Lam Research(US:LRCX)2025-07-30 22:02Financial Data and Key Metrics Changes - The company reported record revenue of $18.4 billion for the fiscal year 2025, with a gross margin of 48.8% [19] - For the June quarter, revenue was $5.17 billion, a 10% increase from the prior quarter, and gross margin reached 50.3%, the highest since the merger with Novelis [18][19] - Diluted earnings per share for the June quarter were $1.33, exceeding the high end of guidance [29] Business Line Data and Key Metrics Changes - Foundry segment revenue represented 52% of systems revenue in June, up from 48% in March, marking a record quarter [20] - Memory accounted for 41% of systems revenue, down from 43% in the prior quarter, while non-volatile memory increased to 27% from 20% [21] - The Logic and Other segment decreased to 7% of systems revenue from 9% in the previous quarter [23] Market Data and Key Metrics Changes - Revenue from the China region increased to 35% from 31% in the prior quarter, driven by investments from global multinationals [24] - Korea and Taiwan revenues decreased to 22% and 19% respectively, down from 24% in March [24] - Japan revenue reached a record level in dollar terms at 14% of total revenue [24] Company Strategy and Development Direction - The company aims to expand its served available market (SAM) to the high 30% range of wafer fabrication equipment (WFE) by delivering critical solutions for atomic-level device scaling and advanced packaging integration [10] - Investments in R&D have created a competitive product portfolio, positioning the company to capture over 50% of incremental SAM over time [10] - The company is focusing on advanced packaging and etch intensity, which are expected to drive future growth [16] Management's Comments on Operating Environment and Future Outlook - Management expects WFE spending in 2025 to be around $105 billion, up from a previous estimate of $100 billion, primarily due to increased spending in China [8] - The company anticipates a balanced WFE environment in the second half of the year, with a strong position in key technology areas [9] - Management expressed confidence in outperforming the market due to strong demand drivers such as AI and advanced packaging [50] Other Important Information - The company generated free cash flow of approximately $5.4 billion, representing 29% of revenue, a record in dollar terms [19] - Capital expenditures for the June quarter were $172 million, down from $288 million in March, focused on lab investments and manufacturing facilities [31] - The company has $7.5 billion remaining on its share repurchase program [29] Q&A Session Summary Question: What are the key drivers of outperformance in the tool business? - Management highlighted foundry logic, selective etch, and ALD as key drivers, with advanced packaging also contributing significantly [37] Question: Will gross margins continue to benefit from China? - Management indicated that while there are favorable mix benefits, they expect gross margins to normalize around 48% in December due to various headwinds [40][41] Question: Is revenue expected to decline in December? - Management confirmed that December revenue is expected to mirror the flat WFE outlook, indicating a likely decline [46] Question: What is the outlook for NAND spending? - Management reiterated that NAND investments will require approximately $40 billion over several years for technology upgrades [87] Question: How is the company positioned for 2026? - Management expressed confidence in gaining share and expanding SAM, driven by strong product portfolio and technology advancements [85] Question: What is the impact of China on future revenue? - Management noted that while there was a strong uptick in China spending, they expect some normalization in the December quarter [115]