LAM RESEARCH CORP — Call Transcript 2026

Morning. Thank you all for coming today. I'm Stacy Rasgon. I cover the U.S. semiconductor and semiconductor capital equipment sector here at Bernstein. It's my great honor to introduce our guest, the President and CEO of Lam Research, Mr. Tim Archer. Before I start, I want to mention, if you have questions you'd like to ask during the presentation, you should have a link or a QR code, I think, to the Pigeonhole form where you can submit those. I will get them up here, and we'll have time for Q&A at the end. Semi Cap. It's had a bit of a renaissance already over the last several years, but the capital equipment industry has really shifted into overdrive recently as AI has gone mainstream. With the demand profiles that we're seeing calling for at the end of the day, just simply more. More chips, more wafers, more tools. In that world, the contributions from companies like Lam are becoming more important than ever. To tell us all about it gives me great pleasure to welcome Tim to our session today. Thank you so much. I have to say, I've been super excited to sit down. This is actually my first session of the conference. I'm glad it's starting with you guys. Great. Let's just jump to it. Let's talk about AI. Clearly, as I said, it's created a renaissance in WFE. It wasn't that long ago that $100 billion in WFE was just sort of this aspiration that was out there, and we've blown through that now. Right? We'll probably do. I can't remember what your number is, $145 or something? $140 with a bias to the upside. Yeah, bias to the upside. As strong as that is, it's a constrained number, like we were short on clean room space. Maybe just at a high level to start us off, maybe just talk about what AI has done for wafer and equipment demand. Maybe by end markets like leading-edge logic, DRAM, flash, packaging, even lagging edge. Sure. What has it done for us? Yeah. First of all, I agree with you on this point of this is a renaissance. It's driven by AI demand that has really touched every segment of the equipment market, the devices, end device markets. In semis, by the way, you could've owned anything. It's gotten so big, it's dragging everything along with it feels like. I hope some have been better than others, I mean. Yeah. I think that we'll talk a little bit more about the markets we're in. As you said, AI, I think what's been most amazing about it is that it has driven performance, across every device type. There used to be, there would always be a discussion of what's good enough. In AI right now, more is more. You want to have more leading-edge compute power at the foundry logic side. You need more storage. You need more memory, higher bandwidth, lower latency. That's just created changes very rapidly to the architectures of devices, how they're packaged, the materials that are used to manufacture those devices, and so for an etch and deposition focused equipment company. It's a very exciting time. This time is different, is always sort of a dangerous kind of statement. I could make the argument that maybe it could be. How would you respond to that? Is this just a function of just demand is overwhelming? Is that what's different? Is there something different about the types of things that that demand is driving, like as it relates to you guys? How would you respond to that? Yeah. I think, as I was talking about, I think what is different is this almost insatiable desire for, and need for more performance. Yeah. Across all- We've always wanted more performance in the space, haven't we? Yeah, I think that in this case, it makes the end product that much more capable in a way that I think is a little bit unique. It's always been there. It is also quite unique that it's performance across all types of devices. Including packaging. I think that the other thing that's a little bit unique and maybe different is that we have visibility to these waves of demand. We've started in training, and that drove certain performance requirements around certain types of devices. Really accelerated this push towards more advanced foundry logic to get the compute, HBM to get that capability. Now, as we move into inference, and then we move into agentic AI, and ultimately into physical AI, we see different parts of the market and different requirements. We clearly now see much stronger demand for NAND, for instance than people had anticipated. Again, as you start to make this transition from training to inference into agentic. We've seen the same thing with CPUs, and therefore, different parts of the market, different process requirements, for some of those devices. I think that's perhaps what's different is the visibility into this roadmap and march of performance requirements that really allows us to marry up our roadmaps for new equipment new materials, and really engage customers to be ready as those waves come in. How much visibility are you actually getting now, and what does that look like versus what would've been typical a few years ago? It's interesting. We look at visibility in two different ways. What's most important for us is visibility to technology roadmap. The reality is, we are already engaged and qualifying for device architectures and materials that won't ramp into manufacturing until probably the early 2030s. Having that visibility, that customer intimacy where you're really exchanging what's possible around architectures and materials, that visibility has always been strong, and I would say today, in many ways, is even stronger because of the criticality of our tools to their ability to deliver products to their customers. Capacity visibility and those needs. I think, one, we could never ask for enough, and we never get as much as we want. I would say that. When you say that, you mean your own capacity or in your supply chain or? No, customer demand. Okay. Meaning that at this point, if you look at our WFE forecast, every call, we've used this term, we're in an accelerating demand environment. What that fundamentally means is every time we come to that next checkpoint, there's more than we thought there was. I would say that the visibility is not as good as we would desire, but it's much stronger, therefore it's exactly the good kind of lack of visibility. Got it. It's quite far into the future at this point. Got it. Maybe to go back to that point, clean rooms right now, would you say, is that the primary constraint on things right now? Yeah. We've been clearly vocal about the fact that clean rooms are constraining the ability to ship more. Obviously, there's a lot of activity in that space to try to bring new clean rooms online, but frankly, it just takes time. It's a big process to build one of these very advanced semiconductor fabrication facilities. That's why I'd say the visibility at this point. Once a fab starts construction, you kind of know where your demand is coming from maybe two years out. Right. I'd say we have quite nice visibility from that point. How many fab projects are you guys tracking right now? Oh. I don't know if you've ever given that number. I don't think we've given that number, but it's a lot. Hundreds, is it? I don't know if there would be. In terms of new greenfields, I don't think it's quite that number. Clearly every fab is also going through continual technology upgrades and refreshes to make sure that they have the capacity needed to meet the performance demands that really is where the market is today. Got it. Let's maybe take a look at the different end markets. Let's start with NAND. I know you guys used to be thought of as the NAND player, and you still are, not anymore, right? It used to be almost fully dependent on it-. Yep It's clearly not the case. I still remember, it seems quaint now, but it was a few years ago during the NAND trough, and it was before the stock split, but you guided something like a $5 EPS for the following quarter for a nominally NAND-focused semi cap company with no NAND in the guide, right? It was fine, right? The diversification story has done really well. At the same time, though, I don't know that we've seen a ton, especially given all the demand that there clearly is for NAND and for storage. We haven't seen a ton of greenfield builds yet. It's been primarily upgrades. That's right. My view has been the NAND guys decided they'd like to earn money for a change, which is a little new. I guess maybe talk a little bit about the differences between the NAND upgrades and expectations potentially for greenfield, because I feel like they've got to start adding greenfield at some point. I don't know how far the upgrades can carry us. Yeah. Actually, I'd love to answer that question, and I will in just a minute, but first I have to at least clarify a little bit of this Lam as the memory company. Yeah versus what we've become. Yeah. I think that's an important point. I think really transformed, I think. We still wear that memory leadership proudly. The reality is we've become so much more. If we went back five years ago, Lam, our business was about 60% memory. Yeah. Last year, it was 60% foundry logic. That was a deliberate strategy of ours to not give up this tremendous position we built as the enabler of a lot of these memory roadmaps. It was a strategy to diversify the company in a way that we could participate in a much bigger way in the device architecture inflections and the advanced packaging advances that were coming for foundry logic. I mentioned the visibility that's important to us is we see where these roadmaps are going five, six, seven, eight years in advance. Really about seven, eight years ago, we said, There's a huge wave coming for foundry logic. Advanced packaging is going to become a pretty big thing. We pivoted the company in terms of where we put a lot of our R&D spending, the new products we were developing. Now, it takes several years to get those products completed, it takes several years to get them qualified in customers, and now you really see that rolling through. I think you've seen Lam gaining, both expanding our SAM through this new portfolio, but also gaining share with those new products. I think every earnings call we've talked about low-k ALD, and we can get into all of this a little bit next. Yeah. But it's- be careful in this forum because I can start to go down rabbit holes. Exactly. we'll- With the audience. come back to your NAND question. The company has reshaped, but we have not given up that NAND leadership. I think that now you're starting to see that roll through, not through greenfields yet, but last year at our investor day, February 2025, we had talked about this upgrade cycle. In the NAND business for years, the upgrades had been sort of the natural way of making use of that installed base and just scaling the number of layers. This is simplistically using the install base to put out wafers with more bits. With more bits on them. wafer. Yes. What we had said last year was that it would take several years, but the customers would upgrade the tools they had in their installed fleet from the 100+ layer counts to 200+ layer count devices, and therefore get more bits, and also those bits might be higher performance, higher more capable bits. We've seen a dramatic pull in that upgrade cycle. We said several years, and now we, on our most recent call, said that entire $40 billion upgrade spending would likely be complete by the end of 2027. Now, that's. Have you said how far along we are on the $40 billion, by the way? We haven't really. Okay. We're, again, back to this accelerating demand environment. Okay. means most likely, it's from this point forward more back-end weighted. Okay. It's an indication of two things. One, the role of NAND within the AI hierarchy is becoming more prominent. There's stronger demand, whether that's for enterprise SSDs or use of NAND in KV cache or any of these new data storage projects that you've seen from companies. It also is the indication of your clean room shortage, which is there just weren't enough clean rooms available to satisfy all the demand of HBM and this rising demand. Yeah of NAND. I think that NAND has found itself first going through an upgrade cycle, but then eventually, as you've seen, as there's been shortages, effectively needs to start building greenfield. You've just started to see some of those announcements, but it takes a while to build those fabs, so it's still pretty far out there on the horizon. Right. I think that it's probably more of a 2028 and beyond event. Which I think from our perspective is fantastic because, again, we can focus right now on a lot of these upgrades, get the installed base up to that technology, and then as a next wave of growth for the company, really see these greenfields come in and the additional shipments that come from those that demand. Got it. Maybe two follow-ons to that. One is, do you care upgrades versus greenfield? What does your exposure look like between the two? Is one better than the other? Number two, just to clarify, the upgrades is really an installed base kind of business. You guys control the vast majority of the installed base. Yes That's out there in NAND, correct? Yes. We do. We are clearly the leader in NAND, and we're more importantly, the clear leader in the critical technologies that are required to enable the upgrade. Meaning, if you think about the way NAND flash is manufactured, with that big memory stack and then the etching and deposition done inside of that to create the devices, Lam has a significantly high market share of all of those steps. If the customer wants to build a taller device, typically the majority of the spending is actually on Lam equipment, to build taller stacks and create those devices. Upgrades are great for us. We have a very high % of the WFE that's being spent on the upgrade. Actually, greenfield's great, too because it grows our installed base, and it makes that next upgrade cycle. EVen that much bigger. I think that what I also want people to understand is when we put out the number that said $40 billion to upgrade from the 100X level to the 200X level, that's not a one and done. A couple of years down the road, 200X needs to go to 300X or 400X, and then that needs to go even bigger. You see our customers, there've been stories out and talk out about building 600, 700, 800, 900 layer NAND devices just recently. That's a roadmap that fundamentally we look to help enable in the years to come. In the upgrade, we capture a higher percentage of the customer spend. In the greenfield, we build- It's for the long term. an even bigger install base for an even brighter future. Both are good. Got it. Let's talk about some of the other segments. You mentioned advanced packaging. Yes That's clearly been on a lot of radar screens as Moore's Law is slowing or stopping. Innovation is not stopping. Yep What it means is we have to do other things, and packaging is clearly one of those other things. What does Lam actually do in advanced packaging? Where are you actually, where's your primary contribution? How big is this business for you now? Well, maybe I'll reach all the way back into, I think, the 1990s, when the Novellus portion of our company was known as the King of Copper. Yeah. Today, all these years later, we're still the King of Copper. If you think about advanced packaging, a lot of the copper plating, everything that's done to create the metal interconnect is an area where we're incredibly strong. Etching, of course, whatever the device, if it's HBM or it's advanced packaging. TSV etching, silicon etch is a big. TSV is the through-silicon vias, by the way. Through silicon Holes that go all the way through the wafer. That etch, but also advanced packaging has become quite a complicated. Yes architecture, and so there's a number of dielectric gap fills. Inter die gap fill, we call it, as well, to go in between chips. Just a number of steps. If you look at the advanced packaging and you think about where the money gets spent, a very large percentage of the dollars are directed towards etch and deposition applications. Essentially, it's a building and interconnect type of architecture, and so it's really great for our portfolio. Got it. How big is that for you now, and how's it growing? Yeah, we said that this year it would grow over 50% from our prior year. Did you give a dollar number or? We've sized it in the range of around $2 billion. $2 billion. Okay. Maybe that's probably about as close as we're going to get. Okay. Clearly growing and then certainly, I think, gaining in importance as the complexities of these chips continue to. Yeah, no, it is a fast-growing area. Again, it enables, as you said. The end customer to create something that's very difficult to create on the chip itself. To your point of when shrinks aren't the best way to get to an answer, the industry's finding ways to create an alternative path to now. Get out and do that. Got it. Got it. When you were talking about memory before, but you were known as the memory player, but it was still mostly NAND. What do you guys do in DRAM? Clearly, there's some of the packaging piece. For HBM, you're going to need TSVs and other things. Sure. If I'm looking at the wafer volume inside one of these big GPU racks, by the way, it seems to be dominated to me by HBM, by DRAM. Where is Lam's exposure in the DRAM space? Yeah What does that look like? Within DRAM, as DRAM dimensions continue to shrink, the criticality of our platforms has become even greater. In recent earnings calls, last few quarters, we've talked about wins in conductor etch, things that are tied very closely to the formation of those very small features that are now on these DRAM devices. We also have had good success with our dry resist product. I want to talk about that a little bit. Yep. Dry resist is, again, DRAM is utilizing more layers of EUV, Lam's strengths are around patterning and the feature formation, that's become a lot more critical as our customers continue to try to push DRAM to its performance limits. On the deposition side, again, you mentioned in HBM through-silicon via copper plating. Those are markets and applications where we're incredibly strong. Our share of DRAM has been growing as we've continued to broaden our portfolio. Got it, I guess finally, to round it out, foundry logic. I guess both leading edge as well as trailing node. Yes. What are you doing differently there now that maybe if you look back five years or 10 years, these used to be relatively small parts of your business quite sizable now. There's been clear share gains. Yes. Adding customers. What have you been doing there and what are you seeing there? Well, Stacy, maybe if I can add a little humor here. The 3D NAND transition was huge for Lam. I wish they had called gate-all-around 3D logic. Yeah maybe Lam's participation would've been a little bit- Not quite the same. It's not quite the same, but at that transistor level, if you think about what a gate-all-around looks like, it really is starting to get into that realm of 3D processing. You now have these nanosheets. Layers Yeah, these layers that you've got to deposit and then fill, and then selectively etch the material out. Many of the things that you would do in a NAND device, clearly the processes are different, but the concept is the same. We've been. You guys need better marketing. We need better marketing. As foundry logic has transitioned into more three-dimensional device architectures, the demand for Lam products, like our selective etch, have grown pretty dramatically. Atomic Layer Deposition's grown. Of course, you're also talking about the shrink to two nanometer and below, which means conductor etch and the ability to etch the pattern that's been printed by this very precise EUV process. You've got to be able to translate that into the underlying device. I would say the demands of foundry logic today are much better suited to the portfolio of products that we've been working on. I said that was part of that shift. A lot of these products have been introduced just in the last several years, like low-k spacers using ALD. These are products that we started to develop as we shifted from this not just a memory focus, but really wanting to. Yeah to own the logic transitions as well, and I think we've done quite nicely there. Can you give us any color on some of the things you're looking at now that would be more in that 2030+ kind of timeframe, or is that not something you can talk about? Probably on a product perspective, I'd rather not do that. General concepts. Well, I think general concepts, anywhere where you see a push for, one, new performance-enhancing materials. Obviously, if you think about what we have going on right now, we're leading the push towards molybdenum within NAND and ultimately within foundry logic. When you kind of see that, I'll leave it at that. It's like we've built an incredible base of deposition and etch technologies, and I think that now it's about how to continue to expand the applications of those. Okay into forming these new devices. Got it. There's a lot of new architectures coming too. Yeah out there in that 2030s roadmap. We're going to forksheets and CFETs. CFETs and then across every device there's new things coming. What I'm happy about is we today, and we say this and you can kind of see it if you look at the full lineup of products, we have the broadest, most competitive product portfolio in the company's history. We feel like we are well positioned to address these new inflections that are coming. Got it. Let's talk about some of the more internal aspects of the company now, and let's start with maybe margins. It's funny, in this session, I always ask you why do your gross margins have to start with a four, and I don't have to ask it anymore now because they don't start with a four anymore now. They start with a five. Maybe talk a little bit about what that process looked like to get there. Yeah. Some of it's going to be mix. I don't know how much of it is pricing. Some of it is new products and new value add. How did we get there and where can things go? I know you had the Analyst Day about a little over a year ago, and you gave margin targets, I think these were 2028, that you have now hit. Yes. I think you've talked about we may be getting new targets later on in the year. I don't know if you're going to have another analyst day or you're just going to give them to us. Yeah. Probably not a new analyst day at this point. I'm assuming you're not ready to give them to us today. No. I won't give them today. In general, there's been other things, right? I think you guys have been out in front of adding supply. You certainly built out Malaysia, and I remember Malaysia was a margin headwind for-. Yeah years while that was happening, and now that's paying off benefits. It looks like you've actually added to that now as well. Yes. Maybe talk just a little bit about some of the internal things that the company's done around the execution margin supply. Anything else that comes to mind, because I think it's another reason beyond just the market lifting all boats. Yeah that Lam has clearly outperformed over the last year. I can't remember what the stock is up year-over-year, 200%, 250%? Whatever it is. I rarely look at it. Sure. No, a lot of it has been self-help. Yeah. It was with this eye that we were going to become a much bigger company. We've had that confidence. Many of the items that you talked about, first of all, I do like living in the 50s neighborhood better than the 40s neighborhood. Yeah. That's good. Some of it did come from our large manufacturing expansion. Obviously as we went through COVID and the big boom there and the difficulty to supply to the demand, I think we all sort of internalized, we don't want to let this happen again. We've made significant investments both in our manufacturing capabilities and our supply chain over the last several years. I think that's starting to really pay off. As you said, for a few years, it was a bit of a headwind as we were filling that up. We've now had no problem filling it. In fact, we, later this year, will be opening our second facility in Malaysia that'll be approximately equal size to the first one. Will it be equipped or is it just floor space? No, it will be in use in the second half of this year. Okay. The good news for us is it does not take quite as long to build an equipment manufacturing facility as to build a full-on clean room, and so we are able to respond more quickly. Your CapEx is what? 4% of revenue? Our CapEx runs 4%-5% of revenue all in, labs, manufacturing, everything. We're pretty CapEx light from that perspective. It's a combination of becoming significantly more efficient in our own operations. Plus, a lot of the applications I just talked about, where we've moved into these spaces where they're really in technology-enabling capabilities tied to sort of the customer's latest devices, gate-all-around or HBM, high layer count NAND. We've built products where we're delivering significant value. I think that it's a combination of all those things has driven the margins up. I would also point out that from a mix perspective, in general, some of what have been known in the past as higher margin portions of our business have become a little bit lower part of the mix, and we'll probably talk about China a little bit. Yeah. What it actually says is the core part of our business, non-China, you can imagine the margins from our own work have done even slightly better. Got it. I guess, are tariffs a thing now? I don't know if you had cost increases or anything. I assume you're offsetting that. All contemplated in the numbers we have reported and put out, and so I think you can see that even if there are, it's part of the margin improvement story. Yeah. Maybe that is a good segue into China, and you're right. I know for a while you were getting a boost when China was a bigger piece of the business, China's fallen off a bit, which I don't think investors are terribly sad about, frankly, as long as the rest of it's growing. Yeah Yet the margins still look really good. What are you seeing in China? Clearly, we've had a general decline in lagging edge logic. I don't think it's all China, by the way, but a lot of it is China. I get a lot of questions, clearly, about Chinese competition and local players. My general view, by the way, has been that they are real companies. They're very capable of what they do. They can't do everything. Yep. They will probably take more share than they would ordinarily deserve to take because of some of the regulatory issues, they have no choice. Yes. In general, what are you seeing there? It's been an investment controversy and a worry, but it doesn't seem like it's really slowed anything down at all for you guys or frankly for the industry as a whole. Yeah. I think that two things. One, maybe just to address the regulatory issue. We comply obviously with all regulatory requirements. We don't do any business in places where we're not allowed to. You're not shipping to YMTC or anything? No. Yeah. Therefore, local equipment suppliers have filled in for where we can't compete. Places where we can compete in China, which tends to be, as you say, the lagging edge nodes, there's still tremendous value that's delivered from Lam tools, even though those tools were likely engineered and developed by Lam more than 10 years ago. I think that that speaks to one, the quality and capability of tools Lam builds, plus the local support capabilities that our team provides. The business itself, as you say, we see China in general as kind of flattish to maybe roughly up a little bit this year. Compared to the last few years of growth, it's clearly moderated. Yeah. It was, what, 40% of your revenue or something at the peak? I can't remember. Yes. Now come down quite substantially. I think that that's, as you said, look, that's the kind of balance we want to see in the business. It's an important region for us, and we satisfy demand from the customers we can serve. With tools that we can sell. It's no longer quite the headline story. I think every earnings call. Yeah We used to get questions about China sustainability, and I think now it appears to be in this relatively sustainable run rate right now. Our story now has transitioned much more towards our growing SAM growing deposition etch intensity at leading edge driven by AI, and I think I like telling that story a lot more at this point. Yeah. It's certainly more fun to tell. Yes. Do you have any thoughts on some of the Huawei announcements that we've seen over the last couple of days? Logic folding and I don't know if you've followed it. Seen it, but no. I haven't internalized it. Okay enough to comment at this point. Okay. Got it. Maybe just one more question, just as long as we're in China and then lagging edge. China's a big piece of your lagging edge business, but it's not all of it. I guess, how much is in China, and maybe just a few comments on that business. This is the Reliant business, right? Mostly the 200 mm business. Yes It isn't all 200 mm, I'm assuming. That's right. There's quite a lot of mature node technology that's at 300 mm. In fact, quite a lot. Within our company, actually some of it, to a mature node, some of it will come out of Reliant, some of it will actually still come out of our primary business units. It's therefore a little bit harder for you to track down. Okay We do see, obviously, the reality is complex electronic systems today they require, leading edge chips and they require a whole lot of. Well, we're starting to see growth in the lagging edge now, too. Yes. We're in an industrial cyclical recovery, and clearly the AI power semis have all been on a tear. I mean, we're not seeing any signs of real recovery in trailing node yet? That's right. We are. We're seeing some growth in that area. I think more importantly, what we are also focused on is, again, this idea of engaging on where those markets are going. It's a little bit less about. We serve capacity that comes and demand that comes for the things we already have. We see an emerging opportunity in what we consider to be the specialty technology space. Again, there's a lot of new applications where there are new materials required, new deposition techniques. While none of them are quite the market size that you see from AI. They're very good businesses for us to pursue, given that quite often we either have the equipment available. It's really about application development, or it's equipment that can easily be derived from the fundamental technologies that are within our company. We have a group that focuses on those applications. These would be things like photonics maybe some materials for RF applications, special materials for power devices. Those are all, in many cases, they're materials, they're deposition or etching applications. Very well suited to what Lam can do. Okay. I would say that we intend to pursue those as well as we, again, look to broaden our portfolio across these markets. Got it. Those Reliant tools are in the services business. Yes. Maybe this is a good segue to services. I still got to ask, any plans to move it out of there? I think AMAT moved their 200 mm back into equipment. It seems like it makes more sense. Yeah, we haven't- I would advocate for it, by the way. We understand the comment and don't have any plans at this point. Let's, let's talk about services. Yes. Again, this is an installed base business. Yep. Even in a down year for equipment, it tends to grow because the installed base grows. Yes Even in a down year. I think your services revenue per tool has been going, I can't remember the CAGR, I have the number somewhere, but it's. Yeah been growing at a pretty good clip. Yes. I think services, you've talked about, is sort of like a sustained double digit. I think the only time it didn't happen is when you had some of the China issues due to the sanctions a few years ago. Just talk in general about the services business. Where is the value add there? What are the different pieces in there? Again, I went over a little bit of the growth. Yes How do you see the growth structure going forward and what does that add for you guys? Sure. Well, it's a really important part of our business. In fact, the services or CSBG, as we refer to it, is about a third of our business at this point, which, because a lot of that is based on the installed base and some of the larger components in there are things like spares, upgrades and really All that NAND upgrade revenue is actually in services. It's not in equipment. Well, I'm going to make your life a little. Some of it, not all of it's in there. Okay. It's very installed base focused, and so our installed base right now is about 100,000 chambers and growing. In operation. Yes. They're all running. Yes. What's the lifetime, typically, of these tools, by the way? A couple of decades, or more than a couple of decades. In fact, a few years ago, I had the team go look at, to find, my first job was actually installing tools at the company. I was a process engineer inside the customer fabs. Oh. I said, Go find that very first tool I installed. Oh, wow. They actually tracked it down. That was about 25 years after I'd done that job, still running. We had, by the way, my lab at MIT 20 years ago, we had an old Lam Rainbow TCP Etcher. Okay, well there you go. I didn't install that one. The reality is, the installed base, it's the gift that keeps on giving, right? Oh. It has multiple revenue streams. Of course, we service them, maintain those tools in many cases, spare parts, a lot of proprietary parts on our tools. As the installed base gets bigger, especially when you are in these high WFE years like now, installed base is rapidly expanding. That's a future revenue stream for the company that continues to grow. The more exciting thing about services is what's happening as a result of two things. One, the rapid expansion of fabs everywhere in the world, often in places where trained resources are not readily available. You combine that with the fact that the AI is demanding the highest performance, most precise-Device manufacturing we've ever seen, which means that the tools condition and the maintenance on those tools is kind of reaching the engineering or technician limit in terms of precision and repeatability. For several years now, Lam has been working on what we call Equipment Intelligence, but think about it as building AI models around the data that's coming off of your tools. We've also been working on cobots. Cobots, yeah. We call it a new product we have called Dextro. Does this help physically servicing the tools? Physically servicing the tools. Taking off flanges or I don't know. And reinstalling- Okay Cleaning the chambers and all the things that an engineer actually would hate to do anyway. The cobot can now do. What we've seen, these are now running in production, maintaining tools in several of our customers' fabs. What you see is you see a dramatic improvement in first time right after maintenance. You see an improvement in maintenance sensitive measures like edge uniformity around the wafer. In an etch tool, you install a plasma tuning ring. And we ask the engineer- Focus ring. Yeah the focus ring, and you ask the engineer to basically align that thing to like a 50 micron tolerance, right? Yeah. It's just difficult. Robot has no problem. No because the cobot can have a vision system. It can basically take measurements, install this- Is the robot mobile, or is it parked next to a single tool? What- Like is it one robot to one tool? No, it would be mobile. Okay. Yeah. From a cost perspective, remember, you don't need to do maintenance that often around the tools. Yeah. One cobot can service, depending on which type of tool, a large number of modules. Oh. That service opportunity for us, it adds significant value. It eliminates this resource constraint that has become a challenge for ramping new fabs. Frankly, just from a technical perspective, the precision and repeatability of cobot-driven maintenance is dramatically better and shows up in on-wafer performance. How does that work? Do you sell the robot, or do you guys do subscriptions or? Part of a service agreement. Okay. A subscription. Okay. We don't often use that term, but service agreement, yes. Yeah. Have you ever talked about how much of your services revenue are actually under agreements versus one-offs? We haven't really. Okay. I don't believe we've given that number. Okay. It's growing. A cobot becomes a very sticky type of service simply because now you're relying on that piece of equipment- Yeah effectively maintain your other equipment. We combine that with what we call Equipment Intelligence. This is another big focus of ours, which is we've always collected a lot of data from the tools. Now as these processes are becoming so much more complex, also AI engines are becoming so much more capable of handling disparate types of data input. That we started to focus a lot more on sensor technology. What new types of sensors? It used to be we'd measure powers, pressures, flows, all kinds of these things, now you can start to do things like video analysis. You start feeding those into the AI engine. Yeah, look at the wafer, look at the plasma condition, these sorts of. Yeah types of data streams. What it's really helping us do is start to really match tool performance across very large fleets of Lam equipment. Running in different fabs that might be located one in Asia, one in the U.S., and you want to run the same process for the same customer, and our customer would want to do that. The ability to match those fleets of tools really is becoming dependent on this Equipment Intelligence capability to do that. It has a meaningful impact on tool to tool matching. Okay and performance. Again, that is also a service that we would provide to customers. Presumably, you're able to charge for this. Yes, presumably. Yes, we are. Yeah. I mentioned I wanted to give you a chance to talk about dry resist. Yes. What is dry resist? Talk to us about it. Sure. I just think it's phenomenal. Yeah, no. Dry resist, the way Lam is disrupting some of these technologies that didn't appear to be disruptable. Yeah. There was this big controversy back in the days that EUV was going to be bad for you. Oh, yes. Doesn't seem to be the case. Turned out not to be the case. This seems to certainly push back on that. Yeah. Well, a little bit. One, it turned out that EUV wasn't bad for us because the smaller features you printed, the more critical our tools became. Yeah. That argument of multiple patterning versus a single print just made our tools actually much more critical for the capability to etch those single print features and now you have multiple patterning anyway. Right. In any case, that part of our business has been fine. We looked at dry resist, and this idea of how do you continue to shrink and push kind of the limits of lithography, and one of the limitations we saw was in the resist itself. Not only in the material, but really in the deposition technique of the resist. For, I don't know, five decades or more, basically you've spun the resist on the wafer, and the resist is delivered as a wet chemical. In most cases, wet processes over the years have gone to dry for controllability and repeatability, defect control, all sorts of reasons. I guess about six, seven years ago, Lam introduced dry resist. Probably a little ahead of its time. What dry resist does is it is a material that replaces the wet resist for the most critical lithography applications on certain devices. Took a while for us to gain customer confidence, to disrupt something that they were so comfortable using. We introduced a suite of tools we call Aether. These Aether solutions consist of an underlayer that helps with photon absorption from EUV, the resist itself, and then a dry develop process. It's a suite of tools. It turns the developing almost into an etch process rather than, like a, they currently use a liquid. Yes a photograph, right? Correct. It's like a deposition and etch type processing environments. Therefore, much more controllable, and looks like many of your other processes. It is now in ramping in production at two memory makers. It's process of record then. Two memory makers. Memory first. Yeah. These solutions. Huh. Interestingly, I think it's just the pace at which You've got to be very far ahead in the foundry logic world to get that cut in. I think that as we continue to push forward to the below two nanometer regime, as patterning continues to become more critical, we'll find adoption there as well. Memory is one that can move a little bit faster. The volume of wafers is quite high, and EUV adoption in memory is also accelerating. Got it. I think that it's on its way now. You guys gave some revenue targets a while back. I don't think you've upgraded. We haven't really changed them, at this point. We said over a five-year period, about one and a half billion dollars of revenue backend weighted, and so we're now into that five-year period. Okay. Got it. We've got about five minutes left. Should we go to the lightning round? Sure got here. Okay. Where are you seeing, or do you see the biggest bottlenecks within the AI value chain right now? I would actually rephrase that. Is semi cap itself a bottleneck? Yeah. Is it going to get worse? We've worked really hard. We talked about our operational investments. Yeah Manufacturing, supply chain, to not become the constraint. I think that we're not, but I think you see where the constraints are. As we said, clean rooms have been one we've talked about quite a lot. That problem can get resolved. A constraint that we're addressing, we just talked about the Equipment Intelligence and cobots, is how long it takes to then ramp and start up and get to mature yield in those. That will be a little bit of a time constraint. It's solvable. We're trying to address that as well. I think right now, feels like there's a bit of shortages everywhere, but most of them are being addressed. Oh. Where do you think WFE growth will be next year if clean room availability was not an issue? Oh, I'm not going to give you an unconstrained number. We've said 2027, even with the constraints in place, is going to be a year of compelling WFE growth. Oh, okay. It's safe to say there would be more if there was no constraint. I think it's safe to say there would be more if there were more clean rooms. Yeah. I won't hold you to a number, though. Yes. Let's see here. Okay. As packaging, CoWoS, HBM stacking, et cetera, becomes a gating step for AI compute, wafer fab and packaging, the boundary between wafers and wafer fabs and packaging is blurring. Is Lam's roadmap converging with the packaging equipment players like BESI? Well, what I would say is we have a very clear roadmap for advanced packaging. We play a critical role in that market. I would say that the biggest investment we're making is we're believers in this transition to larger format advanced packaging. From an efficiencies perspective, from an enabling- When you say larger format, do you mean like panels? Panels. Okay. Panels of various sizes at this point. There's not just one. As a critical supplier, one of the largest for wafer-based advanced packaging, it's a natural evolution for us. We acquired a company several years ago, that has large panel packaging positions, and we've significantly invested in that company now based out of Austria. We just opened, a couple of days ago, our center of excellence for advanced packaging for panel packaging in Austria. Okay. Effectively, we are wanting to lead through this transition. As AI devices themselves become larger and larger for the packages, that is a larger format becoming almost a necessity. Any thoughts on when that goes mainstream, panel level? We're making shipments now. The foreseeable future. It's coming. Okay. All right. We've got about two minutes left. Yep. I will ask you the same question I always ask at the end. We've got a whole room full of investors here. Some may be new to the story. We talked about it through the session. Can you sum up why should investors buy your stock? Well, great. Normally you give me 30 seconds. It's I'll give you two minutes today. I've got two minutes. Always feels a little- No, really, we've touched on a number of the key points. If I were to sort of sum it up, we are, like the rest of the industry, excited about these multiple waves of AI demand. From a demand perspective, the move from training to inference to agentic to physical fits extremely well with kind of Lam's breadth of position across advanced foundry logic, and then into, of course, HBM, but then really the excitement that coming is kind of further use cases for NAND. I think that sets us up for multi-year opportunities for growth in WFE, and specifically growth within our segment. I think the Lam-specific story drills down to the increasing role that etch and deposition play in enabling the technology devices and new architectures that are coming. The world is going 3D. I joked about 3D logic, but the reality is, as you said, CFET, 4F², ultimately 3D DRAM, these are all 3D implementations leveraging that vertical scaling dimension because two-dimensional scaling, while still occurring, is becoming so much more difficult. Etch and deposition is synonymous with 3D. We see etch and deposition intensity as its share of total WFE spending continuing to rise from now as far as we can see these roadmaps. It says Lam is in exactly the right markets, and that's where we've put all of our focus, etch and deposition leadership. Finally, I think the reality is we're gaining share. If you look at the last two years' performance, we've gained share of WFE. Partly it's that our markets are expanding faster than WFE. Partly it's that we have, I think at a faster pace than most, refreshed our product lines. We just introduced a new Akara conductor etch tool with this DirectDrive RF capability. We're sitting here with a great product portfolio in the right markets, and really excited about the future growth opportunities. Got it. Right place, right time, right stuff. There we go. There we go. Perfect. With that, I think we'll close it out. Thank you so much. Thank you.

