Lam Research Q2 2026 Lam Research Corp Earnings Call | AllMind AI Earnings | AllMind AI
Q2 2026 Lam Research Corp Earnings Call
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I would now like to turn the conference over to ROM Ganesh vice president of investor relations. Please go ahead.
Thank you and good afternoon everyone. Welcome to the land research quarterly earnings conference call.
With me today are Tim Archer. President and chief executive officer and that bettinger Executive, Vice President and Chief Financial Officer.
During today's call, we will share our overview on the business environment and we will review our financial results for the December 2025 quarter and our outlook for the March 2026 quarter.
The press release detailing of Financial Resources was distributed a little after 1:00 p.m. Pacific time.
The release can also be found on the investor relations section of the company's website, along with the presentation slide that accompany today's call.
Today's presentation in, Q&A include forward-looking statements, that are subject to risks and uncertainties reflected, in the risk factors, disclosed in our SEC public filings.
Please see. Accompanying slides in the presentation for additional information.
Today's discussion of a financial resource will be presented on a, non-gaap financial basis, unless otherwise specified.
A detailed reconciliation between gaap and non-gaap results can be found in the accompanying. Slides in the presentation.
This call is scheduled to last until 3 p.m. Pacific Time. A replay of this call will be made available later this afternoon on our website. And with that I'll hand the call over to Tim. Thank you Ron and good afternoon everyone. We ended calendar year 2025 on a strong. Note, delivering December quarter revenues ahead of the, midpoint of our guidance, gross margins, operating, margins and EPS all exceeded the high end of the range.
Our performance demonstrates continued, strong execution in an accelerating semiconductor demand environment.
At our investor Day event. Last year, we outlined our tremendous opportunities to expand our market and gain. Share at every success of Technology node, vertical scaling of device and packaging. Architectures is driving higher deposition and Edge intensity and moving the market to our strengths.
Division. We shared was to more than double Lamb's revenue and profit over the next 5 years. Today, we are well on our way.
With the industry, ramping capacity and adopting new technologies to meet the demands of the AI transformation.
Lands, deposition and Edge. Capabilities are proving to be key enablers in the transition to gate all-around transistors backside, power deposition high performance materials and 3D Advanced Packaging.
We prepared for this moment launching an array of new products and Advanced Services. Targeted at broadening our exposure across dramm Leading Edge Foundry, logic and nand. We've also invested in expanding our manufacturing, and R&D footprint to increase operational velocity in response to strong customer demand.
In 2025 we achieved record revenues of more than 20 billion dollars and expanded our served available Market or spam share of wfe into the mid-30s percent range.
This marks solid progress, over our multi-year goal of being in the high 30s.
Our ship share of wfe grew by well over 1 percentage Point year on year and our csbg business. Hit key Milestones with the size of our installed base, topping 100,000 Chambers and revenue growing faster than the increase in installed base units.
We are proud of these accomplishments, but there's even more to come. The AI transformation is driving industry. Spending higher in 2025 wfe came in close to 110 billion dollars. Our initial 2026 view is for wfe to be in the 135 billion range. With the growth in spending remaining constrained by a shortage of available clean room space.
Chip makers have been public about their e efforts to alleviate constraints, but they've also come into on sold out conditions persisting indicating the magnitude of the challenge.
We expect wfb this year to be weighted to the second half with robust growth in Investments across all 3 device. Segments led by dram and Leading Edge Foundry logic.
All indications are that we are still in the early stages of the AI buildout.
Appetite for greater compute and storage capability at both, the device and package level.
In Foundry, logic customers are excelling accelerating migration to nodes. Employing gate all-around transistors. If you recall, we previously said that the transition to gate all-around equates to roughly 1 billion dollars in incremental. Lamb Sam for every 100,000 wafer starts per month of capacity.
Given the 3D nature of gate all around structures. We are well positioned with our deposition and Edge portfolio to gain share within this segment.
In addition.
Customers are integrating more functionality with Advanced packaging. We previously estimated Advanced packaging would make up a mid single digit percentage of overall Foundry logic equipment. Spend
As additional devices, including those for mobile applications, adopt more complex, packaging schemes. We see this number moving higher,
In high bandwidth memory or hbm. Advanced packaging is critical for the transition to hbm and 4E and stacking of up to 16 layers.
Lamb is in an excellent position given our Market leadership and electroplating and TSC Edge. We expect our overall Advanced packaging business to grow more than 40% in 2026. How performing our view of wfp growth in this space.
Finally, in nand demand is growing faster than previously expected as new use cases for high capacity, ssds emerge.
Non-volatile context, memory layers, enable large scale. I AI inference. Have the potential to add incremental growth in manned bit demand.
For every 2 to 3 million accelerators sold. We estimate an incremental, 1 Point increase in overall man, bit demand growth.
Glam has the industry's largest installed base of man systems and is well positioned to help perform as the demand Market in Flex higher.
Timothy Archer: SSDs emerge. Nonvolatile context memory layers that enable large-scale AI inference have the potential to add incremental growth in NAND bit demand. For every 2 to 3 million accelerators sold, we estimate an incremental 1-point increase in overall NAND bit demand growth. Lam has the industry's largest installed base of NAND systems and is well-positioned to outperform as the NAND market inflects higher. Against this backdrop of strong semiconductor demand and accelerated technology transitions, we are seeing increased momentum for our newly launched products. Acara, our latest generation conductor etch system, has doubled its installed base over the past year, with production tool of record wins for EUV and high aspect ratio etch applications in advanced DRAM and foundry logic. Critical dimensions in foundry logic are shrinking by roughly 10 to 20% node to node.
Timothy Archer: SSDs emerge. Nonvolatile context memory layers that enable large-scale AI inference have the potential to add incremental growth in NAND bit demand. For every 2 to 3 million accelerators sold, we estimate an incremental 1-point increase in overall NAND bit demand growth. Lam has the industry's largest installed base of NAND systems and is well-positioned to outperform as the NAND market inflects higher. Against this backdrop of strong semiconductor demand and accelerated technology transitions, we are seeing increased momentum for our newly launched products. Acara, our latest generation conductor etch system, has doubled its installed base over the past year, with production tool of record wins for EUV and high aspect ratio etch applications in advanced DRAM and foundry logic. Critical dimensions in foundry logic are shrinking by roughly 10 to 20% node to node.
With a large scale AI inference have the potential to add incremental growth in NAND bit demand.
Against this backdrop of strong, semiconductor demand and accelerated, technology transitions. We are seeing increased momentum for our newly launched products a Clara, our latest generation conductor Edge system has doubled. Its installed base over the past year with Production Tool of record wins for euv and high aspect ratio Edge applications in advanced dramm and Foundry logic.
For every $2 million to $3 million accelerators sold we estimate an incremental one point increase in overall NAND bit demand growth.
Critical dimensions in Foundry, logic or shrinking by roughly 10 to 20% node to node.
<unk> has the industry's largest installed base of <unk> systems, and is well positioned to outperform as the NAND market in flex higher.
Similarly, in dram aspect. Ratios are increasing with each node and process complexity is set to grow even more with future moves to 4S squared and 3D D Ram.
Against this backdrop of strong semiconductor demand and accelerated technology transitions, we're seeing increased momentum for our newly launched products.
Consequently multiple customers have chosen a car for its unmatched, ability to etch the smallest Dimensions at very high aspect ratios while maintaining profile control and reducing variability across the wafer.
Ah Klara, our latest generation conductor etch system has doubled its installed base over the past year with production tool of record wins for <unk> and high aspect ratio etch applications and advanced DRAM and foundry logic.
This is achieved through new Innovations including our direct drive solid-state. Power delivery hardware and Tempo, plasma pulsing.
Critical dimensions in foundry logic are shrinking by roughly 10% to 20% node to node.
In Next Generation gate all around devices. We expect the number of applications using a car to grow by roughly 2 times. Including wins for critical front-end silicon etch applications.
Similarly in DRAM aspect ratios are increasing with each node and process complexity is set to grow even more with future moves to forest square and <unk> DRAM.
Timothy Archer: Similarly, in DRAM, aspect ratios are increasing with each node, and process complexity is set to grow even more with future moves to 4F² and 3D DRAM. Consequently, multiple customers have chosen Acara for its unmatched ability to etch the smallest dimensions at very high aspect ratios while maintaining profile control and reducing variability across the wafer. This is achieved through new innovations, including our direct drive solid-state power delivery hardware and Tempo plasma pulsing. In next-generation gate-all-around devices, we expect the number of applications using Acara to grow by roughly 2x, including wins for critical front-end silicon etch applications. In DRAM, we already have wins with Acara for the 1C node that are set to ramp this year, and expect growing momentum as the applications using Acara expand nearly 3x in the subsequent 1D node.
Similarly, in DRAM, aspect ratios are increasing with each node, and process complexity is set to grow even more with future moves to 4F² and 3D DRAM. Consequently, multiple customers have chosen Acara for its unmatched ability to etch the smallest dimensions at very high aspect ratios while maintaining profile control and reducing variability across the wafer. This is achieved through new innovations, including our direct drive solid-state power delivery hardware and Tempo plasma pulsing. In next-generation gate-all-around devices, we expect the number of applications using Acara to grow by roughly 2x, including wins for critical front-end silicon etch applications. In DRAM, we already have wins with Acara for the 1C node that are set to ramp this year, and expect growing momentum as the applications using Acara expand nearly 3x in the subsequent 1D node.
In dram.
Consequently, multiple customers have chosen the quora for its unmatched ability to etch the smallest dimensions and very high aspect ratios, while maintaining profile control and reducing variability across the wafer.
We already have winds that are the car for the 1C node that are set to ramp this year and expect growing momentum as the applications, using a car, expand nearly 3 times in the subsequent 1D node.
As we look out over a multi-year period, the unprecedented AI ramp demands greater Speed and Agility across the ecosystem.
This is achieved through new innovations, including our direct drive solid state power delivery hardware and tempo plasma pulsing.
Our customers are moving faster at every stage of process development and Manufacturing. So we have increased the velocity of our execution across the board.
And next generation gate all around devices, we expect the number of applications using our Cora to grow by roughly two times, including wins for critical front end silicon etch applications.
In DRAM.
We already have wins with a car for the <unk> node that are set to ramp this year and expect growing momentum as the applications using our car expanded nearly three times and the subsequent <unk> node.
We are strengthening our supply base automating Logistics and ramping high volume manufacturing over the last 4 years. We have nearly doubled, our overall manufacturing capacity and in 2025 we launched state-of-the-art automated warehouses that enable greater production efficiency.
These Investments have proved critical in the fast ramping Market environment and we're set to expand our footprint further to meet the demand, we see over the next several years.
As we look out over a multiyear period, the unprecedented AI ramp demands greater speed and agility across the ecosystem.
Timothy Archer: As we look out over a multiyear period, the unprecedented AI ramp demands greater speed and agility across the ecosystem. Our customers are moving faster at every stage of process development and manufacturing, so we have increased the velocity of our execution across the board. We are strengthening our supply base, automating logistics, and ramping high-volume manufacturing. Over the last four years, we have nearly doubled our overall manufacturing capacity, and in 2025, we launched state-of-the-art automated warehouses that enable greater production efficiency. These investments have proved critical in a fast-ramping market environment, and we're set to expand our footprint further to meet the demand we see over the next several years. Our product sales and support teams are also executing to the accelerated pace of customer demand.
As we look out over a multiyear period, the unprecedented AI ramp demands greater speed and agility across the ecosystem. Our customers are moving faster at every stage of process development and manufacturing, so we have increased the velocity of our execution across the board. We are strengthening our supply base, automating logistics, and ramping high-volume manufacturing. Over the last four years, we have nearly doubled our overall manufacturing capacity, and in 2025, we launched state-of-the-art automated warehouses that enable greater production efficiency. These investments have proved critical in a fast-ramping market environment, and we're set to expand our footprint further to meet the demand we see over the next several years. Our product sales and support teams are also executing to the accelerated pace of customer demand.
Our customers are moving faster at every stage of process development and manufacturing. So we have increased the velocity of our execution across the board.
Our product sales and support teams are also, executing to The Accelerated pace of customer demand over the course of 2025. Lamb was recognized with nearly 40 supplier Awards. Highlighting in many cases, our fast pool installations and outstanding production ramp support
We are strengthening our supply base automating logistics and ramping high volume manufacturing over the last four years, we've nearly doubled our overall manufacturing capacity and in 2025, we launched state of the art automated warehouses that enable greater production efficiency. These.
Looking forward, we see, Lambs equipment, intelligence Solutions, and dextro cobots leading the way to the autonomous Fab.
An automated maintenance and precise Global Fleet matching.
These investments have proved critical and the fast ramping marketing environment, and we're set to expand our footprint further to meet the demand we see over the next several years.
Dextro continued to gain momentum in 2025 expanding to cover 6, different lamb tool types.
Our product sales and support teams are also executing to the accelerated pace of customer demand.
And finally, in an environment where inflections are more complex and Innovation timelines are compressing. We have transformed, our R&D capabilities to help us stay ahead.
Over the course of 2025 Lam was recognized with nearly 40 supplier awards highlighting in many cases are fast tool installations and outstanding production ramp support.
Timothy Archer: Over the course of 2025, Lam was recognized with nearly 40 supplier awards, highlighting, in many cases, our fast tool installations and outstanding production ramp support. Looking forward, we see Lam's equipment intelligence solutions and Dextro cobots leading the way to the autonomous fab, with predictive and automated maintenance, and precise global fleet matching. Dextro continued to gain momentum in 2025, expanding to cover 6 different Lam tool types. And finally, in an environment where inflections are more complex and innovation timelines are compressing, we have transformed our R&D capabilities to help us stay ahead. We are utilizing velocity labs located close to our customers to screen new materials, new hardware, and new process regimes at a rate not previously possible. We are also leveraging Lam's digital twinning capabilities to shorten product development cycles and converge on next-generation tool and process solutions with greater efficiency.
Over the course of 2025, Lam was recognized with nearly 40 supplier awards, highlighting, in many cases, our fast tool installations and outstanding production ramp support. Looking forward, we see Lam's equipment intelligence solutions and Dextro cobots leading the way to the autonomous fab, with predictive and automated maintenance, and precise global fleet matching. Dextro continued to gain momentum in 2025, expanding to cover 6 different Lam tool types. And finally, in an environment where inflections are more complex and innovation timelines are compressing, we have transformed our R&D capabilities to help us stay ahead. We are utilizing velocity labs located close to our customers to screen new materials, new hardware, and new process regimes at a rate not previously possible. We are also leveraging Lam's digital twinning capabilities to shorten product development cycles and converge on next-generation tool and process solutions with greater efficiency.
We are utilizing velocity Labs, located, close to our customers to screen, new materials, new hardware, and new process regime at a rate, not previously possible.
Looking forward, we see lambs equipment intelligence solutions, and Dextro Cobalts, leading the way to the autonomous fab.
We are also leveraging Lamb's digital twin capabilities to shorten product development, cycles and Converge on Next Generation tool and process Solutions with greater efficiency.
With predictive and automated maintenance and precise global fleet matching that.
Wrapping up.
<unk> continued to gain momentum in 2025, expanding to cover six different Lam tool types and.
the growth we envision for land that our investor event 1 year ago is materializing faster than we anticipated
And finally in an environment, where inflections are more complex and innovation timelines are compressing we've transformed our R&D capabilities to help us stay ahead.
We're making progress against our Sam expansion, share, gains and profitability objectives.
We are utilizing velocity labs, located close to our customers to screen, new materials, new hardware and new process Rajiv at a rate not previously possible.
And with the demand environment continuing to accelerate, we are elevating our focus on scaling. The company delivering for customers and outperforming in the AI era.
Thank you, and here's Doug.
Great. Thank you. Tim
We are also leveraging <unk> digital printing capabilities to shortened product development cycles and converge on next generation tool and process solutions with greater efficiency.
Good afternoon, everyone. Thank you for joining our call today. During what I know is a super busy earning season.
Wrapping up.
Timothy Archer: Wrapping up, the growth we envisioned for Lam at our investor event one year ago is materializing faster than we anticipated. We are making progress against our SAM expansion, share gain, and profitability objectives. And with the demand environment continuing to accelerate, we are elevating our focus on scaling the company, delivering for customers, and outperforming in the AI era. Thank you, and here's Doug.
Wrapping up, the growth we envisioned for Lam at our investor event one year ago is materializing faster than we anticipated. We are making progress against our SAM expansion, share gain, and profitability objectives. And with the demand environment continuing to accelerate, we are elevating our focus on scaling the company, delivering for customers, and outperforming in the AI era. Thank you, and here's Doug.
The growth we envisioned for Lam at our Investor event, one year ago is materializing faster than we anticipated were.
Before I get into the details, I'd like to say that we were quite pleased with the strong execution across the company and calendar year, 2025 was translated into record, top and bottom line financial performance.
We're making progress against our Sam expansion share gains and profitability objectives and with the demand environment continuing to accelerate we are elevating our focus on scaling the company delivering for customers and outperforming in the AI era.
In calendar year, 2025 Revenue was a record coming in at 206 billion dollars, which is up 27% year-over-year.
Thank you and here's Doug.
Margin was 49.9%. The highest result as a combined company for the full year since the novelis merger back in 2012.
Great. Thank you Tim.
Douglas R. Bettinger: Great. Thank you, Tim. Good afternoon, everyone. Thank you for joining our call today during what I know is a super busy earnings season. Before I get into the details, I'd like to say that we were quite pleased with the strong execution across the company in calendar year 2025, which translated into record top and bottom-line financial performance. In calendar year 2025, revenue was a record, coming in at $20.6 billion, which was up 27% year over year. CSBG revenue also reached a record of $7.2 billion. Gross margin was 49.9%, the highest result as a combined company for the full year since the Novellus merger back in 2012. Gross profit increased 31% year over year to $10.3 billion.
Douglas Bettinger: Great. Thank you, Tim. Good afternoon, everyone. Thank you for joining our call today during what I know is a super busy earnings season. Before I get into the details, I'd like to say that we were quite pleased with the strong execution across the company in calendar year 2025, which translated into record top and bottom-line financial performance. In calendar year 2025, revenue was a record, coming in at $20.6 billion, which was up 27% year over year. CSBG revenue also reached a record of $7.2 billion. Gross margin was 49.9%, the highest result as a combined company for the full year since the Novellus merger back in 2012. Gross profit increased 31% year over year to $10.3 billion.
Good afternoon, everyone and thank you for joining our call today during what I know is a super busy earnings season.
Gross profit increased 31% year-over-year to 10.3 billion.
Before I get into the details I'd like to say that we were quite pleased with the strong execution across the company in calendar year, 2025, which translated into record top and bottom line financial performance.
We also had record operating margin of 34.1% and operating profit dollars of 7 billion.
Which was up 41% year-over-year?
In calendar year 2025 revenue was a record coming in at $26 billion, which was up 27% year over year.
In limited earnings per share or $4.89, which was up 49% year-over-year.
Looking at it. We delivered leverage from the top to the bottom of the p&l in 2025.
<unk> revenue also reached a record of $7 2 billion.
Let me turn to the December quarter results.
Gross margin was 49, 9% the highest result, as a combined company for the full year sent some umbrellas merger back in 2012.
Our Revenue was above the midpoint of guidance while gross margin operating margin and earnings per share all exceeded. The high-end of our guided range,
Gross profit increased 31% year over year to $10 3 billion.
We also had record operating margin of 34, 1% and operating profit dollars 7 billion.
