Lam Research Earnings Call Transcripts
Fiscal Year 2026
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March 2026 quarter delivered record revenue and EPS, with strong growth in memory and customer support segments. Guidance for June 2026 points to continued momentum, driven by AI demand and technology upgrades, with robust capital returns and expanding margins.
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Revenue and EPS exceeded expectations, with 10%-15% growth projected for the year. Edge AI now drives 80% of revenue, supported by new product cycles, indirect sales channels, and a semi-custom chip strategy. Long-term gross margin guidance remains at 59%-62%.
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Etch and deposition intensity, R&D focus, and advanced packaging have driven a shift toward balanced market exposure and strong growth in foundry, logic, and DRAM. Gross margin is targeted at 50% by 2027-2028, with recurring CSBG revenue and robust supply chain expansion supporting long-term profitability.
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Record 2025 revenue and profitability were driven by strong execution, technology transitions, and AI-fueled demand. Guidance for 2026 anticipates continued outperformance, with growth weighted to the second half due to industry clean room constraints.
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Record quarterly revenue and margins were achieved, driven by strong foundry and memory demand, especially from AI and high-bandwidth memory investments. New China export restrictions will impact future revenue, but growth is expected to continue in 2026, led by global multinationals and advanced technology transitions.
Fiscal Year 2025
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Flat to modest growth is expected in the first half of next year, with stronger acceleration in the second half, driven by DRAM, NAND upgrades, and advanced logic. Strategic investments in technology and services, including advanced packaging and cobots, are expanding market share and supporting margin growth.
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The meeting covered board elections, executive compensation, and a stockholder proposal to lower the threshold for calling special meetings, which was not approved. Management discussed global growth prospects and key technology drivers, with all official proposals except the stockholder one passing.
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Product innovation and close customer strategies are driving growth, with new tools like Akrion and TS3D supporting rising etch-and-dep intensity. Financial performance is strong, with record margins and a robust CSBG business. Market outlook remains positive, especially in foundry, NAND, and advanced packaging.
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Strong demand for etch and deposition tools, advanced packaging, and 3D architectures is driving growth, with significant market share gains and improved margins. Foundry sales now lead system sales, and advanced service offerings are enhancing customer value.
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Revenue and profitability reached record levels, with gross margin exceeding 50% and strong performance in foundry, NAND, and advanced packaging. Guidance for September remains robust, but December is expected to see lower revenue and margins due to mix and tariffs.
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WFE spending is set to grow mid-single digits this year, led by strong demand in foundry, DRAM, and NAND upgrades, with etch and deposition markets expanding due to 3D architectures. Gross margins have improved to 49.5%, and recurring service revenue remains robust, while China’s share of revenue is declining amid rising domestic competition.
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WFE spending and capital intensity are rising due to AI, device complexity, and regionalization, with etch-and-deposition outpacing industry growth. Diversification, innovation, and a global footprint have driven record margins and strong shareholder returns, while upgrade spending and advanced packaging fuel future growth.
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Lam is targeting $25–$27B revenue and 50% gross margin by 2028, driven by technology inflections in etch, deposition, and advanced packaging. Growth is fueled by strong execution in foundry logic, NAND upgrades, and operational efficiencies, with China mix expected to decline as leading-edge markets expand.
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Record March quarter with revenue, gross margin, and EPS above guidance, driven by strong foundry and NAND demand, operational efficiencies, and product innovation. June quarter guidance anticipates further growth, with continued focus on mitigating tariff impacts and expanding market share.
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WFE is set to grow modestly in 2025, with Lam's core segments benefiting from NAND upgrades, new product launches like Akara and Altus Halo, and strong demand in foundry, logic, and DRAM. The company targets higher margins and share gains, supported by Asia expansion, digital transformation, and robust CSBG growth.
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Management expects to outperform WFE growth through vertical scaling, new tool introductions, and a strong upgrade-driven installed base. Financial targets are supported by Asia-based manufacturing, digital transformation, and advanced service models, while regulatory headwinds in China are offset by focus on leading-edge global customers.
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Management outlined a strategy to expand market share and outpace industry growth by leveraging leadership in deposition and etch, launching breakthrough products, and doubling installed base revenues. Financial targets for 2028 include $25–27B revenue, ~50% gross margin, and $6–7 EPS, with a commitment to return 85%+ of free cash flow to shareholders.
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Revenue, margins, and EPS for the December 2024 quarter exceeded guidance, with strong growth in DRAM, foundry logic, and advanced packaging. 2025 is expected to see further gains from NAND upgrades and AI-driven technology, though China revenue will decline due to export controls.
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Q1 revenue and EPS exceeded guidance, marking five straight quarters of growth, with strong performance in logic, DRAM, and advanced packaging offsetting continued NAND weakness. Guidance for Q2 remains robust, and 2025 is expected to bring WFE and revenue growth, with China’s share declining as technology inflections drive outperformance.
Fiscal Year 2024
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WFE spending is projected at $95B for 2024, with growth expected in 2025 driven by NAND upgrades, DRAM, and advanced packaging. China WFE is set to decline, but mature node and customer support businesses remain significant. Gross margin headwinds are offset by manufacturing efficiencies.
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Export controls are reshaping the competitive landscape in China, with domestic firms facing new sourcing challenges. 2025 is expected to be a growth year for WFE, driven by NAND upgrades and strong DRAM and foundry demand. CSBG now exceeds 40% of revenue, and gross margins remain robust despite shifting customer mix.
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WFE market outlook for 2024 is mid-$90 billion, with strong demand in leading-edge logic, DRAM, and China’s mature nodes. Major R&D investments target Gate-All-Around, backside power, and advanced packaging, while CSBG and AI-driven services drive profitability. Dry photoresist and cryo-etch offer billion-dollar opportunities.
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June quarter revenue, gross margin, and EPS exceeded guidance, driven by strong CSBG and manufacturing milestones. Strategic R&D and digital investments position the company for growth as AI and memory upgrades drive WFE expansion, with China and advanced packaging as key contributors.
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Semiconductor equipment demand is set to grow as AI, automotive, and 3D architectures drive industry expansion toward $1 trillion in sales. China’s investment remains strong but will normalize as global recovery picks up, while Lam’s advanced packaging and HBM exposure fuel rapid revenue growth.