Speaker 1: Morning. Thank you all for coming today. I'm Stacy Rasgon. I cover the U.S. semiconductor and semiconductor capital equipment sector here at Bernstein. It's my great honor to introduce our guest, the President and CEO of Lam Research, Mr. Tim Archer. Before I start, I want to mention, if you have questions you'd like to ask during the presentation, you should have a link or a QR code, I think, to the Pigeonhole form where you can submit those. I will get them up here, and we'll have time for Q&A at the end. Semi Cap. It's had a bit of a renaissance already over the last several years, but the capital equipment industry has really shifted into overdrive recently as AI has gone mainstream. With the demand profiles that we're seeing calling for at the end of the day, just simply more. Morning. morning Thank you all for coming today. thank you all for coming today I'm Stacy Rasgon. i'm stacy rasgon I cover the U.S. semiconductor and semiconductor capital equipment sector here at Bernstein. i cover the u.s semiconductor and semiconductor capital equipment sector here at bernstein It's my great honor to introduce our guest, the President and CEO of Lam Research, Mr. Tim Archer. it's my great honor to introduce our guest the president and ceo of lam research mr tim archer Before I start, I want to mention, if you have questions you'd like to ask during the presentation, you should have a link or a QR code, I think, to the Pigeonhole form where you can submit those. before i start i want to mention if you have questions you'd like to ask during the presentation you should have a link or a qr code i think to the pigeonhole form where you can submit those I will get them up here, and we'll have time for Q&A at the end. i will get them up here and we'll have time for q&a at the end Semi Cap. semi cap It's had a bit of a renaissance already over the last several years, but the capital equipment industry has really shifted into overdrive recently as AI has gone mainstream. it's had a bit of a renaissance already over the last several years but the capital equipment industry has really shifted into overdrive recently as ai has gone mainstream With the demand profiles that we're seeing calling for at the end of the day, just simply more. with the demand profiles that we're seeing calling for at the end of the day just simply more More chips, more wafers, more tools. In that world, the contributions from companies like Lam are becoming more important than ever. To tell us all about it gives me great pleasure to welcome Tim to our session today. Thank you so much. More chips, more wafers, more tools. more chips more wafers more tools In that world, the contributions from companies like Lam are becoming more important than ever. in that world the contributions from companies like lam are becoming more important than ever To tell us all about it gives me great pleasure to welcome Tim to our session today. to tell us all about it gives me great pleasure to welcome tim to our session today Thank you so much. thank you so much