Douglas R. Bettinger: We also had record operating margin of 34.1% and operating profit dollars of $7 billion, which was up 41% year-over-year. Diluted earnings per share were $4.89, which was up 49% year-over-year. Looking at it, we delivered leverage from the top to the bottom of the P&L in 2025. Let me turn to the December quarter results. Our revenue was above the midpoint of guidance... While gross margin, operating margin, and earnings per share all exceeded the high end of our guided range. Revenue for the December quarter was a record, coming in at $5.34 billion. This marked our, our 10th consecutive quarter of revenue growth.
We also had record operating margin of 34.1% and operating profit dollars of $7 billion, which was up 41% year-over-year. Diluted earnings per share were $4.89, which was up 49% year-over-year. Looking at it, we delivered leverage from the top to the bottom of the P&L in 2025. Let me turn to the December quarter results. Our revenue was above the midpoint of guidance... While gross margin, operating margin, and earnings per share all exceeded the high end of our guided range. Revenue for the December quarter was a record, coming in at $5.34 billion. This marked our, our 10th consecutive quarter of revenue growth.
Revenue for December quarter. Was a record coming in at 5. 3, 4.
The deferred revenue balance at quarter, end came in at 2.25 billion dollars.
Which was up 41% year over year.
Diluted earnings per share were $4 89.
Balance sequentially due to an approximately 500 million reduction in those customer Advanced down payments.
Which was up 49% year over year.
Looking at it we delivered leverage from the top to the bottom of the P&L in 2025.
From a market segment perspective Foundry, accounted for 59% of our systems Revenue in the December quarter.
Let me turn to the December quarter results.
Our revenue was above the midpoint of guidance, while gross margin operating margin and earnings per share.
Slightly down sequentially but up from 35% in the December 2024, period.
All exceeded the high end of our guided range.
This underscores, the success of our strategic, focus and execution and Foundry.
Revenue for the December quarter was a record coming in at $534 billion. This marked our 10th consecutive quarter of revenue growth.
boundary strength came from Investments at the Leading Edge, in addition to mature node spending that we saw in China
Memory was 34% of systems Revenue in line with prior quarter.
The deferred revenue balance at quarter end came in at $225 billion.
Douglas R. Bettinger: The deferred revenue balance at quarter end came in at $2.25 billion, down sequentially due to an approximately $500 million reduction in those customer advance down payments. From a market segment perspective, Foundry accounted for 59% of our systems revenue in the December quarter, slightly down sequentially, but up from 35% in the December 2024 period. This underscores the success of our strategic focus and execution in Foundry. Foundry strength came from investments at the leading edge in addition to mature node spending that we saw in China. Memory was 34% of systems revenue, in line with prior quarter. Within memory, we generated record DRAM revenue, accounting for 23% of systems revenue, which was up from 16% in the September quarter. Investments in high bandwidth memory continued to remain strong, driven by movement to HBM3E and HBM4.
The deferred revenue balance at quarter end came in at $2.25 billion, down sequentially due to an approximately $500 million reduction in those customer advance down payments. From a market segment perspective, Foundry accounted for 59% of our systems revenue in the December quarter, slightly down sequentially, but up from 35% in the December 2024 period. This underscores the success of our strategic focus and execution in Foundry. Foundry strength came from investments at the leading edge in addition to mature node spending that we saw in China. Memory was 34% of systems revenue, in line with prior quarter. Within memory, we generated record DRAM revenue, accounting for 23% of systems revenue, which was up from 16% in the September quarter. Investments in high bandwidth memory continued to remain strong, driven by movement to HBM3E and HBM4.
Down sequentially due to an approximately $500 million reduction in those customer advanced on payments.
Within memory, we generated record D, Ram Revenue accounting for 23% of systems Revenue.
Which was up from 16% in the September quarter.
From a market segment perspective foundry accounted for 59% of our systems revenue in the December quarter.
Investments in high bandwidth memory continued to remain strong driven by movement to hbm3 en4.
Slightly down sequentially, but up from 35% in the December 2024 period.
We also saw a traditional node migrations to the 1B and 1C nodes enabling the transition to ddr5.
This underscores the success of our strategic focus and execution in foundry.
Nonvolatile memory contributed 11% of our system to revenue done from 18% in September quarter.
Foundry strength came from investments at the leading edge. In addition to mature node spending that we saw in China.
This trajectory was in line with our expectations, for customer plans coming into the year.
Memory was 34% of systems revenue in line with prior quarter.
Within memory, we generated record DRAM revenue accounting for 23% of systems revenue, which was up from 16% in the September quarter.
Despite the quarterly decline nand revenues grew strongly for lamb. And what was the first half weighted calendar year 2025?
As we enter 2026, we see solid end market demand, as customers prepare for their next stage of AI driven growth in land.
Investments in high bandwidth memory continued to remain strong driven by movement to HBM three and four.
And finally, the logic and other segment came in at 7% of systems Revenue in their December quarter.
We also saw a traditional node migrations to the one b and one C nodes, enabling the transition to <unk>.
Douglas R. Bettinger: We also saw traditional node migrations to the 1B and 1C nodes, enabling the transition to DDR5. Non-volatile memory contributed 11% of our systems revenue, down from 18% in September quarter. This trajectory was in line with our expectations for customer plans coming into the year. Despite the quarterly decline, NAND revenues grew strongly for Lam in what was a first half weighted calendar year, 2025. As we enter 2026, we see solid end market demand as customers prepare for the next stage of AI-driven growth in NAND. And finally, the logic and other segment came in at 7% of systems revenue in the December quarter, slightly up sequentially. Let's turn to the regional breakdown of our total revenue. China came in at 35%, which was a decrease from the prior quarter level of 43%, but slightly higher than our original expectations.
We also saw traditional node migrations to the 1B and 1C nodes, enabling the transition to DDR5. Non-volatile memory contributed 11% of our systems revenue, down from 18% in September quarter. This trajectory was in line with our expectations for customer plans coming into the year. Despite the quarterly decline, NAND revenues grew strongly for Lam in what was a first half weighted calendar year, 2025. As we enter 2026, we see solid end market demand as customers prepare for the next stage of AI-driven growth in NAND. And finally, the logic and other segment came in at 7% of systems revenue in the December quarter, slightly up sequentially. Let's turn to the regional breakdown of our total revenue. China came in at 35%, which was a decrease from the prior quarter level of 43%, but slightly higher than our original expectations.
Slightly up, sequentially.
Non volatile memory contributed 11% of our systems revenue down from 18% in September quarter.
Let's turn to the regional breakdown of our total revenue. China came in at 35%, which was a decrease from the prior quarter level of 43%, but slightly higher than our original expectations,
This trajectory was in line with our expectations for customer plans coming into the year.
This was due to updates in the affiliate Rule and the resulting timing of shipments from that.
Despite the quarterly decline NAND revenues grew strongly for Lam in what was a first half weighted calendar year 2025.
As we enter 2026, we see solid end market demand as customers prepare for the next stage of AI driven growth in NAND.
The next largest Geographic. Concentrations were Taiwan coming in at 20% of sequentially, for 19% and Korea, at 20% of sequentially from 15%.
And finally, the logic and other segment came in at 7% of systems revenue in the December quarter.
Customer support business group generated approximately 2 billion dollars in revenue. For the December quarter up, 12% sequentially on an increase in Reliant systems.
Slightly up sequentially.
Let's turn to the regional breakdown of our total revenue China came in at 35%, which was a decrease from the prior quarter level of 43%, but slightly higher than our original expectations.
We were 14% higher than the same period in 2024 primarily on growth and Spares.
This was due to updates and the affiliate rule and the resulting timing of shipments from that.
Douglas R. Bettinger: This was due to updates in the Affiliate Rule and the resulting timing of shipments from that. The next largest geographic concentrations were Taiwan, coming in at 20%, up sequentially from 19%, and Korea at 20%, up sequentially from 15%. Customer Support Business Group generated approximately $2 billion in revenue for the December quarter, up 12% sequentially on an increase in Reliant systems. We were 14% higher than the same period in 2024, primarily on growth in spares. CSPG obviously remains a key part of our growth strategy with our expanding installed base and innovation in advanced services. NAND spending enabled record upgrade revenue in 2025, up more than 90% year-over-year. In the 13 years since we brought Lam and Novellus together, I'd like to remind everybody that CSPG has grown every year except for once. Let's look at profitability.
This was due to updates in the Affiliate Rule and the resulting timing of shipments from that. The next largest geographic concentrations were Taiwan, coming in at 20%, up sequentially from 19%, and Korea at 20%, up sequentially from 15%. Customer Support Business Group generated approximately $2 billion in revenue for the December quarter, up 12% sequentially on an increase in Reliant systems. We were 14% higher than the same period in 2024, primarily on growth in spares. CSPG obviously remains a key part of our growth strategy with our expanding installed base and innovation in advanced services. NAND spending enabled record upgrade revenue in 2025, up more than 90% year-over-year. In the 13 years since we brought Lam and Novellus together, I'd like to remind everybody that CSPG has grown every year except for once. Let's look at profitability.
Cspg obviously remains a key part of our growth strategy with our expanding installed base and innovation in Advanced Services.
The next largest geographic concentrations for Taiwan coming in at 20% up sequentially from 19% in Korea at 20% up sequentially from 15%.
Nan spending enabled, record upgrade Revenue in 2025 up more than 90% year-over-year.
In the 13th, since we brought lava novelis together. I'd like to remind everybody that cspg has grown every year, except for 1.
Customer support business group generated approximately $2 billion in revenue for the December quarter.
Let's look at profitability. Gross margin of December quarter was 49.7%.
Up 12% sequentially and an increase in reliant systems.
Which exceeded the high end of our guided range on better than expected. Customer mix.
We were 14% higher than the same period in 2024, primarily on growth in spares.
<unk>, obviously remains a key part of our growth strategy with our expanding installed base and innovation and advanced services.
Sequentially gross margin was about a percentage Point, lower reflecting, a customer. Mix that was less favorable than what we saw in September.
Operating expensive for December came in at 827 million which is roughly flat sequentially.
NAND spending enabled record upgrade revenue in 2025 up more than 90% year over year.
R&D, accounted for 68% of the total operating expenses.
In the 13 years since we brought <unk> developed together I'd like to remind everybody that <unk> has grown every year except for one.
We continue investing to maintain our leadership with a differentiated product portfolio for our customers with Innovations like vantex, aara Halo and dextro.
Let's look at profitability gross margin in the December quarter was 49, 7%.
The December of quarter operating margin was 34.3%.
Douglas R. Bettinger: Gross margin in the December quarter was 49.7%, which exceeded the high end of our guided range on better-than-expected customer mix. Sequentially, gross margin was about a percentage point lower, reflecting a customer mix that was less favorable than what we saw in September. Operating expenses for December came in at $827 million, which was roughly flat sequentially. R&D accounted for 68% of the total operating expenses. We continue investing to maintain our leadership with a differentiated product portfolio for our customers, with innovations like Vantex, Acara, Halo, and Dextro. The December quarter operating margin was 34.3%, exceeding the high end of our guidance. The non-GAAP tax rate for the quarter came in at 13.2%, generally in line with our expectations. We continue to see the tax rate in the low to mid-teens for calendar 2026.
Gross margin in the December quarter was 49.7%, which exceeded the high end of our guided range on better-than-expected customer mix. Sequentially, gross margin was about a percentage point lower, reflecting a customer mix that was less favorable than what we saw in September. Operating expenses for December came in at $827 million, which was roughly flat sequentially. R&D accounted for 68% of the total operating expenses. We continue investing to maintain our leadership with a differentiated product portfolio for our customers, with innovations like Vantex, Acara, Halo, and Dextro. The December quarter operating margin was 34.3%, exceeding the high end of our guidance. The non-GAAP tax rate for the quarter came in at 13.2%, generally in line with our expectations. We continue to see the tax rate in the low to mid-teens for calendar 2026.
Exceeding, the high end of our guidance.
Which exceeded the high end of our guided range on better than expected customer mix.
and on get to the quarter payment of 13.2%, generally in line with our expectations,
Sequentially gross margin was about a percentage point lower reflecting a customer mix that was less favorable than what we saw in September.
We continue to see the tax rate in the low to mid teens for calendar 2026.
Operating expenses for December came in at $827 million, which was roughly flat sequentially.
Other income and expense for December quarter was approximately $10 million in income.
Compared with 8 million in income in the September quarter.
R&D accounted for 68% of the total operating expenses.
We continue investing to maintain our leadership with a differentiated product portfolio for our customers with innovations like Phanteks Akara Halo and dextro.
Slight, fluctuation in O and E was primarily the result of gains in our Venture portfolio. Partly offset by lower interest income.
as we've talked about in the past, you should expect to see variability in alignment quarter to quarter,
The December quarter operating margin was 34, 3%.
Exceeding the high end of our guidance.
The capital return of December quarter. We allocated approximately 1.4 billion dollars towards shared BuyBacks through open market, share for purchases.
The non-GAAP tax rate for the quarter came in at 13, 2% generally in line with our expectations.
Our average buyback price in the quarter was approximately 154 per share.
We continue to see the tax rate in the low to mid teens for calendar 2026.
Other income and expense for the December quarter was approximately $10 million in income.
Douglas R. Bettinger: Other income and expense for the December quarter was approximately $10 million in income, compared with $8 million in income in the September quarter. Slight fluctuation in OI&E was primarily the result of gains in our venture portfolios, partly offset by lower interest income. As we've talked about in the past, you should expect to see variability in OI&E quarter to quarter. For capital return in the December quarter, we allocated approximately $1.4 billion towards share buybacks through open market share repurchases. Our average buyback price in the quarter was approximately $154 per share. In calendar year 2025, we repurchased approximately 39 million shares at an average price of $104 per share. We also paid $328 million in dividends in the quarter.
Other income and expense for the December quarter was approximately $10 million in income, compared with $8 million in income in the September quarter. Slight fluctuation in OI&E was primarily the result of gains in our venture portfolios, partly offset by lower interest income. As we've talked about in the past, you should expect to see variability in OI&E quarter to quarter. For capital return in the December quarter, we allocated approximately $1.4 billion towards share buybacks through open market share repurchases. Our average buyback price in the quarter was approximately $154 per share. In calendar year 2025, we repurchased approximately 39 million shares at an average price of $104 per share. We also paid $328 million in dividends in the quarter.
The calendar year 2025, we re purchased approximately 39 million shares at an average price of $104 per share.
Compared with $8 million of income in the September quarter.
We also paid 328 million, in dividends in the quarter.
Slight fluctuation in R&D was primarily the result of gains in our venture portfolio, partly offset by lower interest income.
To calendar year 2025, we returned 85% of our free cash flow.
As we've talked about in the past you should expect to see variability NOI on a quarter to quarter.
Our plans remain to return at least 85% of free, cash flow to our shareholders over time.
Capital return in the December quarter, we allocated approximately $1 4 billion towards share buybacks through open market share repurchases.
The December quarter diluted earnings per share were $1.27 which came in about the guidance range.
Our average buyback price in the quarter was approximately $154 per share.
The Demonic share count was 1.26 billion shares which was a reduction from the September quarter and consistent with our guidance.
In calendar year 2025.
We have 5.1 billion dollars remaining on our board. Authorized shared repurchase class.
Purchased approximately 39 million shares at an average price of $104 per share.
We also paid $328 million in dividends in the quarter.
In calendar 2025, we returned 85% of our free cash flow.
Let me pivot to the balance sheet cash and cash equivalents totaled 6.2 billion at the end of the December quarter, a decrease from 6.7 billion at the end of the September quarter.
Douglas R. Bettinger: In calendar year 2025, we returned 85% of our free cash flow. Our plans remain to return at least 85% of free cash flow to our shareholders over time. The December quarter diluted earnings per share were $1.27, which came in above the guidance range. The diluted share count was 1.26 billion shares, which was a reduction from the September quarter and consistent with our guidance. We have $5.1 billion remaining on our board-authorized share repurchase plan. Let me pivot to the balance sheet. Cash and cash equivalents totaled $6.2 billion at the end of the December quarter, a decrease from $6.7 billion at the end of the September quarter. The reduction in cash is attributed to capital return as well as CapEx spending.
In calendar year 2025, we returned 85% of our free cash flow. Our plans remain to return at least 85% of free cash flow to our shareholders over time. The December quarter diluted earnings per share were $1.27, which came in above the guidance range. The diluted share count was 1.26 billion shares, which was a reduction from the September quarter and consistent with our guidance. We have $5.1 billion remaining on our board-authorized share repurchase plan. Let me pivot to the balance sheet. Cash and cash equivalents totaled $6.2 billion at the end of the December quarter, a decrease from $6.7 billion at the end of the September quarter. The reduction in cash is attributed to capital return as well as CapEx spending.
Our plans remain to return at least 85% of free cash flow to our shareholders over time.
The reduction of cash is attributed to Capital return as well as capex spending.
The December quarter diluted earnings per share were $1 27, which came in above the guidance range.
The diluted share count was one $2 6 billion shares which was a reduction from the September quarter and consistent with our guidance.
As we look ahead, our strong cash position and continued. Free cash flow enable us flexibility to potentially simply repay the 750 million March 2026 notes when they mature.
We have $5 $1 billion remaining on our board authorized share repurchase plan.
They sales outstanding was 59 days in the December quarter, a decrease from 62 days in the September quarter inventory, turns improved to 2.7 times from 2.6 times in the prior quarter.
Let me pivot to the balance sheet cash and cash equivalents totaled $6 2 billion at the end of the December quarter, a decrease from $6 $7 billion at the end of the September quarter.
And up from 1.5 times a little over 2 years ago.
Transaction. And we were pleased by the sustained progress. We continue to make
The reduction in cash is attributed to capital return as well as Capex spending.
As we look ahead, our strong cash position and continued pre cash flow enable us flexibility to potentially simply repay the $750 million March 2026 notes when they mature.
Douglas R. Bettinger: As we look ahead, our strong cash position and continued free cash flow enable us flexibility to potentially simply repay the $750 million March 2026 notes when they mature. Day sales outstanding was 59 days in the December quarter, a decrease from 62 days in the September quarter. Inventory turns improved to 2.7 times from 2.6 times in the prior quarter, and up from 1.5 times a little over two years ago. As a company, we remain focused on asset utilization, and we were pleased by the sustained progress we continue to make. Our non-cash expenses in the December quarter included approximately $89 million for equity compensation, $91 million for depreciation, and $13 million in amortization.
As we look ahead, our strong cash position and continued free cash flow enable us flexibility to potentially simply repay the $750 million March 2026 notes when they mature. Day sales outstanding was 59 days in the December quarter, a decrease from 62 days in the September quarter. Inventory turns improved to 2.7 times from 2.6 times in the prior quarter, and up from 1.5 times a little over two years ago. As a company, we remain focused on asset utilization, and we were pleased by the sustained progress we continue to make. Our non-cash expenses in the December quarter included approximately $89 million for equity compensation, $91 million for depreciation, and $13 million in amortization.
Our non-cash expenses in December quarter included, approximately 80 M, 89 million for Equity, compensation, 91 million, for depreciation and 13 million in amortization.
Capital expenditures for December quarter was 261 million, which was up 76 million from the September quarter.
Days sales outstanding was 59 days in the December quarter, a decrease from 62 days in the September quarter.
Spending was driven by investments in manufacturing capacity.
Inventory turns improved to two seven times from two six times in the prior quarter.
R&D and lab infrastructure that supports our technology road map and customer needs.
And up from one five times, a little over two years ago.
We also purchased a new building in Arizona to support the growing industry footprint there.
As a company we remain focused on asset utilization and we were pleased by the sustained progress we continue to make.
This Capital spending remains consistent with our Global strategy of expanding capabilities. Close to where our customers are.
Our noncash expenses in the December quarter included approximately $80 million $89 million for equity compensation.
Looking forward, we continue to expect capital expenditure to be in the 4 to 5% of Revenue range.
The $1 million for depreciation and $13 million of amortization.
Capital.
