380467_19]**
- **Lam expects incremental improvement in 2024 due to technology transitions like gate-all-around and advanced packaging**, anticipating performance **"incrementally better than it was last year"**.  **[LRCX_3380467_15]**

1be196826499fc39da09f8ec913d0bb42800de99b5d5e717a8a6bf43b466162a

- **Lam Research expects NAND spending next year to be stronger than this year**, anticipating growth opportunities from capacity upgrades to higher layer counts due to their higher share in etch and deposition intensity.  **[LRCX_3395339_26]** **[LRCX_3395339_16]**
- **Lam is confident it will outgrow WFE in the NAND space if investment is primarily upgrade-driven**, as upgrades represent an efficient way for customers to advance technology and lower costs, positioning Lam as the primary beneficiary.  **[LRCX_3395339_16]**
- **Lam has expanded its NAND product portfolio with innovations like the Pure Carbon gap fill process**, enhancing their served market and opportunities, which bodes well for future growth when NAND demand recovers.  **[LRCX_3395339_26]**

65107039d15a906f0fe7636bd7689c0d7d9c974dcbf0e6576012c5ad276ba413

1. **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.  **[LRCX_3380467_8]** 

2. **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.  **[LRCX_3380467_7]** ,  **[LRCX_3380467_16]** 

3. **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.  **[LRCX_3380467_17]** ,  **[LRCX_3380467_23]** 

4. **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.  **[LRCX_3380467_10]** ,  **[LRCX_3380467_11]** ,  **[LRCX_3380467_19]** 

5. **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.  **[LRCX_3380467_14]** ,  **[LRCX_3380467_15]** 

6. **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.  **[LRCX_3380467_13]** 

7. **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.  **[LRCX_3380467_9]** ,  **[LRCX_3380467_21]** ,  **[LRCX_3380467_25]** 

8. **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.  **[LRCX_3380467_10]** ,  **[LRCX_3380467_11]** 

9. **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.  **[LRCX_3380467_18]** ,  **[LRCX_3380467_19]** ,  **[LRCX_3380467_20]** ,  **[LRCX_3380467_28]** 

572ef6cdf4428825f18c44d840f19c4ad282e7279e70ebdd606c49b33b160060

- **Lam Research expects memory spending to recover in 2024**, driven by growth in DRAM from high-bandwidth memory capacity additions and node conversions.  **[LRCX_3370734_1]**
- **Shipments related to high-bandwidth memory (HBM) are anticipated to more than triple year-on-year in 2024**, significantly outpacing WFE growth in this segment.  **[LRCX_3370734_1]**
- **The company is increasing R&D investments to extend product and technology differentiation**, focusing on critical inflections like gate-all-around, backside power delivery, advanced packaging, and dry EUV patterning.  **[LRCX_3370734_1]** **[LRCX_3370734_11]**

d65decacca530f71cf98e5412a41de50f9202e7a7a7b97271cfa619d8b2d61e6

1. **China Sales Outlook**  
   **Q:** What is the outlook for China sales next year?  
   **A:** Management expects China to have a **solid year** in terms of spending in **2025**, despite this year's spending being somewhat first-half weighted. They emphasized that China is not going away, although spending can be lumpy due to customer size.  **[LRCX_3395339_10]** **[LRCX_3395339_24]** **[LRCX_3395339_25]** 

2. **Gross Margin Outlook**  
   **Q:** How will customer mix impact gross margins this year?  
   **A:** Gross margins are expected to face headwinds in the second half due to customer mix. Management guided to a **47%** gross margin in September and indicated there might be incremental headwinds into December because of customer mix changes.  **[LRCX_3395339_10]** **[LRCX_3395339_11]** 

3. **NAND Spending Outlook**  
   **Q:** Will NAND spending increase next year?  
   **A:** Management anticipates that NAND spending will be **greater next year** following two years of low spending. They expect significant upgrades in NAND, which should benefit Lam Research due to higher etch and deposition intensity in transitions to higher layer counts.  **[LRCX_3395339_25]** **[LRCX_3395339_26]** 