Speaker 2: I have to say, I've been super excited to sit down. This is actually my first session of the conference. I'm glad it's starting with you guys. I have to say, I've been super excited to sit down. i have to say i've been super excited to sit down This is actually my first session of the conference. this is actually my first session of the conference I'm glad it's starting with you guys. i'm glad it's starting with you guys

Speaker 1: Great. Great. great Let's just jump to it. Let's talk about AI. Clearly, as I said, it's created a renaissance in WFE. It wasn't that long ago that $100 billion in WFE was just sort of this aspiration that was out there, and we've blown through that now. Right? We'll probably do. I can't remember what your number is, $145 or something? Let's just jump to it. let's just jump to it Let's talk about AI. let's talk about ai Clearly, as I said, it's created a renaissance in WFE. clearly as i said it's created a renaissance in wfe It wasn't that long ago that $100 billion in WFE was just sort of this aspiration that was out there, and we've blown through that now. it wasn't that long ago that $100 billion in wfe was just sort of this aspiration that was out there and we've blown through that now Right? right We'll probably do. we'll probably do I can't remember what your number is, $145 or something? i can't remember what your number is $145 or something

Speaker 2: $140 with a bias to the upside. $140 with a bias to the upside. $140 with a bias to the upside

Speaker 1: Yeah, bias to the upside. As strong as that is, it's a constrained number, like we were short on clean room space. Maybe just at a high level to start us off, maybe just talk about what AI has done for wafer and equipment demand. Maybe by end markets like leading-edge logic, DRAM, flash, packaging, even lagging edge. Yeah, bias to the upside. yeah bias to the upside As strong as that is, it's a constrained number, like we were short on clean room space. as strong as that is it's a constrained number like we were short on clean room space Maybe just at a high level to start us off, maybe just talk about what AI has done for wafer and equipment demand. maybe just at a high level to start us off maybe just talk about what ai has done for wafer and equipment demand Maybe by end markets like leading-edge logic, DRAM, flash, packaging, even lagging edge. maybe by end markets like leading-edge logic dram flash packaging even lagging edge

Speaker 2: Sure. Sure. sure

Speaker 1: What has it done for us? What has it done for us? what has it done for us

Speaker 2: Yeah. First of all, I agree with you on this point of this is a renaissance. It's driven by AI demand that has really touched every segment of the equipment market, the devices, end device markets. Yeah. yeah First of all, I agree with you on this point of this is a renaissance. first of all i agree with you on this point of this is a renaissance It's driven by AI demand that has really touched every segment of the equipment market, the devices, end device markets. it's driven by ai demand that has really touched every segment of the equipment market the devices end device markets

Speaker 1: In semis, by the way, you could've owned anything. It's gotten so big, it's dragging everything along with it feels like. In semis, by the way, you could've owned anything. in semis by the way you could've owned anything It's gotten so big, it's dragging everything along with it feels like. it's gotten so big it's dragging everything along with it feels like

Speaker 2: I hope some have been better than others, I mean. I hope some have been better than others, I mean. i hope some have been better than others i mean

Speaker 1: Yeah. Yeah. yeah

Speaker 2: I think that we'll talk a little bit more about the markets we're in. As you said, AI, I think what's been most amazing about it is that it has driven performance, across every device type. There used to be, there would always be a discussion of what's good enough. In AI right now, more is more. You want to have more leading-edge compute power at the foundry logic side. You need more storage. You need more memory, higher bandwidth, lower latency. That's just created changes very rapidly to the architectures of devices, how they're packaged, the materials that are used to manufacture those devices, and so for an etch and deposition focused equipment company. It's a very exciting time. I think that we'll talk a little bit more about the markets we're in. i think that we'll talk a little bit more about the markets we're in As you said, AI, I think what's been most amazing about it is that it has driven performance, across every device type. as you said ai i think what's been most amazing about it is that it has driven performance across every device type There used to be, there would always be a discussion of what's good enough. there used to be there would always be a discussion of what's good enough In AI right now, more is more. in ai right now more is more You want to have more leading-edge compute power at the foundry logic side. you want to have more leading-edge compute power at the foundry logic side You need more storage. you need more storage You need more memory, higher bandwidth, lower latency. you need more memory higher bandwidth lower latency That's just created changes very rapidly to the architectures of devices, how they're packaged, the materials that are used to manufacture those devices, and so for an etch and deposition focused equipment company. that's just created changes very rapidly to the architectures of devices how they're packaged the materials that are used to manufacture those devices and so for an etch and deposition focused equipment company It's a very exciting time. it's a very exciting time

Speaker 1: This time is different, is always sort of a dangerous kind of statement. I could make the argument that maybe it could be. How would you respond to that? Is this just a function of just demand is overwhelming? Is that what's different? Is there something different about the types of things that that demand is driving, like as it relates to you guys? How would you respond to that? This time is different, is always sort of a dangerous kind of statement. this time is different is always sort of a dangerous kind of statement I could make the argument that maybe it could be. i could make the argument that maybe it could be How would you respond to that? how would you respond to that Is this just a function of just demand is overwhelming? is this just a function of just demand is overwhelming Is that what's different? is that what's different Is there something different about the types of things that that demand is driving, like as it relates to you guys? is there something different about the types of things that that demand is driving like as it relates to you guys How would you respond to that? how would you respond to that

Speaker 2: Yeah. I think, as I was talking about, I think what is different is this almost insatiable desire for, and need for more performance. Yeah. yeah I think, as I was talking about, I think what is different is this almost insatiable desire for, and need for more performance. i think as i was talking about i think what is different is this almost insatiable desire for and need for more performance

Speaker 1: Yeah. Yeah. yeah

Speaker 2: Across all- Across all- across all-

Speaker 1: We've always wanted more performance in the space, haven't we? We've always wanted more performance in the space, haven't we? we've always wanted more performance in the space haven't we

Speaker 2: Yeah, I think that in this case, it makes the end product that much more capable in a way that I think is a little bit unique. It's always been there. It is also quite unique that it's performance across all types of devices. Including packaging. I think that the other thing that's a little bit unique and maybe different is that we have visibility to these waves of demand. We've started in training, and that drove certain performance requirements around certain types of devices. Really accelerated this push towards more advanced foundry logic to get the compute, HBM to get that capability. Now, as we move into inference, and then we move into agentic AI, and ultimately into physical AI, we see different parts of the market and different requirements. Yeah, I think that in this case, it makes the end product that much more capable in a way that I think is a little bit unique. yeah i think that in this case it makes the end product that much more capable in a way that i think is a little bit unique It's always been there. it's always been there It is also quite unique that it's performance across all types of devices. it is also quite unique that it's performance across all types of devices Including packaging. including packaging I think that the other thing that's a little bit unique and maybe different is that we have visibility to these waves of demand. i think that the other thing that's a little bit unique and maybe different is that we have visibility to these waves of demand We've started in training, and that drove certain performance requirements around certain types of devices. R eally accelerated this push towards more advanced foundry logic to get the compute, HBM to get that capability. we've started in training and that drove certain performance requirements around certain types of devices. r eally accelerated this push towards more advanced foundry logic to get the compute hbm to get that capability Now, as we move into inference, and then we move into agentic AI, and ultimately into physical AI, we see different parts of the market and different requirements. now as we move into inference and then we move into agentic ai and ultimately into physical ai we see different parts of the market and different requirements We clearly now see much stronger demand for NAND, for instance than people had anticipated. Again, as you start to make this transition from training to inference into agentic. We've seen the same thing with CPUs, and therefore, different parts of the market, different process requirements, for some of those devices. I think that's perhaps what's different is the visibility into this roadmap and march of performance requirements that really allows us to marry up our roadmaps for new equipment new materials, and really engage customers to be ready as those waves come in. We clearly now see much stronger demand for NAND, for instance than people had anticipated. we clearly now see much stronger demand for nand for instance than people had anticipated Again, as you start to make this transition from training to inference into agentic. again as you start to make this transition from training to inference into agentic We've seen the same thing with CPUs, and therefore, different parts of the market, different process requirements, for some of those devices. we've seen the same thing with cpus and therefore different parts of the market different process requirements for some of those devices I think that's perhaps what's different is the visibility into this roadmap and march of performance requirements that really allows us to marry up our roadmaps for new equipment new materials, and really engage customers to be ready as those waves come in. i think that's perhaps what's different is the visibility into this roadmap and march of performance requirements that really allows us to marry up our roadmaps for new equipment new materials and really engage customers to be ready as those waves come in

Speaker 1: How much visibility are you actually getting now, and what does that look like versus what would've been typical a few years ago? How much visibility are you actually getting now, and what does that look like versus what would've been typical a few years ago? how much visibility are you actually getting now and what does that look like versus what would've been typical a few years ago

Speaker 2: It's interesting. We look at visibility in two different ways. What's most important for us is visibility to technology roadmap. The reality is, we are already engaged and qualifying for device architectures and materials that won't ramp into manufacturing until probably the early 2030s. Having that visibility, that customer intimacy where you're really exchanging what's possible around architectures and materials, that visibility has always been strong, and I would say today, in many ways, is even stronger because of the criticality of our tools to their ability to deliver products to their customers. Capacity visibility and those needs. I think, one, we could never ask for enough, and we never get as much as we want. I would say that. It's interesting. it's interesting We look at visibility in two different ways. we look at visibility in two different ways What's most important for us is visibility to technology roadmap. what's most important for us is visibility to technology roadmap The reality is, we are already engaged and qualifying for device architectures and materials that won't ramp into manufacturing until probably the early 2030s. the reality is we are already engaged and qualifying for device architectures and materials that won't ramp into manufacturing until probably the early 2030s Having that visibility, that customer intimacy where you're really exchanging what's possible around architectures and materials, that visibility has always been strong, and I would say today, in many ways, is even stronger because of the criticality of our tools to their ability to deliver products to their customers. Capacity visibility and those needs. having that visibility that customer intimacy where you're really exchanging what's possible around architectures and materials that visibility has always been strong and i would say today in many ways is even stronger because of the criticality of our tools to their ability to deliver products to their customers. capacity visibility and those needs I think, one, we could never ask for enough, and we never get as much as we want. i think one we could never ask for enough and we never get as much as we want I would say that. i would say that

Speaker 1: When you say that, you mean your own capacity or in your supply chain or? When you say that, you mean your own capacity or in your supply chain or? when you say that you mean your own capacity or in your supply chain or

Speaker 2: No, customer demand. No, customer demand. no customer demand

Speaker 1: Okay. Okay. okay

Speaker 2: Meaning that at this point, if you look at our WFE forecast, every call, we've used this term, we're in an accelerating demand environment. What that fundamentally means is every time we come to that next checkpoint, there's more than we thought there was. I would say that the visibility is not as good as we would desire, but it's much stronger, therefore it's exactly the good kind of lack of visibility. Meaning that at this point, if you look at our WFE forecast, every call, we've used this term, we're in an accelerating demand environment. meaning that at this point if you look at our wfe forecast every call we've used this term we're in an accelerating demand environment What that fundamentally means is every time we come to that next checkpoint, there's more than we thought there was. what that fundamentally means is every time we come to that next checkpoint there's more than we thought there was I would say that the visibility is not as good as we would desire, but it's much stronger, therefore it's exactly the good kind of lack of visibility. i would say that the visibility is not as good as we would desire but it's much stronger therefore it's exactly the good kind of lack of visibility

Speaker 1: Got it. Got it. got it

Speaker 2: It's quite far into the future at this point. It's quite far into the future at this point. it's quite far into the future at this point

Speaker 1: Got it. Maybe to go back to that point, clean rooms right now, would you say, is that the primary constraint on things right now? Got it. got it Maybe to go back to that point, clean rooms right now, would you say, is that the primary constraint on things right now? maybe to go back to that point clean rooms right now would you say is that the primary constraint on things right now

Speaker 2: Yeah. We've been clearly vocal about the fact that clean rooms are constraining the ability to ship more. Obviously, there's a lot of activity in that space to try to bring new clean rooms online, but frankly, it just takes time. It's a big process to build one of these very advanced semiconductor fabrication facilities. That's why I'd say the visibility at this point. Once a fab starts construction, you kind of know where your demand is coming from maybe two years out. Yeah. yeah We've been clearly vocal about the fact that clean rooms are constraining the ability to ship more. we've been clearly vocal about the fact that clean rooms are constraining the ability to ship more Obviously, there's a lot of activity in that space to try to bring new clean rooms online, but frankly, it just takes time. obviously there's a lot of activity in that space to try to bring new clean rooms online but frankly it just takes time It's a big process to build one of these very advanced semiconductor fabrication facilities. it's a big process to build one of these very advanced semiconductor fabrication facilities That's why I'd say the visibility at this point. that's why i'd say the visibility at this point Once a fab starts construction, you kind of know where your demand is coming from maybe two years out. once a fab starts construction you kind of know where your demand is coming from maybe two years out

Speaker 1: Right. Right. right

Speaker 2: I'd say we have quite nice visibility from that point. I'd say we have quite nice visibility from that point. i'd say we have quite nice visibility from that point

Speaker 1: How many fab projects are you guys tracking right now? How many fab projects are you guys tracking right now? how many fab projects are you guys tracking right now

Speaker 2: Oh. Oh. oh

Speaker 1: I don't know if you've ever given that number. I don't know if you've ever given that number. i don't know if you've ever given that number

Speaker 2: I don't think we've given that number, but it's a lot. I don't think we've given that number, but it's a lot. i don't think we've given that number but it's a lot

Speaker 1: Hundreds, is it? Hundreds, is it? hundreds is it

Speaker 2: I don't know if there would be. In terms of new greenfields, I don't think it's quite that number. Clearly every fab is also going through continual technology upgrades and refreshes to make sure that they have the capacity needed to meet the performance demands that really is where the market is today. I don't know if there would be. i don't know if there would be In terms of new greenfields, I don't think it's quite that number. in terms of new greenfields i don't think it's quite that number Clearly every fab is also going through continual technology upgrades and r efreshes to make sure that they have the capacity needed to meet the performance demands that really is where the market is today. clearly every fab is also going through continual technology upgrades and r efreshes to make sure that they have the capacity needed to meet the performance demands that really is where the market is today

Speaker 1: Got it. Let's maybe take a look at the different end markets. Let's start with NAND. I know you guys used to be thought of as the NAND player, and you still are, not anymore, right? It used to be almost fully dependent on it-. Got it. got it Let's maybe take a look at the different end markets. let's maybe take a look at the different end markets Let's start with NAND. let's start with nand I know you guys used to be thought of as the NAND player, and you still are, not anymore, right? i know you guys used to be thought of as the nand player and you still are not anymore right It used to be almost fully dependent on it-. it used to be almost fully dependent on it-

Speaker 2: Yep Yep yep

Speaker 1: It's clearly not the case. I still remember, it seems quaint now, but it was a few years ago during the NAND trough, and it was before the stock split, but you guided something like a $5 EPS for the following quarter for a nominally NAND-focused semi cap company with no NAND in the guide, right? It was fine, right? The diversification story has done really well. At the same time, though, I don't know that we've seen a ton, especially given all the demand that there clearly is for NAND and for storage. We haven't seen a ton of greenfield builds yet. It's been primarily upgrades. It's clearly not the case. it's clearly not the case I still remember, it seems quaint now, but it was a few years ago during the NAND trough, and it was before the stock split, but you guided something like a $5 EPS for the following quarter for a nominally NAND-focused semi cap company with no NAND in the guide, right? i still remember it seems quaint now but it was a few years ago during the nand trough and it was before the stock split but you guided something like a $5 eps for the following quarter for a nominally nand-focused semi cap company with no nand in the guide right It was fine, right? it was fine right The diversification story has done really well. the diversification story has done really well At the same time, though, I don't know that we've seen a ton, especially given all the demand that there clearly is for NAND and for storage. at the same time though i don't know that we've seen a ton especially given all the demand that there clearly is for nand and for storage We haven't seen a ton of greenfield builds yet. we haven't seen a ton of greenfield builds yet It's been primarily upgrades. it's been primarily upgrades