Douglas R. Bettinger: Capital expenditures for the December quarter was $261 million, which was up $76 million from the September quarter. Spending was driven by investments in manufacturing capacity, R&D, and lab infrastructure that supports our technology roadmap and customer needs. We also purchased a new building in Arizona to support the growing industry footprint there. This capital spending remains consistent with our global strategy of expanding capabilities close to where our customers are. Looking forward, we continue to expect capital expenditure to be in the 4% to 5% of revenue range. We ended the December quarter with approximately 19,700 regular full-time employees, which was an increase of approximately 300 people from the prior quarter. Headcount increases were primarily within the field organization to support customer growth, as well as in R&D to support our long-term product roadmap.
Capital expenditures for the December quarter was $261 million, which was up $76 million from the September quarter. Spending was driven by investments in manufacturing capacity, R&D, and lab infrastructure that supports our technology roadmap and customer needs. We also purchased a new building in Arizona to support the growing industry footprint there. This capital spending remains consistent with our global strategy of expanding capabilities close to where our customers are. Looking forward, we continue to expect capital expenditure to be in the 4% to 5% of revenue range. We ended the December quarter with approximately 19,700 regular full-time employees, which was an increase of approximately 300 people from the prior quarter. Headcount increases were primarily within the field organization to support customer growth, as well as in R&D to support our long-term product roadmap.
<unk> for the December quarter was $261 million, which was up $76 million from the September quarter.
We haven't been December quarter with the approximately 19,700 regular full-time employees.
Which was an increase of approximately 300 people from the prior quarter.
Spending was driven by investments in manufacturing capacity.
Iconic increases were primarily within the field organization to support customer growth.
R&D and lab infrastructure that supports our technology roadmap and customer needs.
As well as an R&D to support our long-term product road map.
Let's turn to our non-gaap guidance for the March 2026 quarter.
We also purchased a new building in Arizona to support the growing industry footprint there.
We're expecting Revenue 5.7 billion plus or minus 300 million.
This capital spending remains consistent with our global strategy of expanding capabilities close to where our customers are.
We're expecting gross margin of 49% plus or minus 1 percentage point.
We're expecting to see slight headwinds from customer base.
Looking forward, we continue to expect capital expenditure to be in the 4% to 5% of revenue range.
Forecasting, operating margins of 34% plus or minus 1% percentage point.
We haven't been December quarter, with approximately 19 700 regular full time employees, which was an increase of approximately 300 people from the prior quarter.
You can see the normal seasonal uptick in operating expenses in the March quarter.
Headcount increases were primarily within the field organization to support customer growth.
And finally before casting earnings per share of a dollar 35 cents plus or minus 10 cents based on on a share count of approximately 1.26 billion shares.
so only a wrap-up
As well as in R&D to support our long term product roadmap.
Let's turn to our non-GAAP guidance for the March 2026 quarter.
Douglas R. Bettinger: Let's turn to our non-GAAP guidance for the March 2026 quarter. We're expecting revenue of $5.7 billion ± $300 million. We're expecting gross margin of 49% ± 1 percentage point. We're expecting to see slight headwinds from customer mix. We're forecasting operating margins of 34% ± 1 percentage point. You'll see the normal seasonal uptick in operating expenses in the March quarter. And finally, we're forecasting earnings per share of $1.35 ± $0.10, based on a share count of approximately 1.26 billion shares. Let me wrap up. We delivered a record year in 2025, reflecting strong execution and broad-based strength across our product portfolio. As we look into 2026, we expect meaningful year-over-year growth, supported by sustained demand in AI-driven markets, and continued investment in capacity.
Let's turn to our non-GAAP guidance for the March 2026 quarter. We're expecting revenue of $5.7 billion ± $300 million. We're expecting gross margin of 49% ± 1 percentage point. We're expecting to see slight headwinds from customer mix. We're forecasting operating margins of 34% ± 1 percentage point. You'll see the normal seasonal uptick in operating expenses in the March quarter. And finally, we're forecasting earnings per share of $1.35 ± $0.10, based on a share count of approximately 1.26 billion shares. Let me wrap up. We delivered a record year in 2025, reflecting strong execution and broad-based strength across our product portfolio. As we look into 2026, we expect meaningful year-over-year growth, supported by sustained demand in AI-driven markets, and continued investment in capacity.
we delivered a record year in 2025 for collecting strong execution and broad-based strength across our product portfolio.
We're expecting revenue of $5 7 billion, plus or minus $300 million.
As we look into the 2026, we expect meaningful year-over-year growth.
We're expecting gross margin of 49% plus or minus one percentage point.
Supported by sustained demand and AI driven markets and continued investment in capacity.
We're expecting to see slight headwinds from customer mix.
We're forecasting operating margins of 34% plus or minus one percentage point.
We agree with the prevailing view that much of the market will be under supplied in 2026 due to clean room. Space constraints.
You'll see the normal seasonal uptick in operating expenses in the March quarter.
In line with that we see 2026 as a second half weighted year.
With our strong balance sheet.
And finally, we're forecasting earnings per share of $1 35, plus or minus 10 based on a share count of approximately 126 billion shares.
And expanding installed base and the strength of our product portfolio.
We remain confident in Lamb's ability, to continue to outperform.
So let me wrap up.
We delivered a record year in 2025, reflecting strong execution and broad based strength across our product portfolio.
And deliver long-term value for our customers and shareholders.
Operator, that concludes our prepared remarks Tim. And I would now like to open up the call for questions.
As we look into 2026, we expect meaningful year over year growth supported by sustained demand in AI driven markets and continued investment in capacity.
We agree with prevailing view that much of the market will be under supplied in 2026 due to clean room space constraints.
We will now begin the question and answer session to ask a question. You may press star then 1 on your touchtone phone, if you're using a speaker-phone, please pick up your handset before pressing the keys.
Douglas R. Bettinger: We agree with the prevailing view that much of the market will be undersupplied in 2026 due to clean room space constraints. In line with that, we see 2026 as a second half-weighted year. With our strong balance sheet and expanding installed base and the strength of our product portfolio, we remain confident in Lam's ability to continue to outperform and deliver long-term value for our customers and shareholders. Operator, that concludes our prepared remarks. Tim and I would now like to open up the call for questions.
We agree with the prevailing view that much of the market will be undersupplied in 2026 due to clean room space constraints. In line with that, we see 2026 as a second half-weighted year. With our strong balance sheet and expanding installed base and the strength of our product portfolio, we remain confident in Lam's ability to continue to outperform and deliver long-term value for our customers and shareholders. Operator, that concludes our prepared remarks. Tim and I would now like to open up the call for questions.
In line with that we see 2026 as a second half weighted year.
If at any time your question has been addressed and you would like to withdraw your question. Please press star. Then to as a reminder, please limit yourself to 1 question and 1 follow-up. At this time, we will pause momentarily to assemble our roster.
With a strong balance sheet.
An expanding installed base and the strength of our product portfolio.
We remain confident in <unk> ability to continue to outperform and deliver long term value for our customers and shareholders.
Our first question comes from Tim our curry with UBS. Please go ahead.
Operator that concludes our prepared remarks, Tim and I would now like to open up the call for questions.
Thank you we will now begin the question and answer session to ask a question you May Press Star then one on your Touchtone phone if youre using a speakerphone. Please pick up your handset before pressing the keys.
Operator: Thank you. We will now begin the question-and-answer session. To ask a question, you may press star then one on your touchtone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. As a reminder, please limit yourself to one question and one follow-up. At this time, we will pause momentarily to assemble our roster. Our first question comes from Tim Arcuri with UBS. Please go ahead.
Operator: Thank you. We will now begin the question-and-answer session. To ask a question, you may press star then one on your touchtone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. As a reminder, please limit yourself to one question and one follow-up. At this time, we will pause momentarily to assemble our roster. Our first question comes from Tim Arcuri with UBS. Please go ahead.
At any time. Your question has been addressed and you would like to withdraw. Your question. Please press Star then queue. As a reminder, please limit yourself to one question and one follow up at this time, we will pause momentarily to assemble our roster.
Thanks a lot. Um, Doug, I had a question about wfe this year, so you said we're going to be constrained because of this Fab, uh, you know, Readiness, is it possible to say how much I know you're guiding, you know, wfe to 135 this year? I mean, if we use semiconductor revenue and you assume sort of a normal W, intensity number seems like you could get to like 150. So maybe the constraints are costing, the industry like 15 billion dollars. Is it possible to give a number in terms of how much the constraints are kind of costing in terms of, you know, wfe this year? So we can kind of pro format that out.
Thank you. Yeah, I knew somebody was going to ask that question. I should have anticipated.
Our first question comes from Tim Arcuri with UBS. Please go ahead.
Thanks, a lot Doug I had a question about Wi Fi. This year. So you said, we're going to be constrained because of this fab readiness is it possible to say how much I know youre guiding WP to 135 this year.
Timothy Arcuri: Thanks a lot. Doug, I had a question about WFE this year. So you said we're going to be constrained because of this fab, you know, readiness. Is it possible to say how much? I know you're guiding, you know, WFE to 135 this year. I mean, if we use semiconductor revenue, and you assume sort of a normal WFE and intensity number, it seems like you could get to, like, 150. So maybe the constraints are costing the industry, like, $15 billion. Is it possible to give a number in terms of how much the constraints are kind of costing in terms of, you know, WFE this year, so we can kind of pro forma that out?
Timothy Arcuri: Thanks a lot. Doug, I had a question about WFE this year. So you said we're going to be constrained because of this fab, you know, readiness. Is it possible to say how much? I know you're guiding, you know, WFE to 135 this year. I mean, if we use semiconductor revenue, and you assume sort of a normal WFE and intensity number, it seems like you could get to, like, 150. So maybe the constraints are costing the industry, like, $15 billion. Is it possible to give a number in terms of how much the constraints are kind of costing in terms of, you know, WFE this year, so we can kind of pro forma that out?
If we use semiconductor revenue and you assume sort of a normal <unk> and hence the number it seems like you could get to like 150. So maybe the constraints are costing the industry like $15 billion is it possible to give a number in terms of how much the constraints youre kind of costing in terms of WP. This year. So we can kind of pro forma that out.
Okay.
Yes, Tim I knew somebody was going to ask that question I should have anticipated. It was going to be you listen it's hard for us to put a number on it and I'm going to decline to do that as we sit here right now in the region <unk> plans are somewhat fluid. If we're honest, meaning people are trying to figure out how to get a little more clean room space.
Was to put a number on it and I'm going to decline to do that. As we sit here right now and the reason same as plans are are somewhat fluid. If, if we're honest, meaning people are trying to figure out how to get a little more clean room space, how to drink, facilities online and and bump things up a little bit. So I'm not we're not going to put a number on it but I think it's safe to say and and Tim can come in on this uh, as well. Yeah, I think it sets up for 27 to also be a pretty good year as we think through this. I mean, the industry seems to be sold out for most of what it's supplying and everybody's talking about these multi-year agreements that they're working on. And I think that's largely a reflection of the fact that demand is very strong and there's just not enough cleaner out there.
Douglas R. Bettinger: Yeah, Tim, I knew somebody was going to ask that question. I should have anticipated it was going to be you. Listen, it, it's hard for us to put a number on it, and I'm going to decline to do that as we sit here right now. And the reason, Tim, is plans are somewhat fluid, if we're honest, meaning people are trying to figure out how to get a little more clean room space, how to bring facilities online and bump things up a little bit. So I'm not, we're not going to put a number on it, but I think it's safe to say, and Tim can comment on this as well, you know, I think it sets up for 2027 to also be a pretty good year as we think through this.
Douglas Bettinger: Yeah, Tim, I knew somebody was going to ask that question. I should have anticipated it was going to be you. Listen, it, it's hard for us to put a number on it, and I'm going to decline to do that as we sit here right now. And the reason, Tim, is plans are somewhat fluid, if we're honest, meaning people are trying to figure out how to get a little more clean room space, how to bring facilities online and bump things up a little bit. So I'm not, we're not going to put a number on it, but I think it's safe to say, and Tim can comment on this as well, you know, I think it sets up for 2027 to also be a pretty good year as we think through this.
<unk> facilities online and bump things up a little bit so I'm not we're not going to put a number on it but I think it's safe to say and Tim can comment on this as well I think it sets up for 'twenty seven to also be a pretty good year as we think through this I mean, the industry seems to be sold out for most of what it supplying and every.
Tim other than to say, that clearly you've seen a large number of of Fab announcements. I mean, those are those Fab announcements are are are capacity in 27 28 uh, and Beyond. And so you know, I think there's a view that uh, you know, the constraints of this year are going to continue, uh, even even out until many of those new Fabs open up and so um,
Douglas R. Bettinger: I mean, the industry seems to be sold out for most of what it's supplying, and everybody's talking about these multiyear agreements that they're working on, and I think that's largely a reflection of the fact that demand is very strong, and there's just not enough clean room out there.
I mean, the industry seems to be sold out for most of what it's supplying, and everybody's talking about these multiyear agreements that they're working on, and I think that's largely a reflection of the fact that demand is very strong, and there's just not enough clean room out there.
I, I think we we've given you a view of what we think WFC is as Doug said. You know, we're working on productivity improvements to get a little extra output for customers, that's how we support them. But uh, fundamentally it's a it's a pretty big challenge.
But he is talking about these multi year agreements that they're working on and I think thats largely a reflection of the fact that demand is very strong and there's just not enough clean room up there.
Yes, I don't have much to add Tim other than to say that clearly <unk> seen a large number of fab announcements.
Timothy Archer: Yeah, I don't have much to add, Tim, other than to say that clearly, you've seen a large number of fab announcements. I mean, those are those fab announcements are for capacity in 2027 and 2028 and beyond. And so, you know, I think there's a view that, you know, the constraints this year are gonna continue, even out until many of those new fabs open up. And so, I think we've given you a view that we think WFE is. As Doug said, you know, we're working on productivity improvements to get a little extra output for customers. That's how we support them. But, fundamentally, it's a pretty big challenge.
Timothy Archer: Yeah, I don't have much to add, Tim, other than to say that clearly, you've seen a large number of fab announcements. I mean, those are those fab announcements are for capacity in 2027 and 2028 and beyond. And so, you know, I think there's a view that, you know, the constraints this year are gonna continue, even out until many of those new fabs open up. And so, I think we've given you a view that we think WFE is. As Doug said, you know, we're working on productivity improvements to get a little extra output for customers. That's how we support them. But, fundamentally, it's a pretty big challenge.
Thanks a lot Doug and then your guiding gross margin down a bit on up Revenue. Sounds like it's predominantly related to China. So China was 35% in December. Is it going to come down? Like, is that the reason why the ghost Market is coming down? And and if so, like what makes you think, China will be for March.
Are those fab announcements are for capacity in 27 28.
And beyond and so I think there's a view that.
The constraint this year, we're going to continue even out until many of those new Fabs open up so.
I think we've given you a view of what we think Wi Fi is as Doug said, we're working on productivity improvements and little extra outputs for customers. That's how we support them, but fundamentally it's a pretty big challenge.
Yeah, I'm not going to give you a hard number Tim, but yes. It's customer. Mix. Uh, it's going to be less rich in the March quarter and I'll also remind everybody that this isn't a fixed cost business for us. So as volume goes up and down, the, the component that just benefits from revenue growing is isn't that big the the mixed component of both product as well as customer is uh is the important item. So you your latched on to the right thing too.
Okay, thank you.
Yep, thank you.
Thanks, a lot Doug and then you're guiding gross margin down a bit on revenue. It sounds like it's predominantly related to China. So China was 35% in December is it going to come down like is that the reason why the gross margin is coming down and if so like what <unk> in China will be for March.
C.J. Muse: Thanks a lot. Doug, and then you're guiding gross margin down a bit on up revenue. Sounds like it's-
Timothy Arcuri: Thanks a lot. Doug, and then you're guiding gross margin down a bit on up revenue. Sounds like it's-
The next question comes from CJ, Muse with caner, fix Gerald, please go ahead.
Douglas R. Bettinger: Yeah.
Douglas Bettinger: Yeah.
C.J. Muse: Predominantly related to China. So China was 35% in December. Is it gonna come down? Like, is that the reason why the gross margin is coming down? And if so, like, what mix do you think China will be for March?
CJ Muse: Predominantly related to China. So China was 35% in December. Is it gonna come down? Like, is that the reason why the gross margin is coming down? And if so, like, what mix do you think China will be for March?
Yes, im not going to give you a hard number Tim but yes, its customer mix, it's going to be less rich in the March quarter, and I'll also remind everybody that this isn't a fixed cost business for us so as volume goes up and down the component that just.
Douglas R. Bettinger: Yeah, I'm not gonna give you a hard number, Tim, but yes, it's customer mix. It's gonna be less rich in the March quarter. And I'll also remind everybody that this isn't a fixed cost business for us. So as volume goes up and down, the component that just benefits from revenue growing isn't that big. The mix component of both product as well as customer is the important item. So you're latched onto the right thing, Tim.
Douglas Bettinger: Yeah, I'm not gonna give you a hard number, Tim, but yes, it's customer mix. It's gonna be less rich in the March quarter. And I'll also remind everybody that this isn't a fixed cost business for us. So as volume goes up and down, the component that just benefits from revenue growing isn't that big. The mix component of both product as well as customer is the important item. So you're latched onto the right thing, Tim.
Yeah, good afternoon. Thank you for taking the question, I guess to, to follow up on that. Last question. Um, Doug, could you speak a bit about, you know, the work you're doing with the supply chain? Uh, bringing on manufacturing, ramping Malaysian, and how we should think about that, uh, in the context of gross margins as revenues ramp in the second half of calendar. 26 and Beyond.
Benefits from revenue growing is isn't that big the mix component of both product as well as customer is is an important item. So youre latched onto the right thing Tim.
Okay. Thank you.
C.J. Muse: Okay, thank you.
Timothy Arcuri: Okay, thank you.
Yes. Thank you.
Douglas R. Bettinger: Yep, thank you.
Douglas Bettinger: Yep, thank you.
The next question comes from CJ Muse with Cantor Fitzgerald. Please go ahead.
Operator: The next question comes from C.J. Muse with Cantor Fitzgerald. Please go ahead.
Operator: The next question comes from CJ Muse with Cantor Fitzgerald. Please go ahead.
Yes. Good afternoon. Thank you for taking the question I guess to follow up on that last question.
Atif Malik: Yeah, good afternoon. Thank you for taking the question. I guess to follow up on that last question, Doug, could you speak a bit about, you know, the work you're doing with the supply chain, bringing on manufacturing, ramping Malaysia, and how we should think about that in the context of gross margins as revenues ramp in the second half of calendar 2026 and beyond?
CJ Muse: Yeah, good afternoon. Thank you for taking the question. I guess to follow up on that last question, Doug, could you speak a bit about, you know, the work you're doing with the supply chain, bringing on manufacturing, ramping Malaysia, and how we should think about that in the context of gross margins as revenues ramp in the second half of calendar 2026 and beyond?
Uh, yeah, it's true. I mean, we've been talking for a while. I think about capex, growing as a result of expanding manufacturing capability team. Specifically talk about a doubling over the last 4 or 5 years, so it's been an item that we've been clearly very focused on. Uh, we're ramping globally. Um, and you're right that Malaysia location is, uh, is our biggest location as we've seen here today and we're, we're trying to get more out of that. In addition to everywhere that we are
Could you speak a bit about the <unk>.
Work Youre doing with the supply chain, bringing on manufacturing ramping Malaysia, and how we should take about that in the context of gross margins as revenues ramp in the second half of calendar 'twenty six and beyond.
Um but the mix component uh CJ is going to be more important than anything, at least in the near term uh less than just volume ramping.