4. **DRAM Equipment Demand**  
   **Q:** Is DRAM equipment demand at the bottom, and will it improve?  
   **A:** DRAM equipment demand had declined due to concentrated mature node spending last year, but management sees demand **continuing to grow through 2025 and beyond**, driven by HBM adoption and the need for more wafers due to smaller bit sizes.  **[LRCX_3395339_13]** **[LRCX_3395339_12]** 

5. **Advanced Packaging and HBM Revenue**  
   **Q:** Has the advanced packaging and HBM revenue outlook increased?  
   **A:** The outlook has **moved higher** with very strong demand in advanced packaging and HBM. Management is expanding their global manufacturing footprint to respond effectively to this increase, and they like the environment where all parts of the business are supply constrained.  **[LRCX_3395339_19]** 

6. **Technology Inflections and New Tools**  
   **Q:** How significant are upcoming technology inflections for Lam?  
   **A:** Management sees **tremendous opportunities** with technology inflections like the transition to **4x DRAM nodes**, backside power delivery, and gate-all-around. They are introducing new tools with capabilities targeting ultra-small structures, which are critical for future DRAM scaling.  **[LRCX_3395339_12]** **[LRCX_3395339_29]** 

7. **CSBG Business Strength**  
   **Q:** Is the strength in CSBG sustainable?  
   **A:** Management expects the CSBG business to **modestly grow** this year compared to last year. The quarter was particularly strong due to Reliant and spares. They anticipate that **upgrades will become more prominent** as customers look to upgrade memory fabs that haven't been updated in some time.  **[LRCX_3395339_14]** **[LRCX_3395339_22]** 

8. **Export Controls Impact**  
   **Q:** Are export controls affecting Chinese customer behavior?  
   **A:** Management is not seeing any noticeable change in behavior from Chinese customers due to potential export controls. They continue to service customers as long as they are permitted to ship to them and are part of ongoing discussions with regulatory agencies.  **[LRCX_3395339_23]** 

9. **Leading Edge Node Tools**  
   **Q:** How is the new cryo tool different from competitors'?  
   **A:** The cryo tool delivers exceptional wafer results, achieving **10-micron** deep holes with less than a **10-nanometer** taper from top to bottom, at etch rates **2.5 times faster** than conventional tools. This is enabled by new surface chemistries and higher ion energy capabilities unique to their system.  **[LRCX_3395339_22]** **[LRCX_3395339_21]** 

10. **Inventory Levels**  
    **Q:** How should we think about inventory next year?  
    **A:** Management plans to consume existing NAND inventory as NAND demand strengthens next year, especially since much of the inventory supports NAND. They aim to get inventory turns back to historical levels, although additional inventory will be needed to support growth in other areas.  **[LRCX_3395339_28]** 

11. **Mature Node Spending**  
    **Q:** What is the outlook for mature node spending?  
    **A:** Mature node spending outside of China remains **soft** due to inventory buildup in analog, industrial, and automotive sectors. Investment in these areas won't meaningfully occur until inventories are adjusted. In contrast, China is currently **decent** in mature node spending.  **[LRCX_3395339_27]** **[LRCX_3395339_18]** 

00b8f1b6a6b3a95fe463ab11ace26cea879649e1c9ee770d615f9a02e53fad18

- **Expected decline in revenue from China in the second half of the year**, as China spending is weighted towards the early part of the year and will "modulate" later.  **[LRCX_3380467_12]** **[LRCX_3380467_7]**
- **Gross margins may decrease due to customer mix changes and lower China revenue**, possibly normalizing back to 46%.  **[LRCX_3380467_7]** **[LRCX_3380467_16]**
- **Operating expenses are increasing due to higher R&D investments**, which will continue regardless of revenue growth.  **[LRCX_3380467_7]**

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Lam Research Corp (LRCX)

Financials