Speaker 2: That's right. That's right. that's right

Speaker 1: My view has been the NAND guys decided they'd like to earn money for a change, which is a little new. I guess maybe talk a little bit about the differences between the NAND upgrades and expectations potentially for greenfield, because I feel like they've got to start adding greenfield at some point. I don't know how far the upgrades can carry us. My view has been the NAND guys decided they'd like to earn money for a change, which is a little new. my view has been the nand guys decided they'd like to earn money for a change which is a little new I guess maybe talk a little bit about the differences between the NAND upgrades and expectations potentially for greenfield, because I feel like they've got to start adding greenfield at some point. i guess maybe talk a little bit about the differences between the nand upgrades and expectations potentially for greenfield because i feel like they've got to start adding greenfield at some point I don't know how far the upgrades can carry us. i don't know how far the upgrades can carry us

Speaker 2: Yeah. Actually, I'd love to answer that question, and I will in just a minute, but first I have to at least clarify a little bit of this Lam as the memory company. Yeah. yeah Actually, I'd love to answer that question, and I will in just a minute, but first I have to at least clarify a little bit of this Lam as the memory company. actually i'd love to answer that question and i will in just a minute but first i have to at least clarify a little bit of this lam as the memory company

Speaker 1: Yeah Yeah yeah

Speaker 2: versus what we've become. versus what we've become. versus what we've become

Speaker 1: Yeah. Yeah. yeah

Speaker 2: I think that's an important point. I think that's an important point. i think that's an important point

Speaker 1: I think really transformed, I think. I think really transformed, I think. i think really transformed i think

Speaker 2: We still wear that memory leadership proudly. The reality is we've become so much more. If we went back five years ago, Lam, our business was about 60% memory. We still wear that memory leadership proudly. we still wear that memory leadership proudly The reality is we've become so much more. the reality is we've become so much more If we went back five years ago, Lam, our business was about 60% memory. if we went back five years ago lam our business was about 60% memory

Speaker 1: Yeah. Yeah. yeah

Speaker 2: Last year, it was 60% foundry logic. That was a deliberate strategy of ours to not give up this tremendous position we built as the enabler of a lot of these memory roadmaps. It was a strategy to diversify the company in a way that we could participate in a much bigger way in the device architecture inflections and the advanced packaging advances that were coming for foundry logic. I mentioned the visibility that's important to us is we see where these roadmaps are going five, six, seven, eight years in advance. Really about seven, eight years ago, we said, There's a huge wave coming for foundry logic. Advanced packaging is going to become a pretty big thing. Last year, it was 60% foundry logic. last year it was 60% foundry logic That was a deliberate strategy of ours to not give up this tremendous position we built as the enabler of a lot of these memory roadmaps. that was a deliberate strategy of ours to not give up this tremendous position we built as the enabler of a lot of these memory roadmaps It was a strategy to diversify the company in a way that we could participate in a much bigger way in the device architecture inflections and the advanced packaging advances that were coming for foundry logic. it was a strategy to diversify the company in a way that we could participate in a much bigger way in the device architecture inflections and the advanced packaging advances that were coming for foundry logic I mentioned the visibility that's important to us is we see where these roadmaps are going five, six, seven, eight years in advance. i mentioned the visibility that's important to us is we see where these roadmaps are going five six seven eight years in advance Really about seven, eight years ago, we said, There's a huge wave coming for foundry logic. really about seven eight years ago we said there's a huge wave coming for foundry logic Advanced packaging is going to become a pretty big thing. advanced packaging is going to become a pretty big thing We pivoted the company in terms of where we put a lot of our R&D spending, the new products we were developing. Now, it takes several years to get those products completed, it takes several years to get them qualified in customers, and now you really see that rolling through. I think you've seen Lam gaining, both expanding our SAM through this new portfolio, but also gaining share with those new products. I think every earnings call we've talked about low-k ALD, and we can get into all of this a little bit next. We pivoted the company in terms of where we put a lot of our R&D spending, the new products we were developing. we pivoted the company in terms of where we put a lot of our r&d spending the new products we were developing Now, it takes several years to get those products completed, it takes several years to get them qualified in customers, and now you really see that rolling through. now it takes several years to get those products completed it takes several years to get them qualified in customers and now you really see that rolling through I think you've seen Lam gaining, both expanding our SAM through this new portfolio, but also gaining share with those new products. i think you've seen lam gaining both expanding our sam through this new portfolio but also gaining share with those new products I think every earnings call we've talked about low-k ALD, and we can get into all of this a little bit next. i think every earnings call we've talked about low-k ald and we can get into all of this a little bit next

Speaker 1: Yeah. Yeah. yeah

Speaker 2: But it's- But it's- but it's-

Speaker 1: be careful in this forum because I can start to go down rabbit holes. be careful in this forum because I can start to go down rabbit holes. be careful in this forum because i can start to go down rabbit holes

Speaker 2: Exactly. we'll- Exactly. we'll- exactly we'll-

Speaker 1: With the audience. With the audience. with the audience

Speaker 2: come back to your NAND question. The company has reshaped, but we have not given up that NAND leadership. I think that now you're starting to see that roll through, not through greenfields yet, but last year at our investor day, February 2025, we had talked about this upgrade cycle. In the NAND business for years, the upgrades had been sort of the natural way of making use of that installed base and just scaling the number of layers. come back to your NAND question. come back to your nand question The company has reshaped, but we have not given up that NAND leadership. the company has reshaped but we have not given up that nand leadership I think that now you're starting to see that roll through, not through greenfields yet, but last year at our investor day, February 2025, we had talked about this upgrade cycle. i think that now you're starting to see that roll through not through greenfields yet but last year at our investor day february 2025 we had talked about this upgrade cycle In the NAND business for years, the upgrades had been sort of the natural way of making use of that installed base and just scaling the number of layers. in the nand business for years the upgrades had been sort of the natural way of making use of that installed base and just scaling the number of layers

Speaker 1: This is simplistically using the install base to put out wafers with more bits. This is simplistically using the install base to put out wafers with more bits. this is simplistically using the install base to put out wafers with more bits

Speaker 2: With more bits on them. With more bits on them. with more bits on them

Speaker 1: wafer. wafer. wafer

Speaker 2: Yes. What we had said last year was that it would take several years, but the customers would upgrade the tools they had in their installed fleet from the 100+ layer counts to 200+ layer count devices, and therefore get more bits, and also those bits might be higher performance, higher more capable bits. We've seen a dramatic pull in that upgrade cycle. We said several years, and now we, on our most recent call, said that entire $40 billion upgrade spending would likely be complete by the end of 2027. Yes. yes What we had said last year was that it would take several years, but the customers would upgrade the tools they had in their installed fleet from the 100+ layer counts to 200+ layer count devices, and therefore get more bits, and also those bits might be higher performance, higher more capable bits. what we had said last year was that it would take several years but the customers would upgrade the tools they had in their installed fleet from the 100+ layer counts to 200+ layer count devices and therefore get more bits and also those bits might be higher performance, higher more capable bits We've seen a dramatic pull in that upgrade cycle. we've seen a dramatic pull in that upgrade cycle We said several years, and now we, on our most recent call, said that entire $40 billion upgrade spending would likely be complete by the end of 2027. we said several years and now we on our most recent call said that entire $40 billion upgrade spending would likely be complete by the end of 2027 Now, that's. Now, that's. now that's

Speaker 1: Have you said how far along we are on the $40 billion, by the way? Have you said how far along we are on the $40 billion, by the way? have you said how far along we are on the $40 billion by the way

Speaker 2: We haven't really. We haven't really. we haven't really

Speaker 1: Okay. Okay. okay

Speaker 2: We're, again, back to this accelerating demand environment. We're, again, back to this accelerating demand environment. we're again back to this accelerating demand environment

Speaker 1: Okay. Okay. okay

Speaker 2: means most likely, it's from this point forward more back-end weighted. means most likely, it's from this point forward more back-end weighted. means most likely it's from this point forward more back-end weighted

Speaker 1: Okay. Okay. okay

Speaker 2: It's an indication of two things. One, the role of NAND within the AI hierarchy is becoming more prominent. There's stronger demand, whether that's for enterprise SSDs or use of NAND in KV cache or any of these new data storage projects that you've seen from companies. It also is the indication of your clean room shortage, which is there just weren't enough clean rooms available to satisfy all the demand of HBM and this rising demand. It's an indication of two things. One, the role of NAND within the AI hierarchy is becoming more prominent. it's an indication of two things. one the role of nand within the ai hierarchy is becoming more prominent There's stronger demand, whether that's for enterprise SSDs or use of NAND in KV cache or any of these new data storage projects that you've seen from companies. there's stronger demand whether that's for enterprise ssds or use of nand in kv cache or any of these new data storage projects that you've seen from companies It also is the indication of your clean room shortage, which is there just weren't enough clean rooms available to satisfy all the demand of HBM and this rising demand. it also is the indication of your clean room shortage which is there just weren't enough clean rooms available to satisfy all the demand of hbm and this rising demand

Speaker 1: Yeah Yeah yeah

Speaker 2: of NAND. I think that NAND has found itself first going through an upgrade cycle, but then eventually, as you've seen, as there's been shortages, effectively needs to start building greenfield. You've just started to see some of those announcements, but it takes a while to build those fabs, so it's still pretty far out there on the horizon. of NAND. of nand I think that NAND has found itself first going through an upgrade cycle, but then eventually, as you've seen, as there's been shortages, effectively needs to start building greenfield. i think that nand has found itself first going through an upgrade cycle but then eventually as you've seen as there's been shortages effectively needs to start building greenfield You've just started to see some of those announcements, but it takes a while to build those fabs, so it's still pretty far out there on the horizon. you've just started to see some of those announcements but it takes a while to build those fabs so it's still pretty far out there on the horizon

Speaker 1: Right. Right. right

Speaker 2: I think that it's probably more of a 2028 and beyond event. Which I think from our perspective is fantastic because, again, we can focus right now on a lot of these upgrades, get the installed base up to that technology, and then as a next wave of growth for the company, really see these greenfields come in and the additional shipments that come from those that demand. I think that it's probably more of a 2028 and beyond event. i think that it's probably more of a 2028 and beyond event Which I think from our perspective is fantastic because, again, we can focus right now on a lot of these upgrades, get the installed base up to that technology, and then as a next wave of growth for the company, really see these greenfields come in and the additional shipments that come from those that demand. which i think from our perspective is fantastic because again we can focus right now on a lot of these upgrades get the installed base up to that technology and then as a next wave of growth for the company really see these greenfields come in and the additional shipments that come from those that demand

Speaker 1: Got it. Maybe two follow-ons to that. One is, do you care upgrades versus greenfield? What does your exposure look like between the two? Is one better than the other? Number two, just to clarify, the upgrades is really an installed base kind of business. You guys control the vast majority of the installed base. Got it. got it Maybe two follow-ons to that. maybe two follow-ons to that One is, do you care upgrades versus greenfield? one is do you care upgrades versus greenfield What does your exposure look like between the two? what does your exposure look like between the two Is one better than the other? is one better than the other Number two, just to clarify, the upgrades is really an installed base kind of business. number two just to clarify the upgrades is really an installed base kind of business You guys control the vast majority of the installed base. you guys control the vast majority of the installed base

Speaker 2: Yes Yes yes

Speaker 1: That's out there in NAND, correct? That's out there in NAND, correct? that's out there in nand correct

Speaker 2: Yes. We do. We are clearly the leader in NAND, and we're more importantly, the clear leader in the critical technologies that are required to enable the upgrade. Meaning, if you think about the way NAND flash is manufactured, with that big memory stack and then the etching and deposition done inside of that to create the devices, Lam has a significantly high market share of all of those steps. Yes. yes We do. we do We are clearly the leader in NAND, and we're more importantly, the clear leader in the critical technologies that are required to enable the upgrade. we are clearly the leader in nand and we're more importantly the clear leader in the critical technologies that are required to enable the upgrade Meaning, if you think about the way NAND flash is manufactured, with that big memory stack and then the etching and deposition done inside of that to create the devices, Lam has a significantly high market share of all of those steps. meaning if you think about the way nand flash is manufactured with that big memory stack and then the etching and deposition done inside of that to create the devices lam has a significantly high market share of all of those steps If the customer wants to build a taller device, typically the majority of the spending is actually on Lam equipment, to build taller stacks and create those devices. Upgrades are great for us. We have a very high % of the WFE that's being spent on the upgrade. Actually, greenfield's great, too because it grows our installed base, and it makes that next upgrade cycle. EVen that much bigger. I think that what I also want people to understand is when we put out the number that said $40 billion to upgrade from the 100X level to the 200X level, that's not a one and done. If the customer wants to build a taller device, typically the majority of the spending is actually on Lam equipment, to build taller stacks and c reate those devices. if the customer wants to build a taller device typically the majority of the spending is actually on lam equipment to build taller stacks and c reate those devices Upgrades are great for us. upgrades are great for us We have a very high % of the WFE that's being spent on the upgrade. we have a very high % of the wfe that's being spent on the upgrade Actually, greenfield's great, too because it grows our installed base, and it makes that next upgrade cycle. E Ven that much bigger. actually greenfield's great too because it grows our installed base and it makes that next upgrade cycle. e ven that much bigger I think that what I also want people to understand is when we put out the number that said $40 billion to upgrade from the 100X level to the 200X level, that's not a one and done. i think that what i also want people to understand is when we put out the number that said $40 billion to upgrade from the 100x level to the 200x level that's not a one and done A couple of years down the road, 200X needs to go to 300X or 400X, and then that needs to go even bigger. You see our customers, there've been stories out and talk out about building 600, 700, 800, 900 layer NAND devices just recently. That's a roadmap that fundamentally we look to help enable in the years to come. In the upgrade, we capture a higher percentage of the customer spend. In the greenfield, we build- A couple of years down the road, 200X needs to go to 300X or 400X, and then that needs to go even bigger. a couple of years down the road 200x needs to go to 300x or 400x and then that needs to go even bigger You see our customers, there've been stories out and talk out about building 600, 700, 800, 900 layer NAND devices just recently. you see our customers there've been stories out and talk out about building 600 700 800 900 layer nand devices just recently That's a roadmap that fundamentally we look to help enable in the years to come. that's a roadmap that fundamentally we look to help enable in the years to come In the upgrade, we capture a higher percentage of the customer spend. in the upgrade we capture a higher percentage of the customer spend In the greenfield, we build- in the greenfield we build-

Speaker 1: It's for the long term. It's for the long term. it's for the long term

Speaker 2: an even bigger install base for an even brighter future. Both are good. an even bigger install base for an even brighter future. an even bigger install base for an even brighter future Both are good. both are good

Speaker 1: Got it. Let's talk about some of the other segments. You mentioned advanced packaging. Got it. got it Let's talk about some of the other segments. let's talk about some of the other segments You mentioned advanced packaging. you mentioned advanced packaging

Speaker 2: Yes Yes yes

Speaker 1: That's clearly been on a lot of radar screens as Moore's Law is slowing or stopping. Innovation is not stopping. That's clearly been on a lot of radar screens as Moore's Law is slowing or stopping. that's clearly been on a lot of radar screens as moore's law is slowing or stopping Innovation is not stopping. innovation is not stopping

Speaker 2: Yep Yep yep

Speaker 1: What it means is we have to do other things, and packaging is clearly one of those other things. What does Lam actually do in advanced packaging? Where are you actually, where's your primary contribution? How big is this business for you now? What it means is we have to do other things, and packaging is clearly one of those other things. what it means is we have to do other things and packaging is clearly one of those other things What does Lam actually do in advanced packaging? what does lam actually do in advanced packaging Where are you actually, where's your primary contribution? where are you actually where's your primary contribution How big is this business for you now? how big is this business for you now

Speaker 2: Well, maybe I'll reach all the way back into, I think, the 1990s, when the Novellus portion of our company was known as the King of Copper. Well, maybe I'll reach all the way back into, I think, the 1990s, when the Novellus portion of our company was known as the King of Copper. well maybe i'll reach all the way back into i think the 1990s when the novellus portion of our company was known as the king of copper

Speaker 1: Yeah. Yeah. yeah

Speaker 2: Today, all these years later, we're still the King of Copper. If you think about advanced packaging, a lot of the copper plating, everything that's done to create the metal interconnect is an area where we're incredibly strong. Etching, of course, whatever the device, if it's HBM or it's advanced packaging. TSV etching, silicon etch is a big. Today, all these years later, we're still the King of Copper. today all these years later we're still the king of copper If you think about advanced packaging, a lot of the copper plating, everything that's done to create the metal interconnect is an area where we're incredibly strong. if you think about advanced packaging a lot of the copper plating everything that's done to create the metal interconnect is an area where we're incredibly strong Etching, of course, whatever the device, if it's HBM or it's advanced packaging. etching of course whatever the device if it's hbm or it's advanced packaging TSV etching, silicon etch is a big. tsv etching silicon etch is a big

Speaker 1: TSV is the through-silicon vias, by the way. TSV is the through-silicon vias, by the way. tsv is the through-silicon vias by the way

Speaker 2: Through silicon Through silicon through silicon

Speaker 1: Holes that go all the way through the wafer. Holes that go all the way through the wafer. holes that go all the way through the wafer

Speaker 2: That etch, but also advanced packaging has become quite a complicated. That etch, but also advanced packaging has become quite a complicated. that etch but also advanced packaging has become quite a complicated

Speaker 1: Yes Yes yes

Speaker 2: architecture, and so there's a number of dielectric gap fills. Inter die gap fill, we call it, as well, to go in between chips. Just a number of steps. If you look at the advanced packaging and you think about where the money gets spent, a very large percentage of the dollars are directed towards etch and deposition applications. Essentially, it's a building and interconnect type of architecture, and so it's really great for our portfolio. architecture, and so there's a number of dielectric gap fills. architecture and so there's a number of dielectric gap fills Inter die gap fill, we call it, as well, to go in between chips. inter die gap fill we call it as well to go in between chips Just a number of steps. just a number of steps If you look at the advanced packaging and you think about where the money gets spent, a very large percentage of the dollars are directed towards etch and deposition applications. if you look at the advanced packaging and you think about where the money gets spent a very large percentage of the dollars are directed towards etch and deposition applications Essentially, it's a building and interconnect type of architecture, and so it's really great for our portfolio. essentially it's a building and interconnect type of architecture and so it's really great for our portfolio