Yes C. J I mean, we've been talking for a while I think about capex growing as a result of expanding manufacturing capability, Tim specifically talked about a doubling over the last four or five years. So it's been an item that we've been clearly very focused on where we are.
Douglas R. Bettinger: Yeah, CJ, I mean, we've been talking for a while, I think, about CapEx growing as a result of expanding manufacturing capability. Tim specifically talked about it doubling over the last four or five years. So it's been an item that we've been clearly very focused on. We're ramping globally, and you're right, that Malaysia location is our biggest location as we sit here today, and we're trying to get more out of that in addition to everywhere that we are. But the mix component, CJ, is gonna be more important than anything, at least in the near term, less than just volume ramping.
Douglas Bettinger: Yeah, CJ, I mean, we've been talking for a while, I think, about CapEx growing as a result of expanding manufacturing capability. Tim specifically talked about it doubling over the last four or five years. So it's been an item that we've been clearly very focused on. We're ramping globally, and you're right, that Malaysia location is our biggest location as we sit here today, and we're trying to get more out of that in addition to everywhere that we are. But the mix component, CJ, is gonna be more important than anything, at least in the near term, less than just volume ramping.
Great, thanks so and then maybe, um, follow-up question on csbg. I would think your customers are trying to get every bit that they can out and so um the the uplift that you saw in the December quarter uh and I assume continue straight through to March, you know, is that something that will sustain throughout
<unk> globally, and you are right that Malaysia location as is our biggest location as we sit here today and we're trying to get more out of that in addition to everywhere we are.
The whole calendar year and should drive you know better than kind of that 12% growth kegger or does that take a pause at some point as uh to transition focuses on Greenfield Investments?
But the mixed component.
It's going to be more important than anything at least in the near term.
Less than just volume ramping.
Great. Thanks, and then maybe a follow up question.
Atif Malik: Great, thanks. And then maybe a follow-up question on CSPG. I would think your customers are trying to get every bit that they can out. And so the uplift that you saw in the December quarter, and I assume continued strength into March, you know, is that something that will sustain throughout the whole calendar year and should drive, you know, better than kind of that 12% growth CAGR, or does that take a pause at some point as the transition focuses on greenfield investments?
CJ Muse: Great, thanks. And then maybe a follow-up question on CSPG. I would think your customers are trying to get every bit that they can out. And so the uplift that you saw in the December quarter, and I assume continued strength into March, you know, is that something that will sustain throughout the whole calendar year and should drive, you know, better than kind of that 12% growth CAGR, or does that take a pause at some point as the transition focuses on greenfield investments?
On <unk> I would think your customers are trying to get every bit that they can and so the.
The uplift that you saw in the December quarter.
<unk> continued strengthen in March is that something that will sustain throughout the whole calendar year and should drive better than kind of that 12% growth CAGR or does that take a pause at some point.
To transition focuses on greenfield investments.
Yes C J.
Timothy Archer: Yeah, C.J., I'll let Doug speak to the specific numbers, but I think that what you should keep in mind is the CSPG. A lot of our growth, of course, is driven by customers' near-term actions and what we need to do to help them get maximum amount of output from the tools they have. But a lot of the growth really is we're transforming our service business to be much more oriented towards the use of equipment intelligence for predictive maintenance as a way of getting more output from tools, and also implementation of Dextro cobots for automated maintenance. And both of those things not only would drive top line growth, but also margin profitability improvement, just given the efficiency with which we deliver those services.
Timothy Archer: Yeah, CJ, I'll let Doug speak to the specific numbers, but I think that what you should keep in mind is the CSPG. A lot of our growth, of course, is driven by customers' near-term actions and what we need to do to help them get maximum amount of output from the tools they have. But a lot of the growth really is we're transforming our service business to be much more oriented towards the use of equipment intelligence for predictive maintenance as a way of getting more output from tools, and also implementation of Dextro cobots for automated maintenance. And both of those things not only would drive top line growth, but also margin profitability improvement, just given the efficiency with which we deliver those services.
Ill let.
Let Doug speak to the specific numbers, but I think that.
Yeah, CJ. I'll I'll let let Doug speak to the specific numbers but I think that uh what you should keep in mind, is the csbg, a lot of our growth, of course, is driven by customers near-term actions. And, and, and what we need to do to help them get maximum amount of output from the tools they have. But a lot of the growth really is, we're Transforming Our service business, uh, to be much more oriented towards the use of equipment intelligence for predictive maintenance, as a way of getting more output from tools and also implementation of, dextro cobots for our, uh, automated maintenance, and both of those things, uh, not only will drive Topline growth, but also, um, margin and profitability Improvement. Just given the efficiency with which we deliver those services. And so, I think there's a number of, uh, moving, uh, pieces that are all positive for csbg.
You should keep in mind that the <unk> one of our growth of course is driven by customers near term actions and what we need to do to help them get maximum amount of output from the tools. They have but a lot of the growth really is we're transforming our service business to.
To be much more oriented towards the use of equipment intelligence for predictive maintenance as a way of getting more output from tools and also implementation of dextro Cobalts for.
Yeah, and I would just add CJ, you know, we we we replace and see the chamber. Uh, account number off. Obviously, we knew that was coming and we're happy to share it with you. So that that's an aspect of what we're continue to take advantage of going forward. Uh, is very consistent though with what we articulated at that investor day back uh I guess almost a year ago. Um and so I would still want you thinking about cspg growing the same way. We described it back then which is kind of a high single digit, maybe low double.
Digit.
Automotive maintenance and both of those things not only will drive top line growth, but also.
<unk>.
Margin and profitability improvement just given the efficiency with which we deliver those services and so I think theres a number of moving pieces that are all positive for CSB.
Uh, we had a very strong December quarter, it was primarily result of, uh, Reliance systems. Uh, that piece might be a little bit. Lumpy, it always is, um, but again, csbg is just going to keep chugging along.
Timothy Archer: And so I think there's a number of moving pieces that are all positive for CSPG.
And so I think there's a number of moving pieces that are all positive for CSPG.
Thank you.
Thanks CJ.
Yes, I would just add we were pleased to see the chamber.
Douglas R. Bettinger: Yeah, and I would just add, CJ, you know, we were pleased to see the chamber count number up. Obviously, we knew that was coming, and we're happy to share it with you. So that, that's an aspect of what we're continuing to take advantage of going forward. It's very consistent, though, with what we articulated at that Investor Day back, I guess, almost a year ago. And so I would still want you thinking about CSPG growing the same way we described it back then, which is kind of high single digit, maybe low double digit. We had a very strong December quarter. It was primarily a result of Reliant systems. That piece might be a little bit lumpy. It always is. But again, CSPG is just gonna keep chugging along.
Douglas Bettinger: Yeah, and I would just add, CJ, you know, we were pleased to see the chamber count number up. Obviously, we knew that was coming, and we're happy to share it with you. So that, that's an aspect of what we're continuing to take advantage of going forward. It's very consistent, though, with what we articulated at that Investor Day back, I guess, almost a year ago. And so I would still want you thinking about CSPG growing the same way we described it back then, which is kind of high single digit, maybe low double digit. We had a very strong December quarter. It was primarily a result of Reliant systems. That piece might be a little bit lumpy. It always is. But again, CSPG is just gonna keep chugging along.
The next question comes from Atif Malik with City, please go ahead.
Account number up obviously, we knew that was coming and we're happy to share. It with you. So that some aspects of what we're continuing to take advantage of going forward is very consistent with what we articulated at that Investor day back I guess, almost a year ago.
So I would still want you thinking about CSP G growing the same way. We described it back then which is kind of high single digit maybe low double digit.
When you move to Forest Square, I know you called out a car and you're prepared remarks.
We had a very strong December quarter. It was primarily a result of.
Reliance systems.
That piece might be little bit lumpy. It always is.
But again <unk>, just going to keep chugging along.
Thank you.
Atif Malik: Thank you.
CJ Muse: Thank you.
Thanks C J.
Douglas R. Bettinger: Thanks, CJ.
Douglas Bettinger: Thanks, CJ.
The next question comes from <unk> Malik with Citi. Please go ahead.
Operator: The next question comes from Atif Malik with Citi. Please go ahead.
Operator: The next question comes from Atif Malik with Citi. Please go ahead.
Hi, Thank you for taking my questions. The first one for Tim Tim on the DRAM market. When do you see the volume adoption of <unk> square from 600 square can you talk about your Sam market share when you move to <unk> I know you called out of Colorado in your prepared remarks.
C.J. Muse: Hi, thank you for taking my question. The first one for Tim. Tim, on the DRAM market, when do you see the volume adoption of 4F squared from 6F squared? And can you talk about your SAM market share, when you move to 4F squared? I know you called out Acara in your prepared remarks.
Atif Malik: Hi, thank you for taking my question. The first one for Tim. Tim, on the DRAM market, when do you see the volume adoption of 4F squared from 6F squared? And can you talk about your SAM market share, when you move to 4F squared? I know you called out Acara in your prepared remarks.
Yeah, so I I think for a squared I mean obviously there's still some question, is the exact timing and you know, customers have talked about it being something towards the end of the decade. Probably full full volume production. But clearly we're engaged today with customers looking at the technical needs and, you know, we called out a car. A car is very well suited to the types of uh, of high aspect ratio, very small features that exist in 4f squared as well as you know, other other devices we talked about whether it's uh future date all around or or even uh Foundry logic moves to see if that. And so you know a car is a it's a
Yes, so I think for F. Squared I mean, obviously there is still some question as to exact timing and customers have talked about it being something towards the end of the decade, probably.
Timothy Archer: Yeah. So I, I think, 4F squared, I mean, obviously there's still some question as to exact timing, and, you know, customers have talked about it being something towards the end of the decade, probably for full volume production. But clearly, we're engaged today with customers looking at the technical needs. And, you know, we called out Acara. Acara is very well suited to the types of, of high aspect ratio, very small features that exist in 4F squared, as well as, you know, other, other devices we've talked about, whether it's, future gate-all-around or, or even as, Foundry logic moves to CFET. And so, you know, Acara is a, it's a, sort of a foundational tool for us in terms of capabilities that are gonna be important for all of these transitions.
Timothy Archer: Yeah. So I, I think, 4F squared, I mean, obviously there's still some question as to exact timing, and, you know, customers have talked about it being something towards the end of the decade, probably for full volume production. But clearly, we're engaged today with customers looking at the technical needs. And, you know, we called out Acara. Acara is very well suited to the types of, of high aspect ratio, very small features that exist in 4F squared, as well as, you know, other, other devices we've talked about, whether it's, future gate-all-around or, or even as, Foundry logic moves to CFET. And so, you know, Acara is a, it's a, sort of a foundational tool for us in terms of capabilities that are gonna be important for all of these transitions.
Sort of a foundational tool for us in terms of capabilities that are going to be important for all of these transitions. But you really should think about, you know, those kinds of Technology, transitions occurring after probably after this next, big wave of Fab openings. Um, but again back to the constraint question, you know, in some ways.
Full volume production, but clearly we're engaged today with customers looking at the technical needs and we called out of Cora <unk> is very well suited to the types of.
if this turns out to be, as we believe a multi-year buildout of Fabs,
High aspect ratio very small features that exist in four F squared as well as other other devices, we've talked about whether it's future gate all around or even is foundry logic moves to see that and so.
The Fabs that come towards the end of that, will be the Fabs that benefit from the Sam expansion and share game that we're going to see coming from these new products that we've talked about. So, um, anyway, I think for f squared is probably on the back end of that. But there's a lot in between that will also Drive our business.
<unk> is a it's a.
Sort of a foundational tool for us in terms of the capabilities that are going to be important for all of these transitions, but you really should think about those kinds of technology transitions occurring after probably after this next big wave of fab openings.
Timothy Archer: But you really should think about, you know, those kinds of technology transitions occurring after, probably after this next big wave of fab openings. But again, back to the constraint question, you know, in some ways, if this turns out to be, as we believe, a multiyear build-out of fabs, the fabs that come towards the end of that will be the fabs that benefit from the SAM expansion and share gain that we're gonna see coming from these new products that we've talked about. So, anyway, I think 4F² is probably on the back end of that, but there's a lot in between that will also drive our business.
But you really should think about, you know, those kinds of technology transitions occurring after, probably after this next big wave of fab openings. But again, back to the constraint question, you know, in some ways, if this turns out to be, as we believe, a multiyear build-out of fabs, the fabs that come towards the end of that will be the fabs that benefit from the SAM expansion and share gain that we're gonna see coming from these new products that we've talked about. So, anyway, I think 4F² is probably on the back end of that, but there's a lot in between that will also drive our business.
But again back to the constraint question.
Ways.
Great. And then Doug on the man Market. I know the memory Dynamics were in line with your expectations in the December quarter, but Nan was down, sequentially in, DM up. Uh, do, do you see the Nan makers slowing down technology migrations as they focus more on in terms of like, minting money given how uh the supply shortages are materializing. And when you see nand, uh, new capacitor Nations coming on,
If this turns out to be as we believe a multiyear build out fabs.
The fact that come towards the end of that will be the fabs the benefit from the Sam expansion and share gain that we're going to see coming from these new products that we've talked about so.
Anyway, I think four escalator is probably on the back end of that but there's a lot in between that will also drive our business.
Grid and then Doug on the NAND market I know the memory dynamics were in line with your expectations in the December quarter, but <unk> was down sequentially in DRAM.
Vivek Arya: ... Great. And then, Doug, on the NAND market, I know the memory dynamics were in line with your expectations in the December quarter, but NAND was down sequentially and DRAM up. Do you see the NAND makers slowing down technology migrations as they focus more on in terms of, like, minting money, given how the supply shortages are materializing? And when do you see NAND new capacity additions coming on?
Atif Malik: Great. And then, Doug, on the NAND market, I know the memory dynamics were in line with your expectations in the December quarter, but NAND was down sequentially and DRAM up. Do you see the NAND makers slowing down technology migrations as they focus more on in terms of, like, minting money, given how the supply shortages are materializing? And when do you see NAND new capacity additions coming on?
Do you see the NAND makers slowing down technology migrations as they focus more on in terms of like minting money and given.
The supply shortages.
Realizing and when you see NAND new capacity additions coming on.
Yes, Jeff no listen NAND played out exactly as we saw as the year began in 2025 and as we sit here looking into 2026, it will be a growth year for now there's no question about that in our minds I think what I observed the memory customer is doing at least to the extent that they have both NAND and DRAM right now anyway is prioritize.
Douglas R. Bettinger: Yeah, Atif, no, I, listen, NAND played out exactly as we saw it as the year began in 2025, and as we sit here looking in 2026, it'll be a growth year for NAND. There's no question about that in our minds. I think what I observe the memory customers doing, at least to the extent that they have both NAND and DRAM right now anyway, is prioritizing DRAM over NAND a little bit because profitability there is somewhat better. I think you all understand that and know that. But that doesn't mean that people aren't focused on NAND. In fact, one of our largest customers announced a new fab that's going to be dedicated, pretty, well, not dedicated, but heavily emphasizing NAND capacity. And so that's on the come line.
Douglas Bettinger: Yeah, Atif, no, I, listen, NAND played out exactly as we saw it as the year began in 2025, and as we sit here looking in 2026, it'll be a growth year for NAND. There's no question about that in our minds. I think what I observe the memory customers doing, at least to the extent that they have both NAND and DRAM right now anyway, is prioritizing DRAM over NAND a little bit because profitability there is somewhat better. I think you all understand that and know that. But that doesn't mean that people aren't focused on NAND. In fact, one of our largest customers announced a new fab that's going to be dedicated, pretty, well, not dedicated, but heavily emphasizing NAND capacity. And so that's on the come line.
Yeah, no, I listen. Uh, man played out exactly as we, uh, saw as the year began in 2025. And as we sit here looking in 2026, it'll be a growth year for now. And there's no question about that in our minds. I think what I observed the memory customer is doing at least to the extent that they have both man and dram right now. Anyway is prioritizing the ram over andand a little bit because profitability there are some better. I think y'all understand that and know that. Um but that doesn't mean that people aren't focused on land. In fact, 1 of our largest customers announced a new Fab that's going to be dedicated pretty well, I'm not dedicated but heavily, um, emphasizing man capacity. And so that's on the come line. We see that happening. Um, as we get into 26 growth, that is happening. Uh, we're still sticking by, we think upgrades happen, um, before real capacity additions. But you're going to, you're going to see a combination of both and that 40 billion that we've been talking about likely happens quicker, uh, than what we
Originally expected a year ago. So anyway, we we we feel quite good about where nand is trying to
Zing DRAM over NAND, a little bit because profitability, there somewhat better I think youll understand that know that.
thank you.
Thanks Adam.
But that doesn't mean that people aren't focused on NAND in fact, one of our largest customers announced a new fab that's going to be dedicated pretty all not dedicated but heavily.
The next question comes from the Vic Ira, with Bank of America Securities. Please go ahead.
Emphasizing NAND capacity.
So that's on the come line, we see that happening as we get into 'twenty six growth that is happening.
Douglas R. Bettinger: We see that happening, as we get into 2026, growth that is happening. We're still sticking by, we think upgrades happen before real capacity additions, but you're gonna, you're gonna see a combination of both. And that $40 billion that we've been talking about likely happens quicker than what we originally expected a year ago. So anyway, we feel quite good about where NAND is trending.
We see that happening, as we get into 2026, growth that is happening. We're still sticking by, we think upgrades happen before real capacity additions, but you're gonna, you're gonna see a combination of both. And that $40 billion that we've been talking about likely happens quicker than what we originally expected a year ago. So anyway, we feel quite good about where NAND is trending.
Still sticking by we think upgrades happening before real capacity additions, but youre going to youre going to see a combination of both in that $40 billion that we've been talking about likely happens quicker than what we originally expected a year ago. So anyway, we feel quite good about where NIM is trending.
Uh, thanks for taking my questions. Um, so you're guiding WFC up. 23%, I think last year you said you gained a point of share. Uh, do you expect to maintain or gain, share this CRT and what, what are kind of puts and takes, um, around the different markets? And then specifically, what are you assuming for China? Uh, contribution, uh, overall for WFC and what that means for lamb in calendar, 26,
Thank you.
Vivek Arya: Thank you.
Atif Malik: Thank you.
Thanks, Adam.
Douglas R. Bettinger: Thanks, Arif.
Douglas Bettinger: Thanks, Arif.
The next question comes from Vivek IRA with Banc of America Securities. Please go ahead.
Operator: The next question comes from Vivek Arya with Bank of America Securities. Please go ahead.
Operator: The next question comes from Vivek Arya with Bank of America Securities. Please go ahead.
Thanks for taking my questions.
Srinivas Pajjuri: Thanks for taking my questions. So you're guiding WFE up 23%. I think last year you said you gained a point of share. Do you expect to maintain or gain share this year, Tim? What, what are kind of the puts and takes around the different markets? And then specifically, what are you assuming for China contribution overall for WFE and what that means for Lam in calendar 2026?
Vivek Arya: Thanks for taking my questions. So you're guiding WFE up 23%. I think last year you said you gained a point of share. Do you expect to maintain or gain share this year, Tim? What, what are kind of the puts and takes around the different markets? And then specifically, what are you assuming for China contribution overall for WFE and what that means for Lam in calendar 2026?
Dining WMC up 23% I think last quarter. You said you gained a point of share do you expect to maintain or gain share. This year and what are kind of the puts and takes.
Around the different markets and then specifically what are you assuming for China.
Contribution overall for Wi Fi and what that means for Lam in calendar 2006.
Yes, let me let me take the first part of it.
