Lam Research Earnings Call Transcripts
Fiscal Year 2026
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WFE market expectations have increased due to incremental clean room availability and strong AI-driven demand, with robust customer visibility extending into 2027. The company is outperforming peers through advanced 3D process investments, recurring service revenue, and disciplined capital allocation.
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AI-driven demand is accelerating growth and innovation across all device types, with significant investments in advanced packaging, new materials, and services. Operational improvements and strategic diversification have expanded margins and market share, while clean room constraints and regional shifts shape future opportunities.
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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 expanding margins. Capital returns and investments remain robust.
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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 a broad NAND upgrade cycle, with gross margins improving to 49.5% due to a strong product portfolio and close-to-customer strategy. Recurring revenue from services remains robust, and significant long-term opportunities exist in 3D architectures and NAND upgrades.
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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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March quarter revenue and profitability exceeded guidance, with record foundry revenues and gross margin. June quarter guidance points to further margin expansion and record profitability, despite ongoing tariff and macroeconomic uncertainties.
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WFE is set to grow modestly in 2025, with NAND upgrades, new product launches, and 3D architecture inflections driving higher share and revenue. Gross margin is targeted at 50% through Asia expansion and digital transformation, while CSBG and capital returns remain key growth pillars.
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Management highlighted confidence in outperforming WFE growth through vertical scaling, new tool introductions, and a strong CSBG business. Significant opportunities are seen in NAND upgrades, DRAM vertical scaling, and Foundry/Logic, with operational improvements and digital transformation supporting margin expansion.
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Lam is targeting significant SAM and share expansion through leadership in deposition and etch, driven by AI, 3D architectures, and advanced packaging. New products like Argos and Altus Halo, along with digital transformation and global manufacturing, support ambitious financial goals for 2028 and beyond.
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Revenue, gross margin, and EPS for the December 2024 quarter exceeded guidance, with strong growth in DRAM, foundry logic, and advanced packaging. 2025 guidance anticipates higher WFE spending, continued NAND upgrades, and flat CSBG revenue, while China exposure is set to decline due to export controls.
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Revenue and EPS exceeded guidance, marking five straight quarters of growth, with strong performance in advanced packaging and AI-driven segments. Gross margin and operating leverage improved, while China revenue share is expected to decline as other regions and technology inflections drive growth.
Fiscal Year 2024
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WFE spending is projected at $95 billion for 2024, with growth expected in 2025 driven by NAND upgrades, strong DRAM and advanced packaging, and technology inflections like gate-all-around. China’s WFE share is declining, while service and spares remain key revenue drivers.
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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 results exceeded guidance with strong revenue, margins, and EPS, driven by growth in CSBG and strategic investments. Guidance for September quarter anticipates continued revenue growth but some margin headwinds from customer mix. AI and memory upgrades are key growth drivers.
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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.