Speaker 1: Got it. How big is that for you now, and how's it growing? Got it. got it How big is that for you now, and how's it growing? how big is that for you now and how's it growing

Speaker 2: Yeah, we said that this year it would grow over 50% from our prior year. Yeah, we said that this year it would grow over 50% from our prior year. yeah we said that this year it would grow over 50% from our prior year

Speaker 1: Did you give a dollar number or? Did you give a dollar number or? did you give a dollar number or

Speaker 2: We've sized it in the range of around $2 billion. We've sized it in the range of around $2 billion. we've sized it in the range of around $2 billion

Speaker 1: $2 billion. Okay. $2 billion. $2 billion Okay. okay

Speaker 2: Maybe that's probably about as close as we're going to get. Maybe that's probably about as close as we're going to get. maybe that's probably about as close as we're going to get

Speaker 1: Okay. Clearly growing and then certainly, I think, gaining in importance as the complexities of these chips continue to. Okay. okay Clearly growing and then certainly, I think, gaining in importance as the complexities of these chips continue to. clearly growing and then certainly i think gaining in importance as the complexities of these chips continue to

Speaker 2: Yeah, no, it is a fast-growing area. Again, it enables, as you said. The end customer to create something that's very difficult to create on the chip itself. To your point of when shrinks aren't the best way to get to an answer, the industry's finding ways to create an alternative path to now. Get out and do that. Yeah, no, it is a fast-growing area. yeah no it is a fast-growing area Again, it enables, as you said. again it enables as you said The end customer to create something that's very difficult to create on the chip itself. the end customer to create something that's very difficult to create on the chip itself To your point of when shrinks aren't the best way to get to an answer, the industry's finding ways to create an alternative path to now. to your point of when shrinks aren't the best way to get to an answer the industry's finding ways to create an alternative path to now Get out and do that. get out and do that

Speaker 1: Got it. Got it. When you were talking about memory before, but you were known as the memory player, but it was still mostly NAND. What do you guys do in DRAM? Clearly, there's some of the packaging piece. For HBM, you're going to need TSVs and other things. Got it. got it Got it. got it When you were talking about memory before, but you were known as the memory player, but it was still mostly NAND. when you were talking about memory before but you were known as the memory player but it was still mostly nand What do you guys do in DRAM? what do you guys do in dram Clearly, there's some of the packaging piece. clearly there's some of the packaging piece For HBM, you're going to need TSVs and other things. for hbm you're going to need tsvs and other things

Speaker 2: Sure. Sure. sure

Speaker 1: If I'm looking at the wafer volume inside one of these big GPU racks, by the way, it seems to be dominated to me by HBM, by DRAM. Where is Lam's exposure in the DRAM space? If I'm looking at the wafer volume inside one of these big GPU racks, by the way, it seems to be dominated to me by HBM, by DRAM. if i'm looking at the wafer volume inside one of these big gpu racks by the way it seems to be dominated to me by hbm by dram Where is Lam's exposure in the DRAM space? where is lam's exposure in the dram space

Speaker 2: Yeah Yeah yeah

Speaker 1: What does that look like? What does that look like? what does that look like

Speaker 2: Within DRAM, as DRAM dimensions continue to shrink, the criticality of our platforms has become even greater. In recent earnings calls, last few quarters, we've talked about wins in conductor etch, things that are tied very closely to the formation of those very small features that are now on these DRAM devices. We also have had good success with our dry resist product. Within DRAM, as DRAM dimensions continue to shrink, the criticality of our platforms has become even greater. within dram as dram dimensions continue to shrink the criticality of our platforms has become even greater In recent earnings calls, last few quarters, we've talked about wins in conductor etch, things that are tied very closely to the formation of those very small features that are now on these DRAM devices. in recent earnings calls last few quarters we've talked about wins in conductor etch things that are tied very closely to the formation of those very small features that are now on these dram devices We also have had good success with our dry resist product. we also have had good success with our dry resist product

Speaker 1: I want to talk about that a little bit. I want to talk about that a little bit. i want to talk about that a little bit

Speaker 2: Yep. Dry resist is, again, DRAM is utilizing more layers of EUV, Lam's strengths are around patterning and the feature formation, that's become a lot more critical as our customers continue to try to push DRAM to its performance limits. On the deposition side, again, you mentioned in HBM through-silicon via copper plating. Those are markets and applications where we're incredibly strong. Our share of DRAM has been growing as we've continued to broaden our portfolio. Yep. yep Dry resist is, again, DRAM is utilizing more layers of EUV, Lam's strengths are around patterning and the feature formation, that's become a lot more critical as our customers continue to try to push DRAM to its performance limits. dry resist is again dram is utilizing more layers of euv lam's strengths are around patterning and the feature formation that's become a lot more critical as our customers continue to try to push dram to its performance limits On the deposition side, again, you mentioned in HBM through-silicon via copper plating. Th ose are markets and applications where we're incredibly strong. on the deposition side again you mentioned in hbm through-silicon via copper plating. th ose are markets and applications where we're incredibly strong Our share of DRAM has been growing as we've continued to broaden our portfolio. our share of dram has been growing as we've continued to broaden our portfolio

Speaker 1: Got it, I guess finally, to round it out, foundry logic. I guess both leading edge as well as trailing node. Got it, I guess finally, to round it out, foundry logic. got it i guess finally to round it out foundry logic I guess both leading edge as well as trailing node. i guess both leading edge as well as trailing node

Speaker 2: Yes. Yes. yes

Speaker 1: What are you doing differently there now that maybe if you look back five years or 10 years, these used to be relatively small parts of your business quite sizable now. There's been clear share gains. What are you doing differently there now that maybe if you look back five years or 10 years, these used to be relatively small parts of your business quite sizable now. what are you doing differently there now that maybe if you look back five years or 10 years these used to be relatively small parts of your business quite sizable now There's been clear share gains. there's been clear share gains

Speaker 2: Yes. Yes. yes

Speaker 1: Adding customers. What have you been doing there and what are you seeing there? Adding customers. adding customers What have you been doing there and what are you seeing there? what have you been doing there and what are you seeing there

Speaker 2: Well, Stacy, maybe if I can add a little humor here. The 3D NAND transition was huge for Lam. I wish they had called gate-all-around 3D logic. Well, Stacy, maybe if I can add a little humor here. well stacy maybe if i can add a little humor here The 3D NAND transition was huge for Lam. the 3d nand transition was huge for lam I wish they had called gate-all-around 3D logic. i wish they had called gate-all-around 3d logic

Speaker 1: Yeah Yeah yeah

Speaker 2: maybe Lam's participation would've been a little bit- maybe Lam's participation would've been a little bit- maybe lam's participation would've been a little bit-

Speaker 1: Not quite the same. Not quite the same. not quite the same

Speaker 2: It's not quite the same, but at that transistor level, if you think about what a gate-all-around looks like, it really is starting to get into that realm of 3D processing. You now have these nanosheets. It's not quite the same, but at that transistor level, if you think about what a gate-all-around looks like, it really is starting to get into that realm of 3D processing. it's not quite the same but at that transistor level if you think about what a gate-all-around looks like it really is starting to get into that realm of 3d processing You now have these nanosheets. you now have these nanosheets

Speaker 1: Layers Layers layers

Speaker 2: Yeah, these layers that you've got to deposit and then fill, and then selectively etch the material out. Many of the things that you would do in a NAND device, clearly the processes are different, but the concept is the same. We've been. Yeah, these layers that you've got to deposit and then fill, and then selectively etch the material out. yeah these layers that you've got to deposit and then fill and then selectively etch the material out Many of the things that you would do in a NAND device, clearly the processes are different, but the concept is the same. many of the things that you would do in a nand device clearly the processes are different but the concept is the same We've been. we've been

Speaker 1: You guys need better marketing. You guys need better marketing. you guys need better marketing

Speaker 2: We need better marketing. As foundry logic has transitioned into more three-dimensional device architectures, the demand for Lam products, like our selective etch, have grown pretty dramatically. Atomic Layer Deposition's grown. Of course, you're also talking about the shrink to two nanometer and below, which means conductor etch and the ability to etch the pattern that's been printed by this very precise EUV process. You've got to be able to translate that into the underlying device. I would say the demands of foundry logic today are much better suited to the portfolio of products that we've been working on. I said that was part of that shift. A lot of these products have been introduced just in the last several years, like low-k spacers using ALD. These are products that we started to develop as we shifted from this not just a memory focus, but really wanting to. We need better marketing. we need better marketing As foundry logic has transitioned into more three-dimensional device architectures, the demand for Lam products, like our selective etch, have grown pretty dramatically. as foundry logic has transitioned into more three-dimensional device architectures the demand for lam products like our selective etch have grown pretty dramatically Atomic Layer Deposition's grown. atomic layer deposition's grown Of course, you're also talking about the shrink to two nanometer and below, which means conductor etch and the ability to etch the pattern that's been printed by this very precise EUV process. of course you're also talking about the shrink to two nanometer and below which means conductor etch and the ability to etch the pattern that's been printed by this very precise euv process You've got to be able to translate that into the underlying device. you've got to be able to translate that into the underlying device I would say the demands of foundry logic today are much better suited to the portfolio of products that we've been working on. i would say the demands of foundry logic today are much better suited to the portfolio of products that we've been working on I said that was part of that shift. i said that was part of that shift A lot of these products have been introduced just in the last several years, like low-k spacers using ALD. a lot of these products have been introduced just in the last several years like low-k spacers using ald These are products that we started to develop as we shifted from this not just a memory focus, but really wanting to. these are products that we started to develop as we shifted from this not just a memory focus but really wanting to

Speaker 1: Yeah Yeah yeah

Speaker 2: to own the logic transitions as well, and I think we've done quite nicely there. to own the logic transitions as well, and I think we've done quite nicely there. to own the logic transitions as well and i think we've done quite nicely there

Speaker 1: Can you give us any color on some of the things you're looking at now that would be more in that 2030+ kind of timeframe, or is that not something you can talk about? Can you give us any color on some of the things you're looking at now that would be more in that 2030 + kind of timeframe, or is that not something you can talk about? can you give us any color on some of the things you're looking at now that would be more in that 2030 + kind of timeframe or is that not something you can talk about

Speaker 2: Probably on a product perspective, I'd rather not do that. Probably on a product perspective, I'd rather not do that. probably on a product perspective i'd rather not do that

Speaker 1: General concepts. General concepts. general concepts

Speaker 2: Well, I think general concepts, anywhere where you see a push for, one, new performance-enhancing materials. Obviously, if you think about what we have going on right now, we're leading the push towards molybdenum within NAND and ultimately within foundry logic. When you kind of see that, I'll leave it at that. It's like we've built an incredible base of deposition and etch technologies, and I think that now it's about how to continue to expand the applications of those. Well, I think general concepts, anywhere where you see a push for, one, new performance-enhancing materials. well i think general concepts anywhere where you see a push for one new performance-enhancing materials Obviously, if you think about what we have going on right now, we're leading the push towards molybdenum within NAND and ultimately within foundry logic. obviously if you think about what we have going on right now we're leading the push towards molybdenum within nand and ultimately within foundry logic When you kind of see that, I'll leave it at that. when you kind of see that i'll leave it at that It's like we've built an incredible base of deposition and etch technologies, and I think that now it's about how to continue to expand the applications of those. it's like we've built an incredible base of deposition and etch technologies and i think that now it's about how to continue to expand the applications of those

Speaker 1: Okay Okay okay

Speaker 2: into forming these new devices. into forming these new devices. into forming these new devices

Speaker 1: Got it. Got it. got it

Speaker 2: There's a lot of new architectures coming too. There's a lot of new architectures coming too. there's a lot of new architectures coming too

Speaker 1: Yeah Yeah yeah

Speaker 2: out there in that 2030s roadmap. out there in that 2030s roadmap. out there in that 2030s roadmap

Speaker 1: We're going to forksheets and CFETs. We're going to forksheets and CFETs. we're going to forksheets and cfets

Speaker 2: CFETs and then across every device there's new things coming. What I'm happy about is we today, and we say this and you can kind of see it if you look at the full lineup of products, we have the broadest, most competitive product portfolio in the company's history. We feel like we are well positioned to address these new inflections that are coming. CFETs and then across every device there's new things coming. cfets and then across every device there's new things coming What I'm happy about is we today, and we say this and you can kind of see it if you look at the full lineup of products, we have the broadest, most competitive product portfolio in the company's history. what i'm happy about is we today and we say this and you can kind of see it if you look at the full lineup of products we have the broadest most competitive product portfolio in the company's history We feel like we are well positioned to address these new inflections that are coming. we feel like we are well positioned to address these new inflections that are coming

Speaker 1: Got it. Let's talk about some of the more internal aspects of the company now, and let's start with maybe margins. It's funny, in this session, I always ask you why do your gross margins have to start with a four, and I don't have to ask it anymore now because they don't start with a four anymore now. They start with a five. Maybe talk a little bit about what that process looked like to get there. Got it. got it Let's talk about some of the more internal aspects of the company now, and let's start with maybe margins. let's talk about some of the more internal aspects of the company now and let's start with maybe margins It's funny, in this session, I always ask you why do your gross margins have to start with a four, and I don't have to ask it anymore now because they don't start with a four anymore now. it's funny in this session i always ask you why do your gross margins have to start with a four and i don't have to ask it anymore now because they don't start with a four anymore now They start with a five. they start with a five Maybe talk a little bit about what that process looked like to get there. maybe talk a little bit about what that process looked like to get there

Speaker 2: Yeah. Yeah. yeah

Speaker 1: Some of it's going to be mix. I don't know how much of it is pricing. Some of it is new products and new value add. How did we get there and where can things go? I know you had the Analyst Day about a little over a year ago, and you gave margin targets, I think these were 2028, that you have now hit. Some of it's going to be mix. some of it's going to be mix I don't know how much of it is pricing. i don't know how much of it is pricing Some of it is new products and new value add. some of it is new products and new value add How did we get there and where can things go? how did we get there and where can things go I know you had the Analyst Day about a little over a year ago, and you gave margin targets, I think these were 2028, that you have now hit. i know you had the analyst day about a little over a year ago and you gave margin targets i think these were 2028 that you have now hit

Speaker 2: Yes. Yes. yes

Speaker 1: I think you've talked about we may be getting new targets later on in the year. I don't know if you're going to have another analyst day or you're just going to give them to us. I think you've talked about we may be getting new targets later on in the year. i think you've talked about we may be getting new targets later on in the year I don't know if you're going to have another analyst day or you're just going to give them to us. i don't know if you're going to have another analyst day or you're just going to give them to us

Speaker 2: Yeah. Probably not a new analyst day at this point. Yeah. yeah Probably not a new analyst day at this point. probably not a new analyst day at this point

Speaker 1: I'm assuming you're not ready to give them to us today. I'm assuming you're not ready to give them to us today. i'm assuming you're not ready to give them to us today

Speaker 2: No. I won't give them today. No. no I won't give them today. i won't give them today

Speaker 1: In general, there's been other things, right? I think you guys have been out in front of adding supply. You certainly built out Malaysia, and I remember Malaysia was a margin headwind for-. In general, there's been other things, right? in general there's been other things right I think you guys have been out in front of adding supply. i think you guys have been out in front of adding supply You certainly built out Malaysia, and I remember Malaysia was a margin headwind for-. you certainly built out malaysia and i remember malaysia was a margin headwind for-

Speaker 2: Yeah Yeah yeah

Speaker 1: years while that was happening, and now that's paying off benefits. It looks like you've actually added to that now as well. years while that was happening, and now that's paying off benefits. years while that was happening and now that's paying off benefits It looks like you've actually added to that now as well. it looks like you've actually added to that now as well

Speaker 2: Yes. Yes. yes

Speaker 1: Maybe talk just a little bit about some of the internal things that the company's done around the execution margin supply. Anything else that comes to mind, because I think it's another reason beyond just the market lifting all boats. Maybe talk just a little bit about some of the internal things that the company's done around the execution margin supply. maybe talk just a little bit about some of the internal things that the company's done around the execution margin supply Anything else that comes to mind, because I think it's another reason beyond just the market lifting all boats. anything else that comes to mind because i think it's another reason beyond just the market lifting all boats

Speaker 2: Yeah Yeah yeah

Speaker 1: that Lam has clearly outperformed over the last year. I can't remember what the stock is up year-over-year, 200%, 250%? Whatever it is. that Lam has clearly outperformed over the last year. that lam has clearly outperformed over the last year I can't remember what the stock is up year-over-year, 200%, 250%? i can't remember what the stock is up year-over-year 200% 250% Whatever it is. whatever it is

Speaker 2: I rarely look at it. Sure. No, a lot of it has been self-help. I rarely look at it. i rarely look at it Sure. sure No, a lot of it has been self-help. no a lot of it has been self-help

Speaker 1: Yeah. Yeah. yeah

Speaker 2: It was with this eye that we were going to become a much bigger company. We've had that confidence. Many of the items that you talked about, first of all, I do like living in the 50s neighborhood better than the 40s neighborhood. It was with this eye that we were going to become a much bigger company. it was with this eye that we were going to become a much bigger company We've had that confidence. we've had that confidence Many of the items that you talked about, first of all, I do like living in the 50s neighborhood better than the 40s neighborhood. many of the items that you talked about first of all i do like living in the 50s neighborhood better than the 40s neighborhood