Yeah, let me, let me take the first part of it. I mean, I think what's important to remember from the the longer term plan. We laid out at last year's investor day and things. I said on the call today, we expect to gain share and expand our Sam at every successive technology node. And so, to your point, do we plan to just sustain or or increase? Share the answer is we we plan to increase our share of wfp again this year. And What needs to take place is uh, technology transitions. Need to keep our current and what we're seeing in the environment today is uh those are accelerating. That's a way for customers to get more output uh and and more output of the types of devices that are strongly demanded by the AI environment. Um at the same time those technology transitions are driving higher deposition and etch intensity which is
Timothy Archer: Yeah, let me, let me take the first part of it. I mean, I think what's important to remember from the, the longer-term plan we laid out at last year's Investor Day and things I said on the call today, we expect to gain share and expand our SAM at every successive technology node. And so to your point, do we plan to, to sustain or, or increase share? The answer is we, we plan to increase our share of WFE again this year. And what needs to take place is, technology transitions need to keep occurring, and what we're seeing in the environment today is, those are accelerating. That's a way for customers to get more output, and, and more output of the types of devices that are strongly demanded by the AI environment.
Timothy Archer: Yeah, let me, let me take the first part of it. I mean, I think what's important to remember from the, the longer-term plan we laid out at last year's Investor Day and things I said on the call today, we expect to gain share and expand our SAM at every successive technology node. And so to your point, do we plan to, to sustain or, or increase share? The answer is we, we plan to increase our share of WFE again this year. And what needs to take place is, technology transitions need to keep occurring, and what we're seeing in the environment today is, those are accelerating. That's a way for customers to get more output, and, and more output of the types of devices that are strongly demanded by the AI environment.
I think what's important to remember from the longer term plan, we laid out at last year's Investor Day, and things I said on the call today, we expect to gain share and expand our Sam if every successive technology node and so to your point, if we blend due to sustained or increased share of the answer is we plan to increase our share of there'll be a fee again.
This year.
And what needs to take place is technology transition needs to keep occurring and what we're seeing in the environment today is.
Those are accelerating.
Is pretty much our entire business. And so, um, from that perspective, uh, that's a real positive for us. And then we've talked about the success of our new products. I mean, we have, we have refreshed our conductor at uh product line. Uh, we've previously a refreshed, our dielectric, uh, Edge line. We've launched, Molly dry resistance is gaining traction, we're strong in advanced packaging. Um, backside power is still to come and it's going to be a driver for us and so I think we have confidence that whatever the WFC is
Way for customers to get more output and more output of the types of devices that are strongly demanded by the AI environment at.
Looks like it will be you will continue to expand. Sam green gain the share of the fee.
Timothy Archer: At the same time, those technology transitions are driving higher deposition and etch intensity, which is pretty much our entire business. And so, from that perspective, that's a real positive for us. And then we've talked about the success of our new products. I mean, we have refreshed our conductor etch product line. We've previously refreshed our dielectric etch line. We've launched Moly. Dry-resist is gaining traction. We're strong in advanced packaging. Backside power is still to come, and it's going to be a driver for us. And so I think we have confidence that whatever the WFE is, if it's technology-driven, as it looks like it will be, we will continue to expand SAM, gain share of WFE.
At the same time, those technology transitions are driving higher deposition and etch intensity, which is pretty much our entire business and so.
At the same time, those technology transitions are driving higher deposition and etch intensity, which is pretty much our entire business. And so, from that perspective, that's a real positive for us. And then we've talked about the success of our new products. I mean, we have refreshed our conductor etch product line. We've previously refreshed our dielectric etch line. We've launched Moly. Dry-resist is gaining traction. We're strong in advanced packaging. Backside power is still to come, and it's going to be a driver for us. And so I think we have confidence that whatever the WFE is, if it's technology-driven, as it looks like it will be, we will continue to expand SAM, gain share of WFE.
From that perspective, that's a real positive for us.
Now, as far as China goes, um, I think that we are uh uh looking at China being a more kind of flattish year on year. And therefore, as the rest of the technology driven, part of the business grows, becoming a smaller percentage of our, uh, overall Revenue.
We've talked about the success of our new products.
We have refreshed our conductor etch product line.
<unk> refreshed our dielectric etch line is launched Molly drive resistance is gaining traction we're strong in advanced packaging.
Backside power is still to come and it's going to be a driver for us and so I think we have confidence that whatever the Wi Fi is.
If it's technology driven as it looks like it will be we will continue to expand Sam creating gaining share now.
Now as far as China goes.
Timothy Archer: Now, as far as China goes, I think that we are looking at China being a more kind of flattish year-on-year, and therefore, as the rest of the technology-driven part of the business grows, becoming a smaller percentage of our overall revenue.
Now, as far as China goes, I think that we are looking at China being a more kind of flattish year-on-year, and therefore, as the rest of the technology-driven part of the business grows, becoming a smaller percentage of our overall revenue.
Think that we are.
Looking at China, being more kind of flattish year on year, and therefore as the rest of the technology driven part of the business grows becoming a smaller percentage of our overall revenue.
Got it.
Srinivas Pajjuri: Got it. And for my follow-up, I think in the past, you have given this $40 billion or so addressable opportunity to upgrade the installed base to higher layer counts. I'm curious, where are we now at, you know, versus that $40 billion number? How much more to go? And given this emerging role of NAND, or this enhanced role of NAND, I should say, in AI inference, is there a new number versus that $40 billion number that you had before? Thank you.
Vivek Arya: Got it. And for my follow-up, I think in the past, you have given this $40 billion or so addressable opportunity to upgrade the installed base to higher layer counts. I'm curious, where are we now at, you know, versus that $40 billion number? How much more to go? And given this emerging role of NAND, or this enhanced role of NAND, I should say, in AI inference, is there a new number versus that $40 billion number that you had before? Thank you.
My follow up I think in the past you have given this 40 billion or so.
Addressable opportunity to upgrade the installed base to higher layer counts.
Got it. And from my follow up um I think in the past you have given this 40 billion or or so um addressable opportunity to uh, upgrade the installed base uh, to higher layer counts. I'm curious. Where are we? Uh, now at uh, you know, versus at 40 billion number how much more to go and and given this, um, emerging role of man, or this enhanced role of, man, I should say in AI, inference. Uh, is there a new number versus that 40 billion number that you have before? Thank you. Yeah, I think we might wait until a little later in the year to refresh that number. But, uh, you know, we've said a few times now, um, the specific we're wording. We use the investor day was, uh, 40 billion over several years. Um, we've now I think almost every, uh, earnings call said. That seems to be happening faster than expected. And today, uh, I reiterated that, which was, you know, nand is moving faster than we expected, um, on the, uh, the upgrade path and I think we'll, we'll, we'll come out and look.
Where are we now at.
Versus that 40 billion number how much more to go and given this.
<unk> role of NAND or does enhance ROE of nine I should say and AI inference is that a new number versus that $40 billion number that you had before thank you.
Timothy Archer: Yeah, I think we might wait until a little later in the year to refresh that number. But, you know, we've said a few times now, the specific wording we used at Investor Day was, $40 billion over several years. We've now, I think, on almost every, earnings call, said that seems to be happening faster than expected. And today, I reiterated that, which was, you know, NAND is moving faster than we expected, on the upgrade path. And I think we'll come out and look. As Doug just mentioned, we're starting to see, you know, more interest in investing in NAND capacity, but it trades off. I mean, when you have clean room space, everybody has to make a decision as to where to use that today.
Timothy Archer: Yeah, I think we might wait until a little later in the year to refresh that number. But, you know, we've said a few times now, the specific wording we used at Investor Day was, $40 billion over several years. We've now, I think, on almost every, earnings call, said that seems to be happening faster than expected. And today, I reiterated that, which was, you know, NAND is moving faster than we expected, on the upgrade path. And I think we'll come out and look. As Doug just mentioned, we're starting to see, you know, more interest in investing in NAND capacity, but it trades off. I mean, when you have clean room space, everybody has to make a decision as to where to use that today.
We might wait until little later in the year to refresh that number but we've said a few times now the.
The specific wording, we used at Investor day was.
<unk> $40 billion over several years.
We've now I think almost every.
Has done just mentioned. We're starting to see, you know, more interested in investing in Mann capacity but it trades off. I mean, when you have clean room space, everybody has to make a decision as far to use that today. But I think that as we move forward and we see the growth from AI inference, and other use cases, and it's going to take its place in the AI data, infrastructure and memory infrastructure, and I think you'll see, uh, See growth there. And so, um, we're just executing through the customer demand today faster than the previous expected and, and anticipate more to come.
Earnings call said that seems to be happening faster than expected and today.
Thank you, d.
Thanks David.
Reiterated that which was.
NAND is moving faster than we expected.
On the upgrade path and I think we'll come out and look and as Doug just mentioned, you're starting to see more interested investing in NAND capacity, but it trades off I mean, when you have clean room space everybody has to make a decision is clear to us that today.
The next question comes from cerini Pourri. With RBC Capital, please go ahead.
Timothy Archer: But I think that as we move forward and we see the growth from AI inference and other use cases, NAND is going to take its place in the AI data infrastructure and memory infrastructure, and I think you'll see growth there. So, we're just executing to the customer demand today faster than we had previously expected and anticipate more to come.
But I think that as we move forward and we see the growth from AI inference and other use cases, NAND is going to take its place in the AI data infrastructure and memory infrastructure, and I think you'll see growth there. So, we're just executing to the customer demand today faster than we had previously expected and anticipate more to come.
I think that as we move forward and we see the growth from AI inference, and other use cases, and it's going to take its place in the AI.
Data infrastructure and memory infrastructure, and I think you'll see some growth there so.
We're just executing to the customer demand today faster than the previous expected and anticipate more to come.
Okay.
Thank you, Tim. Um, I want to go back to the previous question. Um, the the 1 point of WF is shared that you gained maybe uh, if you could help us, understand if it is coming primarily from in in Foundry on logic or if you're seeing that across the board because family, and logic is where you, I think made the most progress, uh, in the last couple of years. And then, you know, Doug said, you expect, uh, year-on-year growth to be meaningful this year, just in a given year, um, WFA expectation for 22% growth, uh, should I? I mean, I guess should be model 22% plus growth on the top line for the year.
Srinivas Pajjuri: Thank you, Tim.
Srini Pajjuri: Thank you, Tim.
Thanks Vivek.
Douglas R. Bettinger: Thanks, Vivek.
Douglas Bettinger: Thanks, Vivek.
The next question comes from screening jewelry with RBC capital. Please go ahead.
Operator: The next question comes from Srini Pajjuri with RBC Capital. Please go ahead.
Operator: The next question comes from Srini Pajjuri with RBC Capital. Please go ahead.
Thank you Tim I wanted to go back to the previous question.
Vivek Arya: Thank you. Tim, I want to go back to the previous question. The 1 point of WFE share that you gained, maybe, if you could help us understand if it is coming primarily from, in, foundry and logic, or if you're seeing that across the board, because, foundry and logic is where you, I think, made the most progress, in the last couple of years. And then, you know, Doug said you expect, year-on-year growth to be meaningful this year. Just, you know, given your, WFE expectation for 22% growth, should I-- I guess, should we model 22% plus growth on the top line for the year?
Srini Pajjuri: Thank you. Tim, I want to go back to the previous question. The 1 point of WFE share that you gained, maybe, if you could help us understand if it is coming primarily from, in, foundry and logic, or if you're seeing that across the board, because, foundry and logic is where you, I think, made the most progress, in the last couple of years. And then, you know, Doug said you expect, year-on-year growth to be meaningful this year. Just, you know, given your, WFE expectation for 22% growth, should I-- I guess, should we model 22% plus growth on the top line for the year?
The one point of <unk> per share that you gain maybe if you could help us understand if it is coming primarily in foundry and logic or if youre seeing that across the board because.
Foundry and logic, because I think made the most progress in the last couple of years and then.
Doug said, you expect year on year growth to be meaningful this year just in a given your.
Your expectation for 22% growth should I guess should we model, 22% plus growth on the topline for the year.
Timothy Archer: ...Yeah, so let me take the first one. The share gains came from a combination of both NAND and foundry logic. And again, it's, you know, you might think already we have very high share in NAND, but as technology transition occurs and layer count increases, we have an opportunity still to gain share of some of the new applications required to enable those higher layer counts, and so, we gain share in NAND. But a lot of our focus, we've talked about, over the last, number of years, has been to launch products that allow us to gain share at the Gate-All-Around nodes, more advanced foundry logic and, and the transitions that are coming there, and also in advanced DRAM.
Yes, So let me take the first one.
Timothy Archer: Yeah, so let me take the first one. The share gains came from a combination of both NAND and foundry logic. And again, it's, you know, you might think already we have very high share in NAND, but as technology transition occurs and layer count increases, we have an opportunity still to gain share of some of the new applications required to enable those higher layer counts, and so, we gain share in NAND. But a lot of our focus, we've talked about, over the last, number of years, has been to launch products that allow us to gain share at the Gate-All-Around nodes, more advanced foundry logic and, and the transitions that are coming there, and also in advanced DRAM.
Share gains came from a combination of both NAND and foundry logic and again it's.
Um, yeah, so let me take the first 1, the the uh share gains came from a combination of both manned and Foundry logic. And again, it's uh, you know, you might think already we have very high share in the end. But as technology, transition occurs, and layer, count increases, we have an opportunity to build a gain share of, some of the new applications required to, uh, enable those higher layer counts. And so, um, again sharing them. But a lot of our Focus we've talked about, uh, over the last number of years has been to launch products that allow us to gain share at the gate all around nodes. Um, more advanced Foundry, logic and and the transitions that are coming there and also in advanced dramm, uh, we saw this year, uh, some of those Foundry logic, uh, share games coming through, um, in the numbers that you can see. So I'd say those primarily nand, and, uh, and Foundry logic this year and then, uh, sorry the second question, can you just repeat the second question?
And I think already we have very high share in NAND, but as technology transition occurs in layer count increases we have an opportunity to gain share of some of the new applications required to.
Well, this is a second question.
Enable those higher layer counts and so we gained share in NAND, but a lot of our focus we've talked about.
Yeah. So I guess my my second second question was about, you know, you your expectation for the current year, I know you said oh it's going to be second half waited. Yeah, sorry.
Over the last number of years has been to launch products that allow us to gain share at the gate all around nodes.
More advanced foundry and logic and the transitions that are coming there and also in advanced DRAM. We saw this year some of those Tommy logic share.
Yeah no no we uh you know your your comment was basically will. We outperform the wfp that we just uh talked about? I guess that's that's the message you're trying to deliver is we're going to we're going to expand, Sam gainshare and we're going to outperform. There'll be a feed this year as our current View.
Timothy Archer: We saw this year, some of those foundry logic share gains coming through, in the numbers that you can see. So I'd say those, primarily NAND and foundry logic this year. And then, sorry, the second question, can you just repeat the second question?
We saw this year, some of those foundry logic share gains coming through, in the numbers that you can see. So I'd say those, primarily NAND and foundry logic this year. And then, sorry, the second question, can you just repeat the second question?
Share gains coming through in the numbers that you've seen so I'd say those primarily NAND.
In foundry logic this year.
Then.
Sorry. The second question can you just repeat the second question.
Okay.
Joe Moore: What was the second question, Srini?
What was the second question, Srini?
What was the second question was saying.
Yes.
Vivek Arya: Yeah. So I guess my second question was about, you know, your expectation for the current year. I know you said-
Srini Pajjuri: Yeah. So I guess my second question was about, you know, your expectation for the current year. I know you said
My second question was about your expectation for the current year I know you said, it's going to be second half weighted.
Timothy Archer: Oh, got it.
Timothy Archer: Oh, got it.
Vivek Arya: It's going to be second half weighted. Yeah.
Vivek Arya: It's going to be second half weighted. Yeah.
Yes.
Yes.
Okay, got it. Thanks for that. And then 1 1 quickly on the op margin, um, Doug, I think at the analyst day, you know, you gave us a guidance for, um, 304 to 35 at roughly 25 to 27 billion. And, uh, you're always there. I think you're you're, you know, at around 23 billion, run rate. Um, if I look at your March guidance. So I guess my question is, as we go through the next few quarters, um, you know, how should we think about the, you know, off margin falls through? I know you're guiding Opex a little bit, uh, little bit of growth here, but just want to understand how you should model Opex going forward.
Timothy Archer: Yeah. No, no, we, you know, your, your comment was basically, will we outperform the WFE that we just talked about?
Timothy Archer: Yeah. No, no, we, you know, your, your comment was basically, will we outperform the WFE that we just talked about?
Your comment was basically where we outperformed the wip that we just talked about I guess.
Vivek Arya: Yeah.
Srini Pajjuri: Yeah.
Timothy Archer: I guess that's the message we're trying to deliver is we're gonna expand SAM, gain share, and we're gonna outperform WFE this year, is our current view.
Timothy Archer: I guess that's the message we're trying to deliver is we're gonna expand SAM, gain share, and we're gonna outperform WFE this year, is our current view.
That's the message we're trying to deliver is we're going to we're going to expand Sam gained share and we're going to outperform there'll be a fee. This year is our current view.
Okay got it thanks for that and then one quickly on the op margin.
Vivek Arya: Okay, got it. Thanks for that. Then one quickly on the op margin. Doug, I think at the Analyst Day, you know, you gave us the guidance for 34 to 35 at roughly-
Srini Pajjuri: Okay, got it. Thanks for that. Then one quickly on the op margin. Doug, I think at the Analyst Day, you know, you gave us the guidance for 34 to 35 at roughly.
Doug I think at the Analyst day, you gave us the guidance for 34% to 35 at roughly 25% to $27 billion and Youre already there I think your.
We're run rating at least on a percentage basis, what the model suggests, we're going to be able to do, you know, ra and I and Tim were debating a little bit. We we probably later in the year need to come out and give you an update on that model and I think we'll do that.
Timothy Archer: Yep
Douglas Bettinger: Yep
Vivek Arya: -$25 to 27 billion, and, you're already there. I think you're, you know, around $23 billion run rate, if I look at your March guidance. So I guess my question is, as we go through the next few quarters, you know, how should we think about the, you know, op margin fall through? I know you're guiding OpEx a little bit, a little bit of growth here, but just wanna understand how we should model OpEx going forward.
Vivek Arya: $25 to 27 billion, and, you're already there. I think you're, you know, around $23 billion run rate, if I look at your March guidance. So I guess my question is, as we go through the next few quarters, you know, how should we think about the, you know, op margin fall through? I know you're guiding OpEx a little bit, a little bit of growth here, but just wanna understand how we should model OpEx going forward.
And on $23 billion run rate if I look at your March guidance. So I guess my question is as we go through the next few quarters.
How should we think about op margin fall through I know youre guiding opex a little bit.
Growth here, but just want to understand how we should model opex going forward.
Um, lots have changed in the last year or so, so, uh, stay tuned for that. Um, I think, as we think about this year, frankly, this is a management team that Prides itself on being able to, to deliver leverage, uh, through to the bottom line. Uh, we really did a great job with it last year, which is why I went through all the kind of
Thanks for the question, Yes, no we're pretty pleased with how we've performed clearly we're ahead of the model that model.
Douglas R. Bettinger: Yeah, Srini, thanks for the question. Yeah, no, we're pretty pleased with how we've performed. Clearly, we're ahead of the model, right? I mean, that model had, you know, it was 28 kind of model, and we're run rating, at least on a percentage basis, what the model suggests we're gonna be able to do. You know, Ram and I and Tim were debating a little bit. We probably later in the year need to come out and give you an update on that model, and I think we'll do that. Lots have changed in the last year or so, so stay tuned for that. I think as we think about this year, frankly, this is a management team that prides itself on being able to deliver leverage through to the bottom line.