Speaker 1: Yeah. Yeah. yeah

Speaker 2: That's good. Some of it did come from our large manufacturing expansion. Obviously as we went through COVID and the big boom there and the difficulty to supply to the demand, I think we all sort of internalized, we don't want to let this happen again. We've made significant investments both in our manufacturing capabilities and our supply chain over the last several years. I think that's starting to really pay off. As you said, for a few years, it was a bit of a headwind as we were filling that up. We've now had no problem filling it. In fact, we, later this year, will be opening our second facility in Malaysia that'll be approximately equal size to the first one. That's good. that's good Some of it did come from our large manufacturing expansion. some of it did come from our large manufacturing expansion Obviously as we went through COVID and the big boom there and the difficulty to supply to the demand, I think we all sort of internalized, we don't want to let this happen again. obviously as we went through covid and the big boom there and the difficulty to supply to the demand i think we all sort of internalized we don't want to let this happen again We've made significant investments both in our manufacturing capabilities and our supply chain over the last several years. we've made significant investments both in our manufacturing capabilities and our supply chain over the last several years I think that's starting to really pay off. i think that's starting to really pay off As you said, for a few years, it was a bit of a headwind as we were filling that up. as you said for a few years it was a bit of a headwind as we were filling that up We've now had no problem filling it. we've now had no problem filling it In fact, we, later this year, will be opening our second facility in Malaysia that'll be approximately equal size to the first one. in fact we later this year will be opening our second facility in malaysia that'll be approximately equal size to the first one

Speaker 1: Will it be equipped or is it just floor space? Will it be equipped or is it just floor space? will it be equipped or is it just floor space

Speaker 2: No, it will be in use in the second half of this year. No, it will be in use in the second half of this year. no it will be in use in the second half of this year

Speaker 1: Okay. Okay. okay

Speaker 2: The good news for us is it does not take quite as long to build an equipment manufacturing facility as to build a full-on clean room, and so we are able to respond more quickly. The good news for us is it does not take quite as long to build an equipment manufacturing facility as to build a full-on clean room, and so we are able to respond more quickly. the good news for us is it does not take quite as long to build an equipment manufacturing facility as to build a full-on clean room and so we are able to respond more quickly

Speaker 1: Your CapEx is what? 4% of revenue? Your CapEx is what? 4% of revenue? your capex is what 4% of revenue

Speaker 2: Our CapEx runs 4%-5% of revenue all in, labs, manufacturing, everything. We're pretty CapEx light from that perspective. It's a combination of becoming significantly more efficient in our own operations. Plus, a lot of the applications I just talked about, where we've moved into these spaces where they're really in technology-enabling capabilities tied to sort of the customer's latest devices, gate-all-around or HBM, high layer count NAND. We've built products where we're delivering significant value. I think that it's a combination of all those things has driven the margins up. Our CapEx runs 4%-5% of revenue all in, labs, manufacturing, everything. our capex runs 4%-5% of revenue all in labs manufacturing everything We're pretty CapEx light from that perspective. we're pretty capex light from that perspective It's a combination of becoming significantly more efficient in our own operations. it's a combination of becoming significantly more efficient in our own operations Plus, a lot of the applications I just talked about, where we've moved into these spaces where they're really in technology-enabling capabilities tied to sort of the customer's latest devices, gate-all-around or HBM, high layer count NAND. plus a lot of the applications i just talked about where we've moved into these spaces where they're really in technology-enabling capabilities tied to sort of the customer's latest devices gate-all-around or hbm high layer count nand We've built products where we're delivering significant value. we've built products where we're delivering significant value I think that it's a combination of all those things has driven the margins up. i think that it's a combination of all those things has driven the margins up I would also point out that from a mix perspective, in general, some of what have been known in the past as higher margin portions of our business have become a little bit lower part of the mix, and we'll probably talk about China a little bit. I would also point out that from a mix perspective, in general, some of what have been known in the past as higher margin portions of our business have become a little bit lower part of the mix, and we'll probably talk about China a little bit. i would also point out that from a mix perspective in general some of what have been known in the past as higher margin portions of our business have become a little bit lower part of the mix and we'll probably talk about china a little bit

Speaker 1: Yeah. Yeah. yeah

Speaker 2: What it actually says is the core part of our business, non-China, you can imagine the margins from our own work have done even slightly better. What it actually says is the core part of our business, non-China, you can imagine the margins from our own work have done even slightly better. what it actually says is the core part of our business non-china you can imagine the margins from our own work have done even slightly better

Speaker 1: Got it. I guess, are tariffs a thing now? I don't know if you had cost increases or anything. I assume you're offsetting that. Got it. got it I guess, are tariffs a thing now? i guess are tariffs a thing now I don't know if you had cost increases or anything. i don't know if you had cost increases or anything I assume you're offsetting that. i assume you're offsetting that

Speaker 2: All contemplated in the numbers we have reported and put out, and so I think you can see that even if there are, it's part of the margin improvement story. All contemplated in the numbers we have reported and put out, and so I think you can see that even if there are, it's part of the margin improvement story. all contemplated in the numbers we have reported and put out and so i think you can see that even if there are it's part of the margin improvement story

Speaker 1: Yeah. Maybe that is a good segue into China, and you're right. I know for a while you were getting a boost when China was a bigger piece of the business, China's fallen off a bit, which I don't think investors are terribly sad about, frankly, as long as the rest of it's growing. Yeah. yeah Maybe that is a good segue into China, and you're right. maybe that is a good segue into china and you're right I know for a while you were getting a boost when China was a bigger piece of the business, China's fallen off a bit, which I don't think investors are terribly sad about, frankly, as long as the rest of it's growing. i know for a while you were getting a boost when china was a bigger piece of the business china's fallen off a bit which i don't think investors are terribly sad about frankly as long as the rest of it's growing

Speaker 2: Yeah Yeah yeah

Speaker 1: Yet the margins still look really good. What are you seeing in China? Clearly, we've had a general decline in lagging edge logic. I don't think it's all China, by the way, but a lot of it is China. I get a lot of questions, clearly, about Chinese competition and local players. My general view, by the way, has been that they are real companies. They're very capable of what they do. They can't do everything. Yet the margins still look really good. yet the margins still look really good What are you seeing in China? what are you seeing in china Clearly, we've had a general decline in lagging edge logic. clearly we've had a general decline in lagging edge logic I don't think it's all China, by the way, but a lot of it is China. i don't think it's all china by the way but a lot of it is china I get a lot of questions, clearly, about Chinese competition and local players. i get a lot of questions clearly about chinese competition and local players My general view, by the way, has been that they are real companies. my general view by the way has been that they are real companies They're very capable of what they do. they're very capable of what they do They can't do everything. they can't do everything

Speaker 2: Yep. Yep. yep

Speaker 1: They will probably take more share than they would ordinarily deserve to take because of some of the regulatory issues, they have no choice. They will probably take more share than they would ordinarily deserve to take because of some of the regulatory issues, they have no choice. they will probably take more share than they would ordinarily deserve to take because of some of the regulatory issues they have no choice

Speaker 2: Yes. Yes. yes

Speaker 1: In general, what are you seeing there? It's been an investment controversy and a worry, but it doesn't seem like it's really slowed anything down at all for you guys or frankly for the industry as a whole. In general, what are you seeing there? in general what are you seeing there It's been an investment controversy and a worry, but it doesn't seem like it's really slowed anything down at all for you guys or frankly for the industry as a whole. it's been an investment controversy and a worry but it doesn't seem like it's really slowed anything down at all for you guys or frankly for the industry as a whole

Speaker 2: Yeah. I think that two things. One, maybe just to address the regulatory issue. We comply obviously with all regulatory requirements. We don't do any business in places where we're not allowed to. Yeah. yeah I think that two things. i think that two things One, maybe just to address the regulatory issue. one maybe just to address the regulatory issue We comply obviously with all regulatory requirements. we comply obviously with all regulatory requirements We don't do any business in places where we're not allowed to. we don't do any business in places where we're not allowed to

Speaker 1: You're not shipping to YMTC or anything? You're not shipping to YMTC or anything? you're not shipping to ymtc or anything

Speaker 2: No. No. no

Speaker 1: Yeah. Yeah. yeah

Speaker 2: Therefore, local equipment suppliers have filled in for where we can't compete. Places where we can compete in China, which tends to be, as you say, the lagging edge nodes, there's still tremendous value that's delivered from Lam tools, even though those tools were likely engineered and developed by Lam more than 10 years ago. Therefore, local equipment suppliers have filled in for where we can't compete. therefore local equipment suppliers have filled in for where we can't compete Places where we can compete in China, which tends to be, as you say, the lagging edge nodes, there's still tremendous value that's delivered from Lam tools, even though those tools were likely engineered and developed by Lam more than 10 years ago. places where we can compete in china which tends to be as you say the lagging edge nodes there's still tremendous value that's delivered from lam tools even though those tools were likely engineered and developed by lam more than 10 years ago I think that that speaks to one, the quality and capability of tools Lam builds, plus the local support capabilities that our team provides. The business itself, as you say, we see China in general as kind of flattish to maybe roughly up a little bit this year. Compared to the last few years of growth, it's clearly moderated. I think that that speaks to one, the quality and capability of tools Lam builds, plus the local support capabilities that our team provides. i think that that speaks to one the quality and capability of tools lam builds plus the local support capabilities that our team provides The business itself, as you say, we see China in general as kind of flattish to maybe roughly up a little bit this year. the business itself as you say we see china in general as kind of flattish to maybe roughly up a little bit this year Compared to the last few years of growth, it's clearly moderated. compared to the last few years of growth it's clearly moderated

Speaker 1: Yeah. It was, what, 40% of your revenue or something at the peak? I can't remember. Yeah. yeah It was, what, 40% of your revenue or something at the peak? it was what 40% of your revenue or something at the peak I can't remember. i can't remember

Speaker 2: Yes. Now come down quite substantially. I think that that's, as you said, look, that's the kind of balance we want to see in the business. It's an important region for us, and we satisfy demand from the customers we can serve. With tools that we can sell. It's no longer quite the headline story. I think every earnings call. Yes. yes Now come down quite substantially. now come down quite substantially I think that that's, as you said, look, that's the kind of balance we want to see in the business. i think that that's as you said look that's the kind of balance we want to see in the business It's an important region for us, and we satisfy demand from the customers we can serve. it's an important region for us and we satisfy demand from the customers we can serve With tools that we can sell. with tools that we can sell It's no longer quite the headline story. it's no longer quite the headline story I think every earnings call. i think every earnings call

Speaker 1: Yeah Yeah yeah

Speaker 2: We used to get questions about China sustainability, and I think now it appears to be in this relatively sustainable run rate right now. Our story now has transitioned much more towards our growing SAM growing deposition etch intensity at leading edge driven by AI, and I think I like telling that story a lot more at this point. We used to get questions about China sustainability, and I think now it appears to be in this relatively sustainable run rate right now. we used to get questions about china sustainability and i think now it appears to be in this relatively sustainable run rate right now Our story now has transitioned much more towards our growing SAM growing deposition etch intensity at leading edge driven by AI, and I think I like telling that story a lot more at this point. our story now has transitioned much more towards our growing sam growing deposition etch intensity at leading edge driven by ai and i think i like telling that story a lot more at this point

Speaker 1: Yeah. It's certainly more fun to tell. Yeah. yeah It's certainly more fun to tell. it's certainly more fun to tell

Speaker 2: Yes. Yes. yes

Speaker 1: Do you have any thoughts on some of the Huawei announcements that we've seen over the last couple of days? Logic folding and I don't know if you've followed it. Do you have any thoughts on some of the Huawei announcements that we've seen over the last couple of days? do you have any thoughts on some of the huawei announcements that we've seen over the last couple of days Logic folding and I don't know if you've followed it. logic folding and i don't know if you've followed it

Speaker 2: Seen it, but no. I haven't internalized it. Seen it, but no. seen it but no I haven't internalized it. i haven't internalized it

Speaker 1: Okay Okay okay

Speaker 2: enough to comment at this point. enough to comment at this point. enough to comment at this point

Speaker 1: Okay. Got it. Maybe just one more question, just as long as we're in China and then lagging edge. China's a big piece of your lagging edge business, but it's not all of it. I guess, how much is in China, and maybe just a few comments on that business. This is the Reliant business, right? Mostly the 200 mm business. Okay. okay Got it. got it Maybe just one more question, just as long as we're in China and then lagging edge. maybe just one more question just as long as we're in china and then lagging edge China's a big piece of your lagging edge business, but it's not all of it. china's a big piece of your lagging edge business but it's not all of it I guess, how much is in China, and maybe just a few comments on that business. i guess how much is in china and maybe just a few comments on that business This is the Reliant business, right? this is the reliant business right Mostly the 200 mm business. mostly the 200 mm business

Speaker 2: Yes Yes yes

Speaker 1: It isn't all 200 mm, I'm assuming. It isn't all 200 mm, I'm assuming. it isn't all 200 mm i'm assuming

Speaker 2: That's right. There's quite a lot of mature node technology that's at 300 mm. In fact, quite a lot. Within our company, actually some of it, to a mature node, some of it will come out of Reliant, some of it will actually still come out of our primary business units. It's therefore a little bit harder for you to track down. That's right. that's right There's quite a lot of mature node technology that's at 300 mm. there's quite a lot of mature node technology that's at 300 mm In fact, quite a lot. in fact quite a lot Within our company, actually some of it, to a mature node, some of it will come out of Reliant, some of it will actually still come out of our primary business units. within our company actually some of it to a mature node some of it will come out of reliant some of it will actually still come out of our primary business units It's therefore a little bit harder for you to track down. it's therefore a little bit harder for you to track down

Speaker 1: Okay Okay okay

Speaker 2: We do see, obviously, the reality is complex electronic systems today they require, leading edge chips and they require a whole lot of. We do see, obviously, the reality is complex electronic systems today they require, leading edge chips and they require a whole lot of. we do see obviously the reality is complex electronic systems today they require leading edge chips and they require a whole lot of

Speaker 1: Well, we're starting to see growth in the lagging edge now, too. Well, we're starting to see growth in the lagging edge now, too. well we're starting to see growth in the lagging edge now too

Speaker 2: Yes. Yes. yes

Speaker 1: We're in an industrial cyclical recovery, and clearly the AI power semis have all been on a tear. I mean, we're not seeing any signs of real recovery in trailing node yet? We're in an industrial cyclical recovery, and clearly the AI power semis have all been on a tear. we're in an industrial cyclical recovery and clearly the ai power semis have all been on a tear I mean, we're not seeing any signs of real recovery in trailing node yet? i mean we're not seeing any signs of real recovery in trailing node yet

Speaker 2: That's right. That's right. that's right We are. We're seeing some growth in that area. I think more importantly, what we are also focused on is, again, this idea of engaging on where those markets are going. It's a little bit less about. We serve capacity that comes and demand that comes for the things we already have. We see an emerging opportunity in what we consider to be the specialty technology space. Again, there's a lot of new applications where there are new materials required, new deposition techniques. While none of them are quite the market size that you see from AI. We are. we are We're seeing some growth in that area. we're seeing some growth in that area I think more importantly, what we are also focused on is, again, this idea of engaging on where those markets are going. i think more importantly what we are also focused on is again this idea of engaging on where those markets are going It's a little bit less about. it's a little bit less about We serve capacity that comes and demand that comes for the things we already have. we serve capacity that comes and demand that comes for the things we already have We see an emerging opportunity in what we consider to be the specialty technology space. we see an emerging opportunity in what we consider to be the specialty technology space Again, there's a lot of new applications where there are new materials required, new deposition techniques. again there's a lot of new applications where there are new materials required new deposition techniques While none of them are quite the market size that you see from AI. while none of them are quite the market size that you see from ai They're very good businesses for us to pursue, given that quite often we either have the equipment available. It's really about application development, or it's equipment that can easily be derived from the fundamental technologies that are within our company. We have a group that focuses on those applications. These would be things like photonics maybe some materials for RF applications, special materials for power devices. Those are all, in many cases, they're materials, they're deposition or etching applications. Very well suited to what Lam can do. They're very good businesses for us to pursue, given that quite often we either have the equipment available. It 's really about application development, or it's equipment that can easily be derived from the fundamental technologies that are within our company. they're very good businesses for us to pursue given that quite often we either have the equipment available. it 's really about application development or it's equipment that can easily be derived from the fundamental technologies that are within our company We have a group that focuses on those applications. we have a group that focuses on those applications These would be things like photonics maybe some materials for RF applications, special materials for power devices. these would be things like photonics maybe some materials for rf applications special materials for power devices Those are all, in many cases, they're materials, they're deposition or etching applications. those are all in many cases they're materials they're deposition or etching applications Very well suited to what Lam can do. very well suited to what lam can do

Speaker 1: Okay. Okay. okay

Speaker 2: I would say that we intend to pursue those as well as we, again, look to broaden our portfolio across these markets. I would say that we intend to pursue those as well as we, again, look to broaden our portfolio across these markets. i would say that we intend to pursue those as well as we again look to broaden our portfolio across these markets

Speaker 1: Got it. Those Reliant tools are in the services business. Got it. got it Those Reliant tools are in the services business. those reliant tools are in the services business

Speaker 2: Yes. Yes. yes

Speaker 1: Maybe this is a good segue to services. I still got to ask, any plans to move it out of there? I think AMAT moved their 200 mm back into equipment. It seems like it makes more sense. Maybe this is a good segue to services. maybe this is a good segue to services I still got to ask, any plans to move it out of there? i still got to ask any plans to move it out of there I think AMAT moved their 200 mm back into equipment. i think amat moved their 200 mm back into equipment It seems like it makes more sense. it seems like it makes more sense

Speaker 2: Yeah, we haven't- Yeah, we haven't- yeah we haven't-

Speaker 1: I would advocate for it, by the way. I would advocate for it, by the way. i would advocate for it by the way

Speaker 2: We understand the comment and don't have any plans at this point. We understand the comment and don't have any plans at this point. we understand the comment and don't have any plans at this point

Speaker 1: Let's, let's talk about services. Let's, let's talk about services. let's let's talk about services