Douglas Bettinger: Yeah, Srini, thanks for the question. Yeah, no, we're pretty pleased with how we've performed. Clearly, we're ahead of the model, right? I mean, that model had, you know, it was 28 kind of model, and we're run rating, at least on a percentage basis, what the model suggests we're gonna be able to do. You know, Ram and I and Tim were debating a little bit. We probably later in the year need to come out and give you an update on that model, and I think we'll do that. Lots have changed in the last year or so, so stay tuned for that. I think as we think about this year, frankly, this is a management team that prides itself on being able to deliver leverage through to the bottom line.
28 kind of model.
Uh demonstration of what we did last year. Uh we we will be focused on delivering leverage as we go through this year as well. And like I said, we we'll give you an update to that longer term model, probably later in the year.
We're run rating at least on a percentage basis, what the model suggests we're going to be able to do in <unk> and Tim We're debating a little bit we probably later in the year need to come out and give you an update on that model and I think we'll do that.
Thanks. Bye.
Thanks rainy.
The next question comes from Jim Schneider, with Goldman Sachs, please go ahead.
What's changed in the last year or so so stay tuned for that.
I think as we think about this year frankly this is a management team that prides itself on being able to deliver leverage through to the bottom line. We really did a great job with that last year, which is why I went through all the kind of.
Douglas R. Bettinger: We really did a great job with it last year, which is why I went through all the kind of demonstration of what we did last year. We will be focused on delivering leverage as we go through this year as well. And, like I said, we'll give you an update to that longer term model probably later in the year.
We really did a great job with it last year, which is why I went through all the kind of demonstration of what we did last year. We will be focused on delivering leverage as we go through this year as well. And, like I said, we'll give you an update to that longer term model probably later in the year.
Demonstration of what we did last year, we will be focused on delivering leverage as we go through this year as well and like I said, we'll give you an update to that longer term model probably later in the year.
Good afternoon. Thanks for taking my question in a relative to your prior comments on nand. Um understand there's a little bit more prioritization toward DM right now. But when do you expect that your customers are going to sort of pivot from nand upgrades, to more Greenfield nand, uh, capacity additions we saw some announcements from at least 1 of your customers recently on that. So I'm curious about uh, you know, when you expect to sort of see that upgrade business turned into Greenfield business, could that be by you know, before the end of 2026 or is it more of a 20?
27 event or maybe even later. Thank you.
Thanks Mark.
Vivek Arya: Thanks, Doug.
Vivek Arya: Thanks, Doug.
Thanks, Rick.
Douglas R. Bettinger: Thanks, Srini.
Douglas Bettinger: Thanks, Srini.
The next question comes from Jim Schneider with Goldman Sachs. Please go ahead.
Operator: The next question comes from Jim Schneider with Goldman Sachs. Please go ahead.
Operator: The next question comes from Jim Schneider with Goldman Sachs. Please go ahead.
Good afternoon, and thanks for taking my question.
Joe Moore: Good afternoon. Thanks for taking my question. You know, relative to your prior comments on NAND, understand there's a little bit more prioritization toward DRAM right now, but when do you expect that your customers are gonna sort of pivot from NAND upgrades to more greenfield NAND, capacity additions? We saw some announcements from at least one of your customers recently on that. So I'm curious about, when you expect to sort of see that upgrade business turn into greenfield business. Could that be by, you know, before the end of 2026, or is it more of a 2027 event, or maybe even later? Thank you.
Jim Schneider: Good afternoon. Thanks for taking my question. You know, relative to your prior comments on NAND, understand there's a little bit more prioritization toward DRAM right now, but when do you expect that your customers are gonna sort of pivot from NAND upgrades to more greenfield NAND, capacity additions? We saw some announcements from at least one of your customers recently on that. So I'm curious about, when you expect to sort of see that upgrade business turn into greenfield business. Could that be by, you know, before the end of 2026, or is it more of a 2027 event, or maybe even later? Thank you.
You have to your prior comments on NAND understand there is a little more prioritization towards DRAM right now, but when do you expect that your customers are going to sort of pivot from NAND upgrades to more greenfield NAND.
Yeah, it's a great question. I think that uh, what we're the way we do it right now is that because of the clean room space constraints. It's probably Again, part of that multi-year buildout 2728 when when clean room space is sufficiently available such that they can invest. Uh, um,
Passive conditions, we saw some announcements from at least one of your customers recently on that I'm curious about when you expect to sort of see that upgrade business turned into greenfield business could that be by before the end of 2026 or is it more of a 2020 sort of event or maybe even later thank you.
Yes, it's a great question I think that.
Timothy Archer: Yeah, it's a great question. I think that what we're -- the way we view it right now is that because of the clean room space constraints, it's probably, again, part of that multiyear build-out, 2027, 2028, when clean room space is sufficiently available such that they can invest in additional NAND capacity in a big way. So that's probably our view right now. In the meantime, we've talked about the acceleration of the technology transitions. You do get, you know, big growth. You get more capacity of the higher performing bits that are in strong demand of AI. And so I think that those are the decisions that people are making today, is move ahead as quickly as possible with many of the key technology transitions.
Timothy Archer: Yeah, it's a great question. I think that what we're -- the way we view it right now is that because of the clean room space constraints, it's probably, again, part of that multiyear build-out, 2027, 2028, when clean room space is sufficiently available such that they can invest in additional NAND capacity in a big way. So that's probably our view right now. In the meantime, we've talked about the acceleration of the technology transitions. You do get, you know, big growth. You get more capacity of the higher performing bits that are in strong demand of AI. And so I think that those are the decisions that people are making today, is move ahead as quickly as possible with many of the key technology transitions.
The way we view right now is that because of the clean room space constraints, it's probably again part of that multiyear Buildout 27 28.
In additional man capacity in a big way. So that's, uh, um, that's probably our view right now. In the meantime, I we talked about the acceleration of the technology transitions. You do get, you know, bit growth. You get uh, um more capacity of the higher performing bits that are in in strong, demanded Ai. And so, I think that those are the decisions, um, that that people making today is move ahead as quickly as possible with many of the key technology Transitions. And so, we're busy doing upgrades and, and that's, uh, that's where our focus is right now. But Greenfield will come eventually and you've seen some of those initial announcements. And I think that's encouraging for all of us.
When clean room space is sufficiently available such that they can invest.
Additional NAND capacity in a big way so thats.
That's probably our view right now in the meantime, we've talked about the acceleration of the technology transitions you do get big growth you get.
More capacity of the higher performing bits that are in strong demand in AI and so I think that those are the decisions.
It's very clear. Thanks. And then maybe just as a follow on, I think we all can see the trends uh, by Foundry dramm and then they're in play right now. Um and and in terms of level of growth rate, but as we head into 2027 or the end of 2026, do you see, you know the potential rank order of those growth rates or changing amongst those categories?
That people are making today as move ahead as quickly as possible with many of the key technology transitions and so we are busy doing upgrades and that's that's where our focus is right now at Greenfield will come eventually and you've seen some of those initial announcements and I think thats encouraging for all of us.
Timothy Archer: And so we're busy doing upgrades, and that's where our focus is right now. But greenfield will come eventually, and you've seen some of those initial announcements, and I think that's encouraging for all of us.
And so we're busy doing upgrades, and that's where our focus is right now. But greenfield will come eventually, and you've seen some of those initial announcements, and I think that's encouraging for all of us.
That's very clear thanks, and then maybe just as a follow on I think we all can see the trends by foundry DRAM and NAND there in play right now.
Joe Moore: That's very clear. Thanks. And then maybe just as a follow-on, I think we all can see the trends by foundry, DRAM, and NAND that are in play right now, in terms of the level of growth rate. But as we head into 2027 or the end of 2026, do you see, you know, the potential rank order of those growth rates sort of changing amongst those categories?
Jim Schneider: That's very clear. Thanks. And then maybe just as a follow-on, I think we all can see the trends by foundry, DRAM, and NAND that are in play right now, in terms of the level of growth rate. But as we head into 2027 or the end of 2026, do you see, you know, the potential rank order of those growth rates sort of changing amongst those categories?
Oh man. Jim, that's a great question. Going into 27? We we just for the first time give you a 26 number you, you're asking 27, listen in 26, we're very confident, everything is growing, its unequivocal. Um, we're also very clear when we look everything is constrained frankly, right? You're hearing it from every 1 of our customers. When they talk about things and they're, they're talking about these multi-year agreements to kind of
Deliver the visibility into next year.
And in terms of level of growth rate, but as we head into 2027 or at the end of 2026 do you see.
The potential rank order of those growth rates sort of changing amongst those categories.
Oh man, Jim that's a great question garnered towards seven we just for the first I'll give you a 26 number here.
Douglas R. Bettinger: Oh, man, Jim, that's a great question, going into 2027. We just for the first time gave you a 2026 number. You're, you're asking 2027. Listen, in 2026, we're very confident everything is growing. It's unequivocal. And we're also very clear when we look; everything is constrained, frankly, right? You're hearing it from every one of our customers when they talk about things, and they're talking about these multiyear agreements to kind of deliver the visibility into next year. Foundry and logic has grown a lot this year. DRAM's grown a lot this year. NAND has grown a little bit less, but still growing pretty well this year.
Douglas Bettinger: Oh, man, Jim, that's a great question, going into 2027. We just for the first time gave you a 2026 number. You're, you're asking 2027. Listen, in 2026, we're very confident everything is growing. It's unequivocal. And we're also very clear when we look; everything is constrained, frankly, right? You're hearing it from every one of our customers when they talk about things, and they're talking about these multiyear agreements to kind of deliver the visibility into next year. Foundry and logic has grown a lot this year. DRAM's grown a lot this year. NAND has grown a little bit less, but still growing pretty well this year.
Asking 47.
Listen in 'twenty six we're very confident everything is growing.
Um, founder and logic has grown a lot this year. Do you remember growing a lot this year and just growing a little bit less, but still growing pretty. Well this year, at the end of the day, though, when you look at these system architectures, all this stuff needs to fit together and you saw 1 of the big accelerator. Uh guys talking about this at CES like hey, you know, the we need this Nan stuff showing up it, that's happening. Uh, clearly. So um into 27 I think we're going to see another year where everything is growing. I'm not ready to rank order at uh quite yet. Jim though,
It's unequivocal and we're also very clear when we look everything is constrained frankly right. You are hearing it from every one of our customers when they talk about things and Theyre talking about these multiyear agreements to cutting.
I think, as we move through this year, though, we uh, we already, you know, I would say uh,
Deliver the visibility into next year.
Foundry and logic is growing a lot. This year DRAM has grown a lot. This year now it has grown a little bit less but still growing pretty well. This year at the end of the day, though when you look at the system architectures all of this stuff needs to fit together and you saw one of the big accelerator.
Douglas R. Bettinger: At the end of the day, though, when you look at these system architectures, all this stuff needs to fit together, and you saw one of the big accelerator guys talking about this at CES. Like: Hey, you know, the-- we need this NAND stuff showing up. It-- That's happening, clearly. So, into 2027, I think we're gonna see another year where everything is growing. I'm not ready to rank order it, quite yet, Jim, though.
At the end of the day, though, when you look at these system architectures, all this stuff needs to fit together, and you saw one of the big accelerator guys talking about this at CES. Like: Hey, you know, the-- we need this NAND stuff showing up. It-- That's happening, clearly. So, into 2027, I think we're gonna see another year where everything is growing. I'm not ready to rank order it, quite yet, Jim, though.
Have better visibility into the following year than I think I can ever remember. And that's simply because you know customers know that they're building these Fabs, they're announcing them, they're signaling to their customers. They're going to have that capacity available and so clearly we're having discussions at this point on uh what what tools are going to be needed, what technology knows, they're going to be running in those Fabs.
<unk> talking about this at CES.
We need this nonstop shown up.
<unk> clearly so.
And in 2007, I think we're going to see another year, where everything is growing I'm not ready to rank order it quite yet Jim though.
Timothy Archer: ... I think as we move through this year, though, we already, you know, I would say have better visibility into the following year than I think I can ever remember. And that's simply because, you know, customers know that they're building these fabs, they're announcing them, they're signaling to their customers they're going to have that capacity available. And so clearly, we're having discussions at this point on what tools are going to be needed, what technology nodes are going to be running in those fabs, and they want to make sure that they can secure the capacity such that that fab can be started up and producing as quickly as possible. And so those discussions on those fabs are clearly out into 2027.
Timothy Archer: I think as we move through this year, though, we already, you know, I would say have better visibility into the following year than I think I can ever remember. And that's simply because, you know, customers know that they're building these fabs, they're announcing them, they're signaling to their customers they're going to have that capacity available. And so clearly, we're having discussions at this point on what tools are going to be needed, what technology nodes are going to be running in those fabs, and they want to make sure that they can secure the capacity such that that fab can be started up and producing as quickly as possible. And so those discussions on those fabs are clearly out into 2027.
I think as we move through this year, though we already.
I would say.
They have better visibility into the following year, then I think I can ever remember and Thats simply because.
Customers know that they are building new fabs, they are announcing them theyre signaling to their customers, they're going to have that capacity available and so clearly we are having discussions at this point on.
What tools are going to be needed what technology nodes that can be running in those fabs and they want to make sure that they can secure the capacity such that that fab can be started up and producing as quickly as possible and so those discussions on those fabs are clearly out into 2027.
You know, I talked about the the tremendous growth in advanced packaging and the importance that, it's the role that it's playing. And so, you know, we've been seeing that so I guess we'd have to see the year continued to evolve and how the markets, uh, um, kind of where the, where the demand is the shortest, but we would anticipate. As we said, robust investment across all device segments, and I think that continues on into 2027 across all all 3, segments,
Thank you.
Thanks John.
Timothy Archer: But I think in terms of exactly how those decisions get made through this year, and, you know, once you have clean room space, it, you know, in some cases can, as we just talked about, they can trade off sometimes a little bit of clean room space to be used for DRAM or for NAND, or for what we've seen in a few cases, is for Advanced Packaging. You know, I talked about the tremendous growth in Advanced Packaging and the importance that it's, the role that it's playing. So, you know, we've been seeing that. I guess we'd have to see the year continue to evolve and how the markets kind of where the demand is the shortest.
And but I think in terms of exactly how those decisions get made through this year and once you're a freemium space.
But I think in terms of exactly how those decisions get made through this year, and, you know, once you have clean room space, it, you know, in some cases can, as we just talked about, they can trade off sometimes a little bit of clean room space to be used for DRAM or for NAND, or for what we've seen in a few cases, is for Advanced Packaging. You know, I talked about the tremendous growth in Advanced Packaging and the importance that it's, the role that it's playing. So, you know, we've been seeing that. I guess we'd have to see the year continue to evolve and how the markets kind of where the demand is the shortest.
In some cases, Ken as we just talked about they can trade off sometimes a little bit of clean room space to use for <unk>.
DRAM or NAND or for what we've seen in a few cases is for advanced packaging.
Talked about the tremendous growth in advanced packaging and the importance of it.
Role that it's playing and so we've been seeing that so I guess, we'd have to see the year continue to evolve and how the markets.
The next question comes from Kris saying car with Cohen & Company, please go ahead. Yeah. Hi thanks for taking my question and congrats on the good results and guide Doug. My first question is, I understand that you spoke about the global manufacturing footprint, double over the last 4 years just wondering as your customers ramp up more onshore manufacturing. Would it lead to you increasing shipments from your us facilities in California and Oregon, rather than Malaysia for some of your products. If so, what would it be? The margin implications?
Kind of where that where the demand is the shortest but we would anticipate as we said robust investment across all device segments and I think that continues on into 2027 across all three segments.
Timothy Archer: But we would anticipate, as we said, robust investment across all device segments, and I think that continues on into 2027 across all, all three segments.
But we would anticipate, as we said, robust investment across all device segments, and I think that continues on into 2027 across all, all three segments.
Yeah. Chris listen, we have a global manufacturing footprint, right? We've got factories in Oregon California, Ohio, Malaysia, Taiwan Korea.
Thank you.
Harlan Sur: Thank you.
Jim Schneider: Thank you.
Thanks, Jeff.
Douglas R. Bettinger: Thanks, Joe.
Douglas Bettinger: Thanks, Jim.
The next question comes from Krish Shankar with Cowen <unk> Company. Please go ahead.
Operator: The next question comes from Krish Sankar with Cowen and Company. Please go ahead.
Operator: The next question comes from Krish Sankar with Cowen and Company. Please go ahead.
Uh Austria, I think I didn't miss anything. There we have some level of flexibility given enough time to move things around if we really need to do that.
Yeah, Hi, Thanks for taking my question and congrats on the good results and guide Doug. My first question is I understand that you spoke about the global manufacturing footprint to double over the last four years I'm just wondering as your customers ramp up more onshore manufacturing would it lead to you increasing shipments from the U S facilities in California, and Oregon, rather than Malaysia for some.
Krish Sankar: Yeah, hi, thanks for taking my question, and congrats on the good results and guide. Doug, my first question is, I understand that you spoke about the global manufacturing footprint. It's doubled over the last four years. Just wondering, as your customers ramp up more onshore manufacturing, would it lead to you increasing shipments from your US facilities in California and Oregon rather than Malaysia for some of your products? If so, what would be the margin implications?
Krish Sankar: Yeah, hi, thanks for taking my question, and congrats on the good results and guide. Doug, my first question is, I understand that you spoke about the global manufacturing footprint. It's doubled over the last four years. Just wondering, as your customers ramp up more onshore manufacturing, would it lead to you increasing shipments from your US facilities in California and Oregon rather than Malaysia for some of your products? If so, what would be the margin implications?
Um, and as customers tell us what they need and where they need it, we may adjust things. Um right now I think we feel pretty good about how we've got things set up though.
Got it, got it. Thanks for that. And Tim I just want to follow up for you like a technical question. Lastly, you had a really good Traction in ald Molly,
All of your products.
What are the margin implications.
Our customers moving away from single wafer ale to batch ale, for Molly and it's so, uh, how would that impact lamb?
Yes, Chris listen we have a global manufacturing footprint right, we've got factories in Oregon, California, Ohio, Malaysia, Taiwan Korea.
Douglas R. Bettinger: Yeah, Krish, listen, we have a global manufacturing footprint, right? We've got factories in Oregon, California, Ohio, Malaysia, Taiwan, Korea, Austria. I think I didn't miss anything there. We have some level of flexibility, given enough time to move things around if we really need to do that. As customers tell us what they need and where they need it, we may adjust things. Right now, I think we feel pretty good about how we've got things set up, though.
Douglas Bettinger: Yeah, Krish, listen, we have a global manufacturing footprint, right? We've got factories in Oregon, California, Ohio, Malaysia, Taiwan, Korea, Austria. I think I didn't miss anything there. We have some level of flexibility, given enough time to move things around if we really need to do that. As customers tell us what they need and where they need it, we may adjust things. Right now, I think we feel pretty good about how we've got things set up, though.
No. I mean, well at this point, uh,
Austria, I think I didn't miss anything there we have some level of flexibility given enough time to move things around if we really need to do that.
And as customers tell us what they need and where they needed we may adjust things.
Right now I think we feel pretty good about how we've got things setup.
Got it got it thanks for that and then Tim I just wanted to follow up for you and a good technical question. Lastly, you had really good traction in AMD Molly.
Krish Sankar: Got it. Got it. Thanks for that. And then, Tim, I just have a follow-up for you, like a technical question. Last year, you had really good traction in ALD Moly. Are customers moving away from single wafer ALD to batch ALD for Moly, and if so, how would that impact Lam?
Krish Sankar: Got it. Got it. Thanks for that. And then, Tim, I just have a follow-up for you, like a technical question. Last year, you had really good traction in ALD Moly. Are customers moving away from single wafer ALD to batch ALD for Moly, and if so, how would that impact Lam?
Are customers moving away from single wafer <unk> Bachelor LIFO, Molly and if so.
How would that impact lamb.
No I mean at this point.