Speaker 2: Yes. Yes. yes

Speaker 1: Again, this is an installed base business. Again, this is an installed base business. again this is an installed base business

Speaker 2: Yep. Yep. yep

Speaker 1: Even in a down year for equipment, it tends to grow because the installed base grows. Even in a down year for equipment, it tends to grow because the installed base grows. even in a down year for equipment it tends to grow because the installed base grows

Speaker 2: Yes Even in a down year. Yes Even in a down year. yes even in a down year

Speaker 1: I think your services revenue per tool has been going, I can't remember the CAGR, I have the number somewhere, but it's. I think your services revenue per tool has been going, I can't remember the CAGR, I have the number somewhere, but it's. i think your services revenue per tool has been going i can't remember the cagr i have the number somewhere but it's

Speaker 2: Yeah Yeah yeah

Speaker 1: been growing at a pretty good clip. been growing at a pretty good clip. been growing at a pretty good clip

Speaker 2: Yes. Yes. yes

Speaker 1: I think services, you've talked about, is sort of like a sustained double digit. I think the only time it didn't happen is when you had some of the China issues due to the sanctions a few years ago. Just talk in general about the services business. Where is the value add there? What are the different pieces in there? Again, I went over a little bit of the growth. I think services, you've talked about, is sort of like a sustained double digit. i think services you've talked about is sort of like a sustained double digit I think the only time it didn't happen is when you had some of the China issues due to the sanctions a few years ago. i think the only time it didn't happen is when you had some of the china issues due to the sanctions a few years ago Just talk in general about the services business. just talk in general about the services business Where is the value add there? where is the value add there What are the different pieces in there? what are the different pieces in there Again, I went over a little bit of the growth. again i went over a little bit of the growth

Speaker 2: Yes Yes yes

Speaker 1: How do you see the growth structure going forward and what does that add for you guys? How do you see the growth structure going forward and what does that add for you guys? how do you see the growth structure going forward and what does that add for you guys

Speaker 2: Sure. Well, it's a really important part of our business. In fact, the services or CSBG, as we refer to it, is about a third of our business at this point, which, because a lot of that is based on the installed base and some of the larger components in there are things like spares, upgrades and really Sure. sure Well, it's a really important part of our business. well it's a really important part of our business In fact, the services or CSBG, as we refer to it, is about a third of our business at this point, which, because a lot of that is based on the installed base and some of the larger components in there are things like spares, upgrades and really in fact the services or csbg as we refer to it is about a third of our business at this point which because a lot of that is based on the installed base and some of the larger components in there are things like spares upgrades and really

Speaker 1: All that NAND upgrade revenue is actually in services. It's not in equipment. All that NAND upgrade revenue is actually in services. all that nand upgrade revenue is actually in services It's not in equipment. it's not in equipment

Speaker 2: Well, I'm going to make your life a little. Some of it, not all of it's in there. Well, I'm going to make your life a little. well i'm going to make your life a little Some of it, not all of it's in there. some of it not all of it's in there

Speaker 1: Okay. Okay. okay

Speaker 2: It's very installed base focused, and so our installed base right now is about 100,000 chambers and growing. It's very installed base focused, and so our installed base right now is about 100,000 chambers and growing. it's very installed base focused and so our installed base right now is about 100,000 chambers and growing

Speaker 1: In operation. In operation. in operation

Speaker 2: Yes. Yes. yes

Speaker 1: They're all running. They're all running. they're all running

Speaker 2: Yes. Yes. yes

Speaker 1: What's the lifetime, typically, of these tools, by the way? What's the lifetime, typically, of these tools, by the way? what's the lifetime typically of these tools by the way

Speaker 2: A couple of decades, or more than a couple of decades. In fact, a few years ago, I had the team go look at, to find, my first job was actually installing tools at the company. I was a process engineer inside the customer fabs. A couple of decades, or more than a couple of decades. a couple of decades or more than a couple of decades In fact, a few years ago, I had the team go look at, to find, my first job was actually installing tools at the company. in fact a few years ago i had the team go look at to find my first job was actually installing tools at the company I was a process engineer inside the customer fabs. i was a process engineer inside the customer fabs

Speaker 1: Oh. Oh. oh

Speaker 2: I said, Go find that very first tool I installed. I said, Go find that very first tool I installed. i said go find that very first tool i installed

Speaker 1: Oh, wow. Oh, wow. oh wow

Speaker 2: They actually tracked it down. That was about 25 years after I'd done that job, still running. They actually tracked it down. they actually tracked it down That was about 25 years after I'd done that job, still running. that was about 25 years after i'd done that job still running

Speaker 1: We had, by the way, my lab at MIT 20 years ago, we had an old Lam Rainbow TCP Etcher. We had, by the way, my lab at MIT 20 years ago, we had an old Lam Rainbow TCP Etcher. we had by the way my lab at mit 20 years ago we had an old lam rainbow tcp etcher

Speaker 2: Okay, well there you go. I didn't install that one. The reality is, the installed base, it's the gift that keeps on giving, right? Okay, well there you go. okay well there you go I didn't install that one. i didn't install that one The reality is, the installed base, it's the gift that keeps on giving, right? the reality is the installed base it's the gift that keeps on giving right

Speaker 1: Oh. Oh. oh

Speaker 2: It has multiple revenue streams. Of course, we service them, maintain those tools in many cases, spare parts, a lot of proprietary parts on our tools. As the installed base gets bigger, especially when you are in these high WFE years like now, installed base is rapidly expanding. That's a future revenue stream for the company that continues to grow. The more exciting thing about services is what's happening as a result of two things. One, the rapid expansion of fabs everywhere in the world, often in places where trained resources are not readily available. You combine that with the fact that the AI is demanding the highest performance, most precise-Device manufacturing we've ever seen, which means that the tools condition and the maintenance on those tools is kind of reaching the engineering or technician limit in terms of precision and repeatability. It has multiple revenue streams. it has multiple revenue streams Of course, we service them, maintain those tools in many cases, spare parts, a lot of proprietary parts on our tools. of course we service them maintain those tools in many cases spare parts a lot of proprietary parts on our tools As the installed base gets bigger, especially when you are in these high WFE years like now, installed base is rapidly expanding. as the installed base gets bigger especially when you are in these high wfe years like now installed base is rapidly expanding That's a future revenue stream for the company that continues to grow. that's a future revenue stream for the company that continues to grow The more exciting thing about services is what's happening as a result of two things. the more exciting thing about services is what's happening as a result of two things One, the rapid expansion of fabs everywhere in the world, often in places where trained resources are not readily available. one the rapid expansion of fabs everywhere in the world often in places where trained resources are not readily available You combine that with the fact that the AI is demanding the highest performance, most precise-Device manufacturing we've ever seen, which means that the tools condition and the maintenance on those tools is kind of reaching the engineering or technician limit in terms of precision and repeatability. you combine that with the fact that the ai is demanding the highest performance most precise-device manufacturing we've ever seen which means that the tools condition and the maintenance on those tools is kind of reaching the engineering or technician limit in terms of precision and repeatability For several years now, Lam has been working on what we call Equipment Intelligence, but think about it as building AI models around the data that's coming off of your tools. We've also been working on cobots. For several years now, Lam has been working on what we call Equipment Intelligence, but think about it as building AI models around the data that's coming off of your tools. for several years now lam has been working on what we call equipment intelligence but think about it as building ai models around the data that's coming off of your tools We've also been working on cobots. we've also been working on cobots

Speaker 1: Cobots, yeah. Cobots, yeah. cobots yeah

Speaker 2: We call it a new product we have called Dextro. We call it a new product we have called Dextro. we call it a new product we have called dextro

Speaker 1: Does this help physically servicing the tools? Does this help physically servicing the tools? does this help physically servicing the tools

Speaker 2: Physically servicing the tools. Physically servicing the tools. physically servicing the tools

Speaker 1: Taking off flanges or I don't know. Taking off flanges or I don't know. taking off flanges or i don't know

Speaker 2: And reinstalling- And reinstalling- and reinstalling-

Speaker 1: Okay Okay okay

Speaker 2: Cleaning the chambers and all the things that an engineer actually would hate to do anyway. The cobot can now do. What we've seen, these are now running in production, maintaining tools in several of our customers' fabs. What you see is you see a dramatic improvement in first time right after maintenance. You see an improvement in maintenance sensitive measures like edge uniformity around the wafer. In an etch tool, you install a plasma tuning ring. And we ask the engineer- Cleaning the chambers and all the things that an engineer actually would hate to do anyway. cleaning the chambers and all the things that an engineer actually would hate to do anyway The cobot can now do. the cobot can now do What we've seen, these are now running in production, maintaining tools in several of our customers' fabs. what we've seen these are now running in production maintaining tools in several of our customers' fabs What you see is you see a dramatic improvement in first time right after maintenance. what you see is you see a dramatic improvement in first time right after maintenance You see an improvement in maintenance sensitive measures like edge uniformity around the wafer. you see an improvement in maintenance sensitive measures like edge uniformity around the wafer In an etch tool, you install a plasma tuning ring. in an etch tool you install a plasma tuning ring And we ask the engineer- and we ask the engineer-

Speaker 1: Focus ring. Yeah Focus ring. focus ring Yeah yeah

Speaker 2: the focus ring, and you ask the engineer to basically align that thing to like a 50 micron tolerance, right? the focus ring, and you ask the engineer to basically align that thing to like a 50 micron tolerance, right? the focus ring and you ask the engineer to basically align that thing to like a 50 micron tolerance right

Speaker 1: Yeah. Yeah. yeah

Speaker 2: It's just difficult. Robot has no problem. It's just difficult. it's just difficult Robot has no problem. robot has no problem

Speaker 1: No No no

Speaker 2: because the cobot can have a vision system. It can basically take measurements, install this- because the cobot can have a vision system. because the cobot can have a vision system It can basically take measurements, install this- it can basically take measurements install this-

Speaker 1: Is the robot mobile, or is it parked next to a single tool? Is the robot mobile, or is it parked next to a single tool? is the robot mobile or is it parked next to a single tool

Speaker 2: What- What- what-

Speaker 1: Like is it one robot to one tool? Like is it one robot to one tool? like is it one robot to one tool

Speaker 2: No, it would be mobile. No, it would be mobile. no it would be mobile

Speaker 1: Okay. Okay. okay

Speaker 2: Yeah. From a cost perspective, remember, you don't need to do maintenance that often around the tools. Yeah. yeah From a cost perspective, remember, you don't need to do maintenance that often around the tools. from a cost perspective remember you don't need to do maintenance that often around the tools

Speaker 1: Yeah. Yeah. yeah

Speaker 2: One cobot can service, depending on which type of tool, a large number of modules. One cobot can service, depending on which type of tool, a large number of modules. one cobot can service depending on which type of tool a large number of modules

Speaker 1: Oh. Oh. oh

Speaker 2: That service opportunity for us, it adds significant value. It eliminates this resource constraint that has become a challenge for ramping new fabs. Frankly, just from a technical perspective, the precision and repeatability of cobot-driven maintenance is dramatically better and shows up in on-wafer performance. That service opportunity for us, it adds significant value. that service opportunity for us it adds significant value It eliminates this resource constraint that has become a challenge for ramping new fabs. it eliminates this resource constraint that has become a challenge for ramping new fabs Frankly, just from a technical perspective, the precision and repeatability of cobot-driven maintenance is dramatically better and shows up in on-wafer performance. frankly just from a technical perspective the precision and repeatability of cobot-driven maintenance is dramatically better and shows up in on-wafer performance

Speaker 1: How does that work? Do you sell the robot, or do you guys do subscriptions or? How does that work? how does that work Do you sell the robot, or do you guys do subscriptions or? do you sell the robot or do you guys do subscriptions or

Speaker 2: Part of a service agreement. Part of a service agreement. part of a service agreement

Speaker 1: Okay. Okay. okay

Speaker 2: A subscription. A subscription. a subscription

Speaker 1: Okay. Okay. okay

Speaker 2: We don't often use that term, but service agreement, yes. We don't often use that term, but service agreement, yes. we don't often use that term but service agreement yes

Speaker 1: Yeah. Have you ever talked about how much of your services revenue are actually under agreements versus one-offs? Yeah. yeah Have you ever talked about how much of your services revenue are actually under agreements versus one-offs? have you ever talked about how much of your services revenue are actually under agreements versus one-offs

Speaker 2: We haven't really. We haven't really. we haven't really

Speaker 1: Okay. Okay. okay

Speaker 2: I don't believe we've given that number. I don't believe we've given that number. i don't believe we've given that number

Speaker 1: Okay. Okay. okay

Speaker 2: It's growing. It's growing. it's growing A cobot becomes a very sticky type of service simply because now you're relying on that piece of equipment- A cobot becomes a very sticky type of service simply because now you're relying on that piece of equipment- a cobot becomes a very sticky type of service simply because now you're relying on that piece of equipment-

Speaker 1: Yeah Yeah yeah

Speaker 2: effectively maintain your other equipment. We combine that with what we call Equipment Intelligence. This is another big focus of ours, which is we've always collected a lot of data from the tools. Now as these processes are becoming so much more complex, also AI engines are becoming so much more capable of handling disparate types of data input. That we started to focus a lot more on sensor technology. What new types of sensors? It used to be we'd measure powers, pressures, flows, all kinds of these things, now you can start to do things like video analysis. You start feeding those into the AI engine. effectively maintain your other equipment. effectively maintain your other equipment We combine that with what we call Equipment Intelligence. we combine that with what we call equipment intelligence This is another big focus of ours, which is we've always collected a lot of data from the tools. this is another big focus of ours which is we've always collected a lot of data from the tools Now as these processes are becoming so much more complex, also AI engines are becoming so much more capable of handling disparate types of data input. now as these processes are becoming so much more complex also ai engines are becoming so much more capable of handling disparate types of data input That we started to focus a lot more on sensor technology. that we started to focus a lot more on sensor technology What new types of sensors? what new types of sensors It used to be we'd measure powers, pressures, flows, all kinds of these things, now you can start to do things like video analysis. it used to be we'd measure powers pressures flows all kinds of these things now you can start to do things like video analysis You start feeding those into the AI engine. you start feeding those into the ai engine Yeah, look at the wafer, look at the plasma condition, these sorts of. Yeah, look at the wafer, look at the plasma condition, these sorts of. yeah look at the wafer look at the plasma condition these sorts of

Speaker 1: Yeah Yeah yeah

Speaker 2: types of data streams. What it's really helping us do is start to really match tool performance across very large fleets of Lam equipment. Running in different fabs that might be located one in Asia, one in the U.S., and you want to run the same process for the same customer, and our customer would want to do that. The ability to match those fleets of tools really is becoming dependent on this Equipment Intelligence capability to do that. It has a meaningful impact on tool to tool matching. types of data streams. types of data streams What it's really helping us do is start to really match tool performance across very large fleets of Lam equipment. what it's really helping us do is start to really match tool performance across very large fleets of lam equipment Running in different fabs that might be located one in Asia, one in the U.S., and you want to run the same process for the same customer, and our customer would want to do that. running in different fabs that might be located one in asia one in the u.s and you want to run the same process for the same customer and our customer would want to do that The ability to match those fleets of tools really is becoming dependent on this Equipment Intelligence capability to do that. the ability to match those fleets of tools really is becoming dependent on this equipment intelligence capability to do that It has a meaningful impact on tool to tool matching. it has a meaningful impact on tool to tool matching

Speaker 1: Okay Okay okay

Speaker 2: and performance. Again, that is also a service that we would provide to customers. and performance. and performance Again, that is also a service that we would provide to customers. again that is also a service that we would provide to customers

Speaker 1: Presumably, you're able to charge for this. Presumably, you're able to charge for this. presumably you're able to charge for this

Speaker 2: Yes, presumably. Yes, we are. Yes, presumably. yes presumably Yes, we are. yes we are

Speaker 1: Yeah. I mentioned I wanted to give you a chance to talk about dry resist. Yeah. yeah I mentioned I wanted to give you a chance to talk about dry resist. i mentioned i wanted to give you a chance to talk about dry resist

Speaker 2: Yes. Yes. yes

Speaker 1: What is dry resist? Talk to us about it. What is dry resist? what is dry resist Talk to us about it. talk to us about it

Speaker 2: Sure. Sure. sure

Speaker 1: I just think it's phenomenal. I just think it's phenomenal. i just think it's phenomenal

Speaker 2: Yeah, no. Dry resist, the way Lam is disrupting some of these technologies that didn't appear to be disruptable. Yeah, no. yeah no Dry resist, the way Lam is disrupting some of these technologies that didn't appear to be disruptable. dry resist the way lam is disrupting some of these technologies that didn't appear to be disruptable

Speaker 1: Yeah. There was this big controversy back in the days that EUV was going to be bad for you. Yeah. yeah There was this big controversy back in the days that EUV was going to be bad for you. there was this big controversy back in the days that euv was going to be bad for you

Speaker 2: Oh, yes. Oh, yes. oh yes

Speaker 1: Doesn't seem to be the case. Doesn't seem to be the case. doesn't seem to be the case

Speaker 2: Turned out not to be the case. Turned out not to be the case. turned out not to be the case

Speaker 1: This seems to certainly push back on that. This seems to certainly push back on that. this seems to certainly push back on that

Speaker 2: Yeah. Well, a little bit. One, it turned out that EUV wasn't bad for us because the smaller features you printed, the more critical our tools became. Yeah. yeah Well, a little bit. well a little bit One, it turned out that EUV wasn't bad for us because the smaller features you printed, the more critical our tools became. one it turned out that euv wasn't bad for us because the smaller features you printed the more critical our tools became

Speaker 1: Yeah. Yeah. yeah

Speaker 2: That argument of multiple patterning versus a single print just made our tools actually much more critical for the capability to etch those single print features and now you have multiple patterning anyway. That argument of multiple patterning versus a single print just made our tools actually much more critical for the capability to etch those single print features and now you have multiple patterning anyway. that argument of multiple patterning versus a single print just made our tools actually much more critical for the capability to etch those single print features and now you have multiple patterning anyway