Timothy Archer: No, I mean, well, at this point, if we look, we had said previously that in kind of the order of adoption, NAND would be first to adopt Moly, and we're seeing that, followed by foundry logic and then, and then ultimately by DRAM. You know, what we can say right now is that the customers that have committed to production using Moly in NAND have gone with Lam's tools. We have a very strong position there. And I think that the value of that, as we've talked in the past, is it means that throughout these first production ramps with ALD Moly, we are building the installed base, we're maturing the tool, we're getting process learning. You know, competitors aren't going to give up.
Timothy Archer: No, I mean, well, at this point, if we look, we had said previously that in kind of the order of adoption, NAND would be first to adopt Moly, and we're seeing that, followed by foundry logic and then, and then ultimately by DRAM. You know, what we can say right now is that the customers that have committed to production using Moly in NAND have gone with Lam's tools. We have a very strong position there. And I think that the value of that, as we've talked in the past, is it means that throughout these first production ramps with ALD Moly, we are building the installed base, we're maturing the tool, we're getting process learning. You know, competitors aren't going to give up.
If we look we had said previously that.
if we look we we had said previously that uh in kind of the order of adoption man would be first to adopt Molly and we're seeing that followed by Foundry logic and then and then ultimately by DM. You know what we can say right now is that the customers that have committed to production of M you're using Molly, in man, have gone with Lambs tools. We, we, we have a very strong position there. Um, and I think that the value of that is, we talked in the past, is, it means that throughout this these first production ramps with ald Molly, we are building an installed base for maturing the tool. We're getting processed learning um you know C you know, competitors aren't going to give up. This is an is an incredibly important market and a big inflection that we've talked about but we feel really good about
And kind of the order of adoption NAND would be first to adopt Molly and we're seeing that followed by foundry logic and then ultimately by DRAM.
We can say right now is that the customers that have committed to production of model using modeling in NAND have.
Our single, you know, we call it single way for Molly. But uh, if you look at the tool itself, it has multiple stations inside of 1, uh, chamber in order to give ourselves uh, um, High productivity. So, you know, that's a Production Tool of choice today for the industry. And, uh, we intend to continue to keep it that way.
Gone with lens tools, we have a very strong position there.
Got it. Thanks for watching.
Thanks crash.
And I think that the value of that as we've talked in the past is it means that throughout this these first production ramps with AMD.
The next question comes from Harland Sir with JP Morgan. Please go ahead.
Holly we are building an installed base and maturing the tool we're getting process learning.
Customer competitors aren't going to give up this isn't it is an incredibly important market and a big inflection that we've talked about but we feel really good about our single.
Yeah, good afternoon and great job on the quarterly execution. You know just as many of your customers have been surprised by the sudden Rising compute and storage demand and therefore
Timothy Archer: This is an incredibly important market and a big inflection that we've talked about. But we feel really good about our single wafer, you know, we call it single wafer for Moly, but if you look at the tool itself, it has multiple stations inside of one chamber in order to give ourselves high productivity. So you know, that's a production tool of choice today for the industry, and we intend to continue to keep it that way.
This is an incredibly important market and a big inflection that we've talked about. But we feel really good about our single wafer, you know, we call it single wafer for Moly, but if you look at the tool itself, it has multiple stations inside of one chamber in order to give ourselves high productivity. So you know, that's a production tool of choice today for the industry, and we intend to continue to keep it that way.
We call it single a formality, but if you look at the tool itself. It has multiple stations inside of one chamber in order to give ourselves.
High productivity so.
The production tool of course today for the industry and we intend to continue to keep it that way.
Requirements for more gpus, xpu CPUs, and the associated memory and storage. They they obviously got caught somewhat flat footed in terms of sort of near the midterm capacity to support that demand curve, right? As you guys outlined, is the stronger velocity of the man, having a similar impact to your manufacturing capability, and ability to procure, the necessary components and subsystems, and any bottlenecks that you have in your supply chain,
Got it thank you okay.
Krish Sankar: Got it. Thanks a lot, Tim.
Krish Sankar: Got it. Thanks a lot, Tim.
Thanks, Chris.
Douglas R. Bettinger: Thanks, Krish.
Douglas Bettinger: Thanks, Krish.
The next question comes from Harlan sur with Jpmorgan. Please go ahead.
Operator: The next question comes from Harlan Sur with JP Morgan. Please go ahead.
Operator: The next question comes from Harlan Sur with J.P. Morgan. Please go ahead.
Yes, good afternoon, and great job on the quarterly execution, just as many of your customers have been surprised by the sudden rise in compute and storage and that and therefore.
Harlan Sur: Yeah, good afternoon, and great job on the quarterly execution. You know, just as many of your customers have been surprised by the sudden rise in compute and storage demand, and therefore requirements for more GPUs, XPUs, CPUs, and the associated memory and storage, they obviously got caught somewhat flat-footed in terms of sort of near- to midterm capacity to support that demand curve, right, as you guys outlined. Is the stronger velocity of demand having a similar impact to your manufacturing capability and ability to procure the necessary components and subsystems, and any bottlenecks that you have in your supply chain?
Harlan Sur: Yeah, good afternoon, and great job on the quarterly execution. You know, just as many of your customers have been surprised by the sudden rise in compute and storage demand, and therefore requirements for more GPUs, XPUs, CPUs, and the associated memory and storage, they obviously got caught somewhat flat-footed in terms of sort of near- to midterm capacity to support that demand curve, right, as you guys outlined. Is the stronger velocity of demand having a similar impact to your manufacturing capability and ability to procure the necessary components and subsystems, and any bottlenecks that you have in your supply chain?
Requirements from our Gpus Cpus and associated storage.
Well, it isn't a without a lot of hard work, but you know, 1 good news is is uh, you know, we we did a lot of, uh, of uh, fact finding posts the coid pandemic and the supply shortages that it occurred. Um, you know, in our own systems at that time and we made a lot of improvements and Doug just talked about the, the global
<unk>, obviously got caught somewhat flat footed in terms of sort of near to midterm capacity to support that demand curve right. As you guys outlined is the stronger velocity of demand and having a similar impact to you our manufacturing capability and ability to procure.
Necessary components and subsystems in any bottlenecks that you have in your supply chain.
Nature of our manufacturing facilities um spanning from the US and Europe and an altar Asia. And we looked at the same thing with respect to our supply chain and I would say today compared to when we had those shortages we have we have built a much stronger broader deeper supply chain. And so, you know,
Well it isn't without a lot of hard work, but.
Timothy Archer: Well, it isn't without a lot of hard work, but you know, one good news is you know, we did a lot of fact-finding post the COVID pandemic and the supply shortages that occurred, you know, in our own systems at that time, and we made a lot of improvements. And Doug just talked about the global nature of our manufacturing facilities-
Timothy Archer: Well, it isn't without a lot of hard work, but you know, one good news is you know, we did a lot of fact-finding post the COVID pandemic and the supply shortages that occurred, you know, in our own systems at that time, and we made a lot of improvements. And Doug just talked about the global nature of our manufacturing facilities
One good news is we did a lot of.
Of <unk>.
That finding post the COVID-19 pandemic and the supply shortages that have occurred.
I don't want to sell short the hard work of our supply chain guys today to meet all these expedited pull-in requests from customers. It's very hard work. But today, I would say, we're not, as we're not the big constraint for any of the devices compared to, um, uh, payment space being a constraint to the industry. And so,
In our own systems at that time, and we've made a lot of improvements and Doug just talked about the global nature of our manufacturing facilities.
Harlan Sur: Mm-hmm.
Timothy Archer: Spanning from the US to Europe and all through Asia. And we looked at the same thing with respect to our supply chain. And I would say today, compared to when we had those shortages, we have built a much stronger, broader, deeper supply chain. And so, you know, I don't want to sell short the hard work of our supply chain guys today to meet all these expedited pull-in requests from customers. It's very hard work. But today, I would say we're not the big constraint for any of the devices, compared to clean room space being a constraint to the industry. And so, as the industry continues to go, we need to keep working to, again, expand our capacity, as I said, make our own operations faster.
Standing from the U S and Europe, and Australasia, and we looked at the same thing with respect to our supply chain and I would say today compared to when we had those shortages. We have we have built a much stronger broader deeper supply chain and so.
Spanning from the US to Europe and all through Asia. And we looked at the same thing with respect to our supply chain. And I would say today, compared to when we had those shortages, we have built a much stronger, broader, deeper supply chain. And so, you know, I don't want to sell short the hard work of our supply chain guys today to meet all these expedited pull-in requests from customers. It's very hard work. But today, I would say we're not the big constraint for any of the devices, compared to clean room space being a constraint to the industry. And so, as the industry continues to go, we need to keep working to, again, expand our capacity, as I said, make our own operations faster.
Loan operations faster. It's why we've done things like uh, automating our warehouses to make the the the the rate at which we can feed those parts from the time they're received from the supplier into the manufacturing, um, that much quicker and more efficient. And so we're just continually working on what what I would want to do is our operational velocity. And uh, so that we're not the constraint.
I don't want to sell short the hard work of our supply chain guys today to meet all these expedited pull in request from customers. It is very hard work, but today I would say, we're not we're not the big constraint for any of the devices compared to.
Payment space being a constraint to the industry and so.
As the industry continues to go we need to keep working to then.
Expand our capacity as I said make our own operations faster, it's why we've done things like automating our warehouses to make the.
Timothy Archer: That's why we've done things like automating our warehouses to make the rate at which we can feed those parts from the time they're received from the supplier into the manufacturing that much quicker and more efficient. And so we're just continually working on what I would call do is our operational velocity, and so that we're not the constraint.
That's why we've done things like automating our warehouses to make the rate at which we can feed those parts from the time they're received from the supplier into the manufacturing that much quicker and more efficient. And so we're just continually working on what I would call do is our operational velocity, and so that we're not the constraint.
The rate at which we can feed those parts from the time they receive from the supplier into the manufacturing that much quicker and more efficient and so we're just continually working on what I would point to is our operational velocity and so that theyre not the constraint.
Uh, appreciate that. Then for my second question, you know, 1 of the significant obviously, an incremental drivers of your business among many, um, has been Advanced packaging, and hmm, you guys did about a billion dollars plus in advanced packaging revenues. I think it was in calendar 24. We anticipating strong 40% plus growth this year. Uh, but can you guys quantify how much Advanced packaging grew for the team and calendar 25? And then of that 40% growth this year, is that being more driven by 2 and a half feet 3 and a half feet Advanced packaging or hbm.
I appreciate that and then for my second question one of the significant obviously, an incremental drivers of business. Among many hasnt been advanced packaging in HCM you guys did about $1 billion plus in advanced packaging revenues I think it was in calendar 'twenty four.
Blayne Curtis: ... No, I appreciate that. Then for my second question, you know, one of the significant, obviously, and incremental drivers of your business, among many, has been Advanced Packaging and HBM. You guys did about $1 billion plus in Advanced Packaging revenues. I think it was in calendar 2024. You're anticipating strong 40%+ growth this year. But can you guys quantify how much Advanced Packaging grew for the team in calendar 2025? And then of that 40% growth this year, is that being more driven by 2.5D, 3.5D Advanced Packaging, or HBM?
Harlan Sur: No, I appreciate that. Then for my second question, you know, one of the significant, obviously, and incremental drivers of your business, among many, has been Advanced Packaging and HBM. You guys did about $1 billion plus in Advanced Packaging revenues. I think it was in calendar 2024. You're anticipating strong 40%+ growth this year. But can you guys quantify how much Advanced Packaging grew for the team in calendar 2025? And then of that 40% growth this year, is that being more driven by 2.5D, 3.5D Advanced Packaging, or HBM?
Yeah, Helen we didn't quantify 2025 in packaging. Except to tell you, it, it grew nicely, and I think we're going to kind of leave it at that Tim. Gave you the 40% this year. So we're we're, we're super excited about what's going on there, and I'll let Tim talk about the Technologies.
Anticipating strong 40% plus growth this year.
But can you guys quantify how much of advanced packaging grew for the team in calendar 'twenty five and then of that 40% growth this year.
Yeah, it's, uh, we we've lumped it together. I mean, it is, uh, it is strengthened, uh, in hbm clearly there's strong demand there, but also, um, I talked about more complex packaging, schemes across Advanced Foundry, logic. And that's, uh, that's an important driver for us as well. You know, the great thing about our Advanced packaging capabilities is, you know, they are
That being margin by $2 five E <unk> advanced packaging or HBM.
Yes, Colin we didn't quantify 2025 and packaging except to tell you. It grew nicely and I think we're going to kind of leave it at that Tim gave you the 40%. This year. So we're super excited about what's going on there and I'll, let Tim talk about the technologies.
Douglas R. Bettinger: Yeah, Harlan, we didn't quantify 2025 in packaging, except to tell you it grew nicely, and I think we're gonna kind of leave it at that. Tim gave you the 40% this year, so we're super excited about what's going on there. And I'll let Tim talk about the technologies.
Douglas Bettinger: Yeah, Harlan, we didn't quantify 2025 in packaging, except to tell you it grew nicely, and I think we're gonna kind of leave it at that. Tim gave you the 40% this year, so we're super excited about what's going on there. And I'll let Tim talk about the technologies.
They're they're used in, in, in the advanced packaging of of all device types and so you know it's things like copper plating, if things like uh um etch um dielectric Gap fills, um and so they're really fundamental Technologies to to the success.
So we we see that as a really important business, and we've talked about the fact that, you know, we continue to invest, um, in uh, in new technologies in that space.
Yes, we've lumped it together I mean it is it has strengthened.
Timothy Archer: Yeah, it's we've lumped it together. I mean, it is strength in HBM. Clearly, there's strong demand there. But also, I talked about more complex packaging schemes across advanced foundry logic, and that's an important driver for us as well. You know, the great thing about our advanced packaging capabilities is, you know, they're used in the advanced packaging of all device types. And so, you know, things like copper plating and things like etch, dielectric gap fills, and so they're really fundamental technologies to the success. So we, we-
Timothy Archer: Yeah, it's we've lumped it together. I mean, it is strength in HBM. Clearly, there's strong demand there. But also, I talked about more complex packaging schemes across advanced foundry logic, and that's an important driver for us as well. You know, the great thing about our advanced packaging capabilities is, you know, they're used in the advanced packaging of all device types. And so, you know, things like copper plating and things like etch, dielectric gap fills, and so they're really fundamental technologies to the success. So we, we
Thank you.
Thanks Charlotte.
<unk> clearly there is strong demand there, but also I talked about more complex packaging schemes across advanced foundry logic and that's that's an important driver for us as well the great thing about our advanced packaging capabilities as.
The next question comes from. Stacy rasgon with Bernstein research. Please go ahead.
They are.
They are used in the advanced packaging all device types, and so things like contemplating if things like that.
Hi guys. Uh, thanks for taking my questions. Um, for my first 1 uh you know Doug you clearly said it's a second half a load of the year which is fine. What does that imply for the first half of of the calendar year like is is March quarter, the trough
Hedge.
Do you think things are kind of flattish at the March level until we get that second half in flux? And just how are you thinking about the shape of the year?
Dielectric <unk>.
And so they are really fundamental technologies too to the success.
So we see that as a really important business and we've talked about the fact that we continue to invest.
Blayne Curtis: Thank you.
Harlan Sur: Thank you.
Timothy Archer: See that as a really important business, and we've talked about the fact that, you know, we continue to invest in new technologies in that space.
Timothy Archer: See that as a really important business, and we've talked about the fact that, you know, we continue to invest in new technologies in that space.
In the in new technologies in that space.
Thank you.
Blayne Curtis: Thank you.
Harlan Sur: Thank you.
Thanks Charlotte.
Douglas R. Bettinger: Thanks, Harlan.
Douglas Bettinger: Thanks, Harlan.
The next question comes from Stacy <unk> with Bernstein Research. Please go ahead.
Yeah. You you know it's just a great question. I I frankly, as I sit here right now I I think we're going to see growth every quarter from the previous quarter. I'm not going to give you a precise number. We feel good about that March quarter as a June, probably grows from that September from that. Uh, and it ends up being a second halfway to year. Both from a WP standpoint and, and from our Revenue
Operator: The next question comes from Stacy Rasgon with Bernstein Research. Please go ahead.
Operator: The next question comes from Stacy Rasgon with Bernstein Research. Please go ahead.
Hi, guys. Thanks for taking my questions.
Stacy Rasgon: Hi, guys. Thanks for taking my questions. For my first one, you know, Doug, you clearly said it's a second half a loaded year, which is fine. What does that imply for the first half of the calendar year? Like, is March quarter the trough? Do you think things are kind of flattish at the March level until we get that second half inflection? Just how are you thinking about the shape of the year?
Stacy Rasgon: Hi, guys. Thanks for taking my questions. For my first one, you know, Doug, you clearly said it's a second half a loaded year, which is fine. What does that imply for the first half of the calendar year? Like, is March quarter the trough? Do you think things are kind of flattish at the March level until we get that second half inflection? Just how are you thinking about the shape of the year?
I I guess to get there, would you need an inflection in that growth rate in the second half? I I guess some of its Compares which makes it easier but just
First one Doug.
Clearly you said, it's a second half loaded year, which is fine what does that imply for the first half of the calendar year is March quarter. The trough do you think things are kind of flattish at the March level until we get that second half inflection just how you're thinking about the shape of the year.
Are you thinking there's an inflection? You think the growth is steady or
I think it's reasonably steady.
Yes, it's a great question.
Douglas R. Bettinger: Yeah, you know, Stacy, it's a great question. I frankly, as I sit here right now, I think we're going to see growth every quarter from the previous quarter. I'm not going to give you a precise number. We feel good about that March quarter. I think June probably grows from that, September from that, and it ends up being a second half-weighted year, both from a WFE standpoint and from our revenue.
Douglas Bettinger: Yeah, you know, Stacy, it's a great question. I frankly, as I sit here right now, I think we're going to see growth every quarter from the previous quarter. I'm not going to give you a precise number. We feel good about that March quarter. I think June probably grows from that, September from that, and it ends up being a second half-weighted year, both from a WFE standpoint and from our revenue.
Frankly as I sit here right now I think we're going to see growth every quarter from the previous quarter I'm not going to give you a precise number.
I mean, the the part of this is going to get modulated by okay. How much play your space is available at each customer and I think that you know, they're trying to figure out still and so are we uh which is why I'm not giving you more specificity. It will be second halfway to. But like I said I I think you'll see growth quarter by quarter as we go through 26.
What about the March quarter, I think June probably grows from that September from that.
It ends up being a second half weighted year, both from a government fee standpoint and from our revenue.
I guess to get there would you need an inflection in that growth rate in the second half I guess some of its compares which makes it easier but just.
Stacy Rasgon: I guess to get there, would you need an inflection in that growth rate in the second half? I guess some of it compares, which makes it easier, but just are you thinking there's an inflection, or you think the growth is steady, or?
Stacy Rasgon: I guess to get there, would you need an inflection in that growth rate in the second half? I guess some of it compares, which makes it easier, but just are you thinking there's an inflection, or you think the growth is steady, or?
Are you thinking there is an inflexion do you think the growth is steady or.
I think it's reasonably steady.
Douglas R. Bettinger: I think it's reasonably steady. I mean, the part of it's going to get modulated by, okay, how much cleaning space is available at each customer, and I think that, you know, they're trying to figure out still, and so are we, which is why I'm not giving you more specificity. It will be second half-weighted, but like I said, I think you'll see growth quarter by quarter as we go through 2026.
Douglas Bettinger: I think it's reasonably steady. I mean, the part of it's going to get modulated by, okay, how much cleaning space is available at each customer, and I think that, you know, they're trying to figure out still, and so are we, which is why I'm not giving you more specificity. It will be second half-weighted, but like I said, I think you'll see growth quarter by quarter as we go through 2026.
Stacy I guess the only thing I would add is I was just going to add that the you know my comment about basically every customer is asking for pulling. And so there's some element of, you know, whether whether or not we can accelerate some small portion and, you know, into the first half of the year, we would still see growth in the second because obviously that probably means things start pulling in from the first half of next year as well, but we're in an accelerating environment of of both demand and also uh, timing requests.
I mean the.
Part of the screen demodulated by it okay, how much training.
Available at each customer and I think that.
They're trying to figure out still and so are we.
You know, and so, uh, you know, I think that back to the question I was asked about constraints. I think we need to see through the year. How those play out as to, you know, kind of how how we how much we can do.
Which is why I'm not giving you a more specificity it will be second half weighted but like I said, I think youll see growth quarter by quarter as we go through 'twenty six.
Stacy I guess, the only thing I would add is that.
Timothy Archer: Stacy, I guess the only thing I would add is that I was just going to add that, you know, my comment about basically every customer is asking for pull-ins, and so there's some element of, you know, whether, whether or not we can accelerate some small portion in, you know, into the first half of the year. We would still see growth in the second, because obviously, that probably means things start pulling in from the first half of next year as well. But we're in an accelerating environment of both demand and also timing requests, you know? And so, you know, I think that back to the question that was asked about constraints, I think we need to see through the year how those play out as to, you know, kind of how, how we, how much we can do.
Timothy Archer: Stacy, I guess the only thing I would add is that I was just going to add that, you know, my comment about basically every customer is asking for pull-ins, and so there's some element of, you know, whether, whether or not we can accelerate some small portion in, you know, into the first half of the year. We would still see growth in the second, because obviously, that probably means things start pulling in from the first half of next year as well. But we're in an accelerating environment of both demand and also timing requests, you know? And so, you know, I think that back to the question that was asked about constraints, I think we need to see through the year how those play out as to, you know, kind of how, how we, how much we can do.
I was just going to add that.
My comment about basically every customer is asking for <unk> and so there is some element of.
Whether whether or not we can accelerate some small portion into the first half of the year, we would see.
Got it. Thank you that that's helpful. And for my second question, I just wanted to ask about China said Doug I think you said you expected China to be flat year over year was that a market statement or was that a lamb Revenue statement and the percentage should go go down? I guess it was, I don't know what it was 36% or something in calendar. 25, you had talked previously about like a 30% threshold, do you think it gets to that 30% or you think it's just down, but doesn't quite get there?
You'll see growth in the second because obviously I've probably been things start pulling in from the first half of next year as well, but we're in an accelerating environment.
Both demand and also timing requests and so I think that back to the question that was asked about constraints I think we need to see through the year, how those play out as to kind of help.
Yeah, Stacy, um, you're coming in. In fact, it was. We think wfd in China is flat-ish 25 to 26 and everything else is going to grow. So as a percent of the total, it's going to be down.
How much we can do.
Got it. Thank you that's helpful and for my second question I, just wanted to ask about China, Doug I think you said you expected China to be flattish year over year was that a market statement or was that a lam revenue statement and the percentage should go go down I guess it was unaware was 36% or something in calendar 'twenty that you had talked previously about like a 30%.
Stacy Rasgon: Got it. Thank you. That, that's helpful. And for my second question, I just wanted to ask about China. So Doug, I think you said you expected China to be flattish year over year. Was that a market statement, or was that a Lam revenue statement? And the percentage should go, go down. I guess, it was, I don't know what it was, 36% or something in calendar 2025. You had talked previously about, like, a 30% threshold. Do you think it gets to that 30%, or you think it's just down but doesn't quite get there?
Stacy Rasgon: Got it. Thank you. That, that's helpful. And for my second question, I just wanted to ask about China. So Doug, I think you said you expected China to be flattish year over year. Was that a market statement, or was that a Lam revenue statement? And the percentage should go, go down. I guess, it was, I don't know what it was, 36% or something in calendar 2025. You had talked previously about, like, a 30% threshold. Do you think it gets to that 30%, or you think it's just down but doesn't quite get there?
Growth comes from uh, outside of China.
So numerator denominator thing as well obviously.
Yeah, I I I I got it. I got it. Thank you so much. Appreciate it.
Thanks, Stacey.
The next question comes from. Blaine. Curtis with Jeffrey's, please. Go ahead.
So do you think it gets to that 30% or do you think this is down but it doesn't quite get there.
Yes Stacy.
Douglas R. Bettinger: Yeah, Stacy, the comment, in fact, Jim made it was, we think WFE in China is flattish, 25 to 26, and everything else is going to grow. So as a percent of the total, it's going to be down. We didn't give a precise number. Whether it's in the low 30s or high 20s, that's ± probably where it is. And part of it will be modulated by how much growth comes from outside of China. It's a numerator, denominator thing as well, obviously.
Douglas Bettinger: Yeah, Stacy, the comment, in fact, Jim made it was, we think WFE in China is flattish, 25 to 26, and everything else is going to grow. So as a percent of the total, it's going to be down. We didn't give a precise number. Whether it's in the low 30s or high 20s, that's ± probably where it is. And part of it will be modulated by how much growth comes from outside of China. It's a numerator, denominator thing as well, obviously.
Comment in fact, no matter what we.
We think wip in China is flat ish 25 to 26 and everything else is going to grow as a percent of the total that's going to be down.
Hey guys, thanks for squeezing me in, um, couple questions, maybe, um, just just Doug, I wanted to just understand the, the strength and Reliant, uh, you know, with China down. Is that multinational? I, I, I just go to curious where, where you're seeing that demand. I know you could have lumpy. I just was curious. Why? It was up so much.
We didn't give a precise number whether its in the low <unk> or high <unk>, that's plus or minus probably where it is and part of it will be modulate by how much growth comes from outside of China.
It was multinational animals China. It it was a little bit of both of them. Uh blank.
So numerator denominator thing as well obviously.
Stacy Rasgon: Yeah. I got it. I got it. Thank you so much. Appreciate it.
Stacy Rasgon: Yeah. I got it. I got it. Thank you so much. Appreciate it.
Yes.
Got it got it. Thank you so much I appreciate it.
Got you. Thanks and and then just on the NF front, uh, you know, obviously the demand is very strong. You talked about the, the upgrades happening earlier. It does that fit in the camp of also second half waited? I mean, it's not waiting on clean room space. I'm just kind of curious that the shape of Nan through their
Thanks Joseph.
Douglas R. Bettinger: Thanks, Stacy.
Douglas Bettinger: Thanks, Stacy.
The next question comes from Blayne Curtis with Jefferies. Please go ahead.
Operator: The next question comes from Blaine Curtis with Jefferies. Please go ahead.
Operator: The next question comes from Blaine Curtis with Jefferies. Please go ahead.
Um, yeah, it probably is a little bit. Second halfway did blank.
Hey, guys. Thanks for squeezing me in.
Blayne Curtis: Hey, guys. Thanks for squeezing me in. Couple questions. Maybe just Doug, I wanted to just understand the strength in Reliant, you know, with China down, is that multinational? I just was curious where you're seeing that demand. I know you said it's lumpy. I just was curious why it was up so much.
Blayne Curtis: Hey, guys. Thanks for squeezing me in. Couple questions. Maybe just Doug, I wanted to just understand the strength in Reliant, you know, with China down, is that multinational? I just was curious where you're seeing that demand. I know you said it's lumpy. I just was curious why it was up so much.
Couple of questions maybe.
Okay, thank you.
Doug I wanted to just understand the strengthened reliant with China down is that multinational I, just curious where you're seeing that demand I know you said it is lumpy I just was curious why it was up so much.
The next question comes from Melissa, weathers with Deutsche Bank, please go ahead.
It was multinational analyst China, it was a little bit of both of them.
Douglas R. Bettinger: It was multinational, and it was China. It, it was a little bit of both of them, Blaine.
Douglas Bettinger: It was multinational, and it was China. It, it was a little bit of both of them, Blaine.
Got you. Thanks, and then just on the NAND front.
Blayne Curtis: Got you. Thanks. And then just on the NAND front, you know, obviously, demand is very strong. You talked about the upgrades happening earlier. And does that fit in the camp of also second half-weighted? I mean, it's not waiting on clean room space. I'm just kind of curious the shape of NANDs for the year.
Blayne Curtis: Got you. Thanks. And then just on the NAND front, you know, obviously, demand is very strong. You talked about the upgrades happening earlier. And does that fit in the camp of also second half-weighted? I mean, it's not waiting on clean room space. I'm just kind of curious the shape of NANDs for the year.
Obviously, the demand is very strong you talked about the upgrades happening earlier.
Does that fit in the camp of also second half weighted I mean, it's not waiting on clean room space I'm, just kind of curious the shape of <unk> through the year.
Hi, thank you. Um I wanted to go back to the Nan side and touch on something that Tim mentioned in his prepared remarks on the expanding applications for nand in the data center. Um and Doug you you kind of alluded to some of the CES announcements as well. So is the right interpretation that those applications in the data center, have expanded versus what you guys had been thinking. Because you guys have been talking about and and in the data center for
Douglas R. Bettinger: Yeah, it probably is a little bit second half-weighted, Blaine.
Yes, it probably is a little bit second half weighted growth.
Douglas Bettinger: Yeah, it probably is a little bit second half-weighted, Blaine.
Several quarters now. Um, so is that the right way to think about it? And then, uh, what could this mean for like your Molly ald your, um,
Okay. Thank you.
Blayne Curtis: Okay, thank you.
Blayne Curtis: Okay, thank you.
Your 300 layer type devices and expanding, share. You could get there.
That's correct.
Douglas R. Bettinger: Thanks, Blaine.
Douglas Bettinger: Thanks, Blaine.
The next question comes from Melissa Weathers with Deutsche Bank. Please go ahead.
Operator: The next question comes from Melissa Weathers with Deutsche Bank. Please go ahead.
Operator: The next question comes from Melissa Weathers with Deutsche Bank. Please go ahead.
Hi, Thank you I wanted to go back to the NAND side and touch on something that Tim mentioned in his prepared remarks on the expanding applications for NAND in the data center and Doug you kind of alluded to some of the CES announcements as well. So is the right interpretation that those applications in the data center have expanded versus what you guys had.
Timothy Archer: Hi, thank you. I wanted to go back to the NAND side and touch on something that Tim mentioned in his prepared remarks on the expanding applications for NAND in the data center. And Doug, you kind of alluded to some of the CES announcements as well. So is the right interpretation that those applications in the data center have expanded versus what you guys had been thinking? Because you guys have been talking about NAND in the data center for-
Melissa Weathers: Hi, thank you. I wanted to go back to the NAND side and touch on something that Tim mentioned in his prepared remarks on the expanding applications for NAND in the data center. And Doug, you kind of alluded to some of the CES announcements as well. So is the right interpretation that those applications in the data center have expanded versus what you guys had been thinking? Because you guys have been talking about NAND in the data center forseveral quarters now. So is that the right way to think about it? And then, what could this mean for, like, your Moly ALD, your 300-layer type devices and the expanding share you could get there?
Been thinking because you guys have been talking about and NAND in the data center for.
[Analyst] (Deutsche Bank): ... several quarters now. So is that the right way to think about it? And then, what could this mean for, like, your Moly ALD, your 300-layer type devices and the expanding share you could get there?
Several quarters now.
So is that the right way to think about it and then.
What could this mean for like your moly ALC here.
Yeah, sure. I I think we, we characterize it as as a new use case. So I I don't think we saw this particular use case coming which is uh you know, related to the AI inference and kind of the expansion of KV cache and and such um I think our previous estimates have been more kind of on more traditional storage for using Enterprise ssds and so yeah this is this is an expansion and and kind of presents a bit longer term growth opportunity for uh for Mandan. So therefore it would be beyond the kind of projections that we would have given back to the investor day a year ago for the Now. Look for man, long term.
Yes, 300 layer type devices.
Sure you could get there.
Yeah sure I think we characterize it as a new use case. So I don't think we saw this particular use case coming which is.
Timothy Archer: Yeah, sure. I think we characterize it as a new use case. So I don't think we saw this particular use case coming, which is, you know, related to the AI inference and kind of the expansion of TB cache and such. I think our previous estimates have been more kind of on more traditional storage for using enterprise SSDs. And so, yeah, this is an expansion and kind of presents a bit longer-term growth opportunity for NAND. And so therefore, it would be beyond the kind of projections that we would have given back at Investor Day a year ago for the outlook for NAND long term.
Timothy Archer: Yeah, sure. I think we characterize it as a new use case. So I don't think we saw this particular use case coming, which is, you know, related to the AI inference and kind of the expansion of TB cache and such. I think our previous estimates have been more kind of on more traditional storage for using enterprise SSDs. And so, yeah, this is an expansion and kind of presents a bit longer-term growth opportunity for NAND. And so therefore, it would be beyond the kind of projections that we would have given back at Investor Day a year ago for the outlook for NAND long term.
Related to the AI inference, and kind of the expansion of TV caching and such.
Great. Thank you. Um, and then a quick question, on the inventory side of things Doug, I just wanted to check in and see how you're thinking about Parts availability and your ability, your ability to scale production in line with demand. Can you help us with the framework to think about how you're thinking about inventories on a days or dollars basis?
I think our previous estimates have been more kind of on more traditional storage for using enterprise Ssds and so yes. This is this is an expansion and kind of presents a bit longer term growth opportunity for <unk> for NAND and so therefore, it would be beyond the kind of projections that we would've given back at Investor day.
A year ago.
Look demand long term.
Okay. Thank you and then a quick question on the inventory side of things, Doug I, just wanted to check in and see how youre thinking about parts availability and your bill your ability to scale production in line with demand can you help us with the framework to think about how youre thinking about inventories on a days or dollars basis.
[Analyst] (Deutsche Bank): Great, thank you. And then a quick question on the inventory side of things. Doug, I just wanted to check in and see how you're thinking about parts availability and your ability to scale production in line with demand. Can you help us with a framework to think about how you're thinking about inventories on a days or dollars basis?
Melissa Weathers: Great, thank you. And then a quick question on the inventory side of things. Doug, I just wanted to check in and see how you're thinking about parts availability and your ability to scale production in line with demand. Can you help us with a framework to think about how you're thinking about inventories on a days or dollars basis?
Do you have a list of know? That's a great question. Um, listen. If uh we're right about how things play out here is very likely that we're going to need to build some inventory and total dollar terms as we go through the year, right? When business grows, you got to stuff ready for the growing business. So I think that's clearly going to happen. Uh, we will remain focused on asset utilization and efficiencies and hopefully be able to drive turns up a little bit from here. Um, but we definitely are going to need to build some inventory in advance of a growing Top Line. So we'll, we'll be working on all of that, Melissa. Thank you.
Thanks Melissa.
The next question comes from Joe quatrochi with Wells Fargo, please go ahead.
Yes, Melissa no. It's a great question.
Douglas R. Bettinger: Yeah, Melissa, no, it's a great question. Listen, if we're right about how things play out here, it's very likely that we're gonna need to build some inventory in total dollar terms as we go through the year, right? When business grows, you got to have stuff ready for that growing business, so I think that's clearly gonna happen. We will remain focused on asset utilization and efficiencies and hopefully be able to drive turns up a little bit from here. But we definitely are gonna need to build some inventory in advance of a growing top line. So we'll, we'll be working on all of that, Melissa.
Douglas Bettinger: Yeah, Melissa, no, it's a great question. Listen, if we're right about how things play out here, it's very likely that we're gonna need to build some inventory in total dollar terms as we go through the year, right? When business grows, you got to have stuff ready for that growing business, so I think that's clearly gonna happen. We will remain focused on asset utilization and efficiencies and hopefully be able to drive turns up a little bit from here. But we definitely are gonna need to build some inventory in advance of a growing top line. So we'll, we'll be working on all of that, Melissa.
Listen this.
We're right about how things play out here is very likely that we're going to need to build some inventory in total dollar terms as we go through the year right. When business grows you got enough stuff ready for the growing business. So I think thats clearly going to happen.
Hey, thanks for taking the questions, um, maybe just to follow up on that. Is there any area of your supply chain? Where you, you know, you're pushing suppliers, maybe that that could be a potential area of shortage, or or do you feel like there's uh, available capacity to to continue to kind of support the growth you're talking about?
We will remain focused on asset utilization and efficiencies and hopefully be able to drive turns up a little bit from here.
But we definitely are going to need to build some inventory in advance of a growing topline. So we'll be working on all of that Melissa.
Thank you.
[Analyst] (Deutsche Bank): Thank you.
Melissa Weathers: Thank you.
Thanks Melissa.
Douglas R. Bettinger: Thanks, Melissa.
Douglas Bettinger: Thanks, Melissa.
The next question comes from Joe <unk> with Wells Fargo. Please go ahead.
Operator: The next question comes from Joe Quattrocchi with Wells Fargo. Please go ahead.
Operator: The next question comes from Joe Quattrocchi with Wells Fargo. Please go ahead.
Well, I think that we uh we don't have any line of sight to to significant problems at this point. I made the comment a couple times. It's clearly a lot of work. Given the accelerated nature of the demand and the the the high levels of demand, um, and customer requests for Poland's. Um, you know, well within our normal lead times but uh, at this point, you know, we're working across our Global Supply Chain to ensure that uh, we can meet meet the demand.
Hey, thanks for taking the questions.
Joe Quattrocchi: Hey, thanks for taking the questions. Maybe just to follow up on that, is there any area of your supply chain where you're, you know, you're pushing suppliers, maybe that, that could be a potential area of shortage, or, or do you feel like there's available capacity to, to continue to kind of support the growth you're talking about?
Joe Quattrocchi: Hey, thanks for taking the questions. Maybe just to follow up on that, is there any area of your supply chain where you're, you know, you're pushing suppliers, maybe that, that could be a potential area of shortage, or, or do you feel like there's available capacity to, to continue to kind of support the growth you're talking about?
Maybe just to follow up on that is there any area of your supply chain, where youre pushing suppliers, maybe that could be a potential area of shortage or do you feel like there is.
Available capacity to continue to kind of support the growth Youre talking about.
Well I think that we don't have any line of sight to significant problems at this point I made the comment a couple of times. It's clearly a lot of work given the accelerated nature of the demand in that.
Timothy Archer: Well, I think that we don't have any line of sight to significant problems at this point. I made the comment a couple of times; there's clearly a lot of work, given the accelerated nature of the demand and the high levels of demand, and customer requests for pull-ins, you know, well within our normal lead times. But at this point, you know, we're working across our global supply chain to ensure that we can meet the demand.
Timothy Archer: Well, I think that we don't have any line of sight to significant problems at this point. I made the comment a couple of times; there's clearly a lot of work, given the accelerated nature of the demand and the high levels of demand, and customer requests for pull-ins, you know, well within our normal lead times. But at this point, you know, we're working across our global supply chain to ensure that we can meet the demand.
Right. And maybe as a follow-up China, now expect to be spotted. Is that, is that a reflection of just the the affiliate rule impacts re-entering kind of wfd across across, you know, the the, uh, company base or in terms of just your peers. Um, or is there like a change in the underlying demand that you're seeing as well in China?
The high levels of demand.
And customer requests for pull ins.
Well within our normal lead times, but at this point, we're working across our global supply chain to ensure that.
Broad-based set of customers spending in China that have nothing to do with the affiliate rules. So it's it's the Mosaic of everything that's going on there. It's it's it's very Broad.
Thank you.
We can meet meet the demand.
Thanks Joe operator. We will do 1 more question.
Questions.
Joe Quattrocchi: Thanks. And maybe as a follow-up, China now expected to be flattish. Is that a reflection of just the Affiliate Rule impacts reentering kind of WFE across, you know, the customer base or in terms of just your peers, or is there, like, a change in the underlying demand that you're