Speaker 1: Right. Right. right

Speaker 2: In any case, that part of our business has been fine. We looked at dry resist, and this idea of how do you continue to shrink and push kind of the limits of lithography, and one of the limitations we saw was in the resist itself. Not only in the material, but really in the deposition technique of the resist. For, I don't know, five decades or more, basically you've spun the resist on the wafer, and the resist is delivered as a wet chemical. In most cases, wet processes over the years have gone to dry for controllability and repeatability, defect control, all sorts of reasons. I guess about six, seven years ago, Lam introduced dry resist. In any case, that part of our business has been fine. in any case that part of our business has been fine We looked at dry resist, and this idea of how do you continue to shrink and push kind of the limits of lithography, and one of the limitations we saw was in the resist itself. we looked at dry resist and this idea of how do you continue to shrink and push kind of the limits of lithography and one of the limitations we saw was in the resist itself Not only in the material, but really in the deposition technique of the resist. not only in the material but really in the deposition technique of the resist For, I don't know, five decades or more, basically you've spun the resist on the wafer, and the resist is delivered as a wet chemical. for i don't know five decades or more basically you've spun the resist on the wafer and the resist is delivered as a wet chemical In most cases, wet processes over the years have gone to dry for controllability and repeatability, defect control, all sorts of reasons. in most cases wet processes over the years have gone to dry for controllability and repeatability defect control all sorts of reasons I guess about six, seven years ago, Lam introduced dry resist. i guess about six seven years ago lam introduced dry resist Probably a little ahead of its time. What dry resist does is it is a material that replaces the wet resist for the most critical lithography applications on certain devices. Took a while for us to gain customer confidence, to disrupt something that they were so comfortable using. We introduced a suite of tools we call Aether. These Aether solutions consist of an underlayer that helps with photon absorption from EUV, the resist itself, and then a dry develop process. It's a suite of tools. Probably a little ahead of its time. probably a little ahead of its time What dry resist does is it is a material that replaces the wet resist for the most critical lithography applications on certain devices. what dry resist does is it is a material that replaces the wet resist for the most critical lithography applications on certain devices Took a while for us to gain customer confidence, to disrupt something that they were so comfortable using. took a while for us to gain customer confidence to disrupt something that they were so comfortable using We introduced a suite of tools we call Aether. we introduced a suite of tools we call aether These Aether solutions consist of an underlayer that helps with photon absorption from EUV, the resist itself, and then a dry develop process. these aether solutions consist of an underlayer that helps with photon absorption from euv the resist itself and then a dry develop process It's a suite of tools. it's a suite of tools

Speaker 1: It turns the developing almost into an etch process rather than, like a, they currently use a liquid. It turns the developing almost into an etch process rather than, like a, they currently use a liquid. it turns the developing almost into an etch process rather than like a they currently use a liquid

Speaker 2: Yes Yes yes

Speaker 1: a photograph, right? a photograph, right? a photograph right

Speaker 2: Correct. It's like a deposition and etch type processing environments. Therefore, much more controllable, and looks like many of your other processes. It is now in ramping in production at two memory makers. Correct. correct It's like a deposition and etch type processing environments. it's like a deposition and etch type processing environments Therefore, much more controllable, and looks like many of your other processes. therefore much more controllable and looks like many of your other processes It is now in ramping in production at two memory makers. it is now in ramping in production at two memory makers

Speaker 1: It's process of record then. It's process of record then. it's process of record then

Speaker 2: Two memory makers. Two memory makers. two memory makers

Speaker 1: Memory first. Yeah. Memory first. memory first Yeah. yeah

Speaker 2: These solutions. These solutions. these solutions

Speaker 1: Huh. Huh. huh

Speaker 2: Interestingly, I think it's just the pace at which You've got to be very far ahead in the foundry logic world to get that cut in. I think that as we continue to push forward to the below two nanometer regime, as patterning continues to become more critical, we'll find adoption there as well. Memory is one that can move a little bit faster. The volume of wafers is quite high, and EUV adoption in memory is also accelerating. Interestingly, I think it's just the pace at which You've got to be very far ahead in the foundry logic world to get that cut in. interestingly i think it's just the pace at which you've got to be very far ahead in the foundry logic world to get that cut in I think that as we continue to push forward to the below two nanometer regime, as patterning continues to become more critical, we'll find adoption there as well. i think that as we continue to push forward to the below two nanometer regime as patterning continues to become more critical we'll find adoption there as well Memory is one that can move a little bit faster. memory is one that can move a little bit faster The volume of wafers is quite high, and EUV adoption in memory is also accelerating. the volume of wafers is quite high and euv adoption in memory is also accelerating

Speaker 1: Got it. Got it. got it

Speaker 2: I think that it's on its way now. I think that it's on its way now. i think that it's on its way now

Speaker 1: You guys gave some revenue targets a while back. I don't think you've upgraded. You guys gave some revenue targets a while back. you guys gave some revenue targets a while back I don't think you've upgraded. i don't think you've upgraded

Speaker 2: We haven't really changed them, at this point. We said over a five-year period, about one and a half billion dollars of revenue backend weighted, and so we're now into that five-year period. We haven't really changed them, at this point. we haven't really changed them at this point We said over a five-year period, about one and a half billion dollars of revenue backend weighted, and so we're now into that five-year period. we said over a five-year period about one and a half billion dollars of revenue backend weighted and so we're now into that five-year period

Speaker 1: Okay. Got it. We've got about five minutes left. Should we go to the lightning round? Okay. okay Got it. got it We've got about five minutes left. we've got about five minutes left Should we go to the lightning round? should we go to the lightning round

Speaker 2: Sure got here. Sure got here. sure got here

Speaker 1: Okay. Where are you seeing, or do you see the biggest bottlenecks within the AI value chain right now? I would actually rephrase that. Is semi cap itself a bottleneck? Okay. okay Where are you seeing, or do you see the biggest bottlenecks within the AI value chain right now? where are you seeing or do you see the biggest bottlenecks within the ai value chain right now I would actually rephrase that. i would actually rephrase that Is semi cap itself a bottleneck? is semi cap itself a bottleneck

Speaker 2: Yeah. Yeah. yeah

Speaker 1: Is it going to get worse? Is it going to get worse? is it going to get worse

Speaker 2: We've worked really hard. We talked about our operational investments. We've worked really hard. we've worked really hard We talked about our operational investments. we talked about our operational investments

Speaker 1: Yeah Yeah yeah

Speaker 2: Manufacturing, supply chain, to not become the constraint. I think that we're not, but I think you see where the constraints are. As we said, clean rooms have been one we've talked about quite a lot. That problem can get resolved. A constraint that we're addressing, we just talked about the Equipment Intelligence and cobots, is how long it takes to then ramp and start up and get to mature yield in those. That will be a little bit of a time constraint. It's solvable. We're trying to address that as well. I think right now, feels like there's a bit of shortages everywhere, but most of them are being addressed. Manufacturing, supply chain, to not become the constraint. manufacturing supply chain to not become the constraint I think that we're not, but I think you see where the constraints are. i think that we're not but i think you see where the constraints are As we said, clean rooms have been one we've talked about quite a lot. as we said clean rooms have been one we've talked about quite a lot That problem can get resolved. that problem can get resolved A constraint that we're addressing, we just talked about the Equipment Intelligence and cobots, is how long it takes to then ramp and start up and get to mature yield in those. a constraint that we're addressing we just talked about the equipment intelligence and cobots is how long it takes to then ramp and start up and get to mature yield in those That will be a little bit of a time constraint. that will be a little bit of a time constraint It's solvable. it's solvable We're trying to address that as well. we're trying to address that as well I think right now, feels like there's a bit of shortages everywhere, but most of them are being addressed. i think right now feels like there's a bit of shortages everywhere but most of them are being addressed

Speaker 1: Oh. Where do you think WFE growth will be next year if clean room availability was not an issue? Oh. oh Where do you think WFE growth will be next year if clean room availability was not an issue? where do you think wfe growth will be next year if clean room availability was not an issue

Speaker 2: Oh, I'm not going to give you an unconstrained number. We've said 2027, even with the constraints in place, is going to be a year of compelling WFE growth. Oh, I'm not going to give you an unconstrained number. oh i'm not going to give you an unconstrained number We've said 2027, even with the constraints in place, is going to be a year of compelling WFE growth. we've said 2027 even with the constraints in place is going to be a year of compelling wfe growth

Speaker 1: Oh, okay. It's safe to say there would be more if there was no constraint. Oh, okay. oh okay It's safe to say there would be more if there was no constraint. it's safe to say there would be more if there was no constraint

Speaker 2: I think it's safe to say there would be more if there were more clean rooms. I think it's safe to say there would be more if there were more clean rooms. i think it's safe to say there would be more if there were more clean rooms

Speaker 1: Yeah. I won't hold you to a number, though. Yeah. yeah I won't hold you to a number, though. i won't hold you to a number though

Speaker 2: Yes. Yes. yes

Speaker 1: Let's see here. Okay. As packaging, CoWoS, HBM stacking, et cetera, becomes a gating step for AI compute, wafer fab and packaging, the boundary between wafers and wafer fabs and packaging is blurring. Is Lam's roadmap converging with the packaging equipment players like BESI? Let's see here. let's see here Okay. okay As packaging, CoWoS, HBM stacking, et cetera, becomes a gating step for AI compute, wafer fab and packaging, the boundary between wafers and wafer fabs and packaging is blurring. as packaging cowos hbm stacking et cetera becomes a gating step for ai compute wafer fab and packaging the boundary between wafers and wafer fabs and packaging is blurring Is Lam's roadmap converging with the packaging equipment players like BESI? is lam's roadmap converging with the packaging equipment players like besi

Speaker 2: Well, what I would say is we have a very clear roadmap for advanced packaging. We play a critical role in that market. I would say that the biggest investment we're making is we're believers in this transition to larger format advanced packaging. From an efficiencies perspective, from an enabling- Well, what I would say is we have a very clear roadmap for advanced packaging. well what i would say is we have a very clear roadmap for advanced packaging We play a critical role in that market. we play a critical role in that market I would say that the biggest investment we're making is we're believers in this transition to larger format advanced packaging. i would say that the biggest investment we're making is we're believers in this transition to larger format advanced packaging From an efficiencies perspective, from an enabling- from an efficiencies perspective from an enabling-

Speaker 1: When you say larger format, do you mean like panels? When you say larger format, do you mean like panels? when you say larger format do you mean like panels

Speaker 2: Panels. Panels. panels

Speaker 1: Okay. Okay. okay

Speaker 2: Panels of various sizes at this point. There's not just one. As a critical supplier, one of the largest for wafer-based advanced packaging, it's a natural evolution for us. We acquired a company several years ago, that has large panel packaging positions, and we've significantly invested in that company now based out of Austria. We just opened, a couple of days ago, our center of excellence for advanced packaging for panel packaging in Austria. Panels of various sizes at this point. panels of various sizes at this point There's not just one. there's not just one As a critical supplier, one of the largest for wafer-based advanced packaging, it's a natural evolution for us. as a critical supplier one of the largest for wafer-based advanced packaging it's a natural evolution for us We acquired a company several years ago, that has large panel packaging positions, and we've significantly invested in that company now based out of Austria. we acquired a company several years ago that has large panel packaging positions and we've significantly invested in that company now based out of austria We just opened, a couple of days ago, our center of excellence for advanced packaging for panel packaging in Austria. we just opened a couple of days ago our center of excellence for advanced packaging for panel packaging in austria

Speaker 1: Okay. Okay. okay

Speaker 2: Effectively, we are wanting to lead through this transition. As AI devices themselves become larger and larger for the packages, that is a larger format becoming almost a necessity. Effectively, we are wanting to lead through this transition. effectively we are wanting to lead through this transition As AI devices themselves become larger and larger for the packages, that is a larger format becoming almost a necessity. as ai devices themselves become larger and larger for the packages that is a larger format becoming almost a necessity

Speaker 1: Any thoughts on when that goes mainstream, panel level? Any thoughts on when that goes mainstream, panel level? any thoughts on when that goes mainstream panel level

Speaker 2: We're making shipments now. The foreseeable future. It's coming. We're making shipments now. we're making shipments now The foreseeable future. the foreseeable future It's coming. it's coming

Speaker 1: Okay. All right. We've got about two minutes left. Okay. okay All right. all right We've got about two minutes left. we've got about two minutes left

Speaker 2: Yep. Yep. yep

Speaker 1: I will ask you the same question I always ask at the end. We've got a whole room full of investors here. Some may be new to the story. We talked about it through the session. Can you sum up why should investors buy your stock? I will ask you the same question I always ask at the end. i will ask you the same question i always ask at the end We've got a whole room full of investors here. we've got a whole room full of investors here Some may be new to the story. some may be new to the story We talked about it through the session. we talked about it through the session Can you sum up why should investors buy your stock? can you sum up why should investors buy your stock

Speaker 2: Well, great. Normally you give me 30 seconds. It's Well, great. well great Normally you give me 30 seconds. normally you give me 30 seconds It's it's

Speaker 1: I'll give you two minutes today. I'll give you two minutes today. i'll give you two minutes today

Speaker 2: I've got two minutes. I've got two minutes. i've got two minutes

Speaker 1: Always feels a little- Always feels a little- always feels a little-

Speaker 2: No, really, we've touched on a number of the key points. If I were to sort of sum it up, we are, like the rest of the industry, excited about these multiple waves of AI demand. From a demand perspective, the move from training to inference to agentic to physical fits extremely well with kind of Lam's breadth of position across advanced foundry logic, and then into, of course, HBM, but then really the excitement that coming is kind of further use cases for NAND. I think that sets us up for multi-year opportunities for growth in WFE, and specifically growth within our segment. I think the Lam-specific story drills down to the increasing role that etch and deposition play in enabling the technology devices and new architectures that are coming. The world is going 3D. No, really, we've touched on a number of the key points. no really we've touched on a number of the key points If I were to sort of sum it up, we are, like the rest of the industry, excited about these multiple waves of AI demand. if i were to sort of sum it up we are like the rest of the industry excited about these multiple waves of ai demand From a demand perspective, the move from training to inference to agentic to physical fits extremely well with kind of Lam's breadth of position across advanced foundry logic, and then into, of course, HBM, but then really the excitement that coming is kind of further use cases for NAND. from a demand perspective the move from training to inference to agentic to physical fits extremely well with kind of lam's breadth of position across advanced foundry logic and then into of course hbm but then really the excitement that coming is kind of further use cases for nand I think that sets us up for multi-year opportunities for growth in WFE, and specifically growth within our segment. i think that sets us up for multi-year opportunities for growth in wfe and specifically growth within our segment I think the Lam-specific story drills down to the increasing role that etch and deposition play in enabling the technology devices and new architectures that are coming. i think the lam-specific story drills down to the increasing role that etch and deposition play in enabling the technology devices and new architectures that are coming The world is going 3D. the world is going 3d I joked about 3D logic, but the reality is, as you said, CFET, 4F², ultimately 3D DRAM, these are all 3D implementations leveraging that vertical scaling dimension because two-dimensional scaling, while still occurring, is becoming so much more difficult. Etch and deposition is synonymous with 3D. We see etch and deposition intensity as its share of total WFE spending continuing to rise from now as far as we can see these roadmaps. It says Lam is in exactly the right markets, and that's where we've put all of our focus, etch and deposition leadership. Finally, I think the reality is we're gaining share. If you look at the last two years' performance, we've gained share of WFE. Partly it's that our markets are expanding faster than WFE. Partly it's that we have, I think at a faster pace than most, refreshed our product lines. I joked about 3D logic, but the reality is, as you said, CFET, 4F², ultimately 3D DRAM, these are all 3D implementations leveraging that vertical scaling dimension because two-dimensional scaling, while still occurring, is becoming so much more difficult. i joked about 3d logic but the reality is as you said cfet 4f² ultimately 3d dram these are all 3d implementations leveraging that vertical scaling dimension because two-dimensional scaling while still occurring is becoming so much more difficult Etch and deposition is synonymous with 3D. etch and deposition is synonymous with 3d We see etch and deposition intensity as its share of total WFE spending continuing to rise from now as far as we can see these roadmaps. we see etch and deposition intensity as its share of total wfe spending continuing to rise from now as far as we can see these roadmaps It says Lam is in exactly the right markets, and that's where we've put all of our focus, etch and deposition leadership. it says lam is in exactly the right markets and that's where we've put all of our focus etch and deposition leadership Finally, I think the reality is we're gaining share. finally i think the reality is we're gaining share If you look at the last two years' performance, we've gained share of WFE. if you look at the last two years' performance we've gained share of wfe Partly it's that our markets are expanding faster than WFE. partly it's that our markets are expanding faster than wfe Partly it's that we have, I think at a faster pace than most, refreshed our product lines. partly it's that we have i think at a faster pace than most refreshed our product lines We just introduced a new Akara conductor etch tool with this DirectDrive RF capability. We're sitting here with a great product portfolio in the right markets, and really excited about the future growth opportunities. We just introduced a new Akara conductor etch tool with this DirectDrive RF capability. we just introduced a new akara conductor etch tool with this directdrive rf capability We're sitting here with a great product portfolio in the right markets, and really excited about the future growth opportunities. we're sitting here with a great product portfolio in the right markets and really excited about the future growth opportunities

Speaker 1: Got it. Right place, right time, right stuff. Got it. got it Right place, right time, right stuff. right place right time right stuff

Speaker 2: There we go. There we go. there we go

Speaker 1: There we go. There we go. there we go

Speaker 2: Perfect. Perfect. perfect

Speaker 1: With that, I think we'll close it out. Thank you so much. With that, I think we'll close it out. with that i think we'll close it out Thank you so much. thank you so much

Speaker 2: Thank you. Thank you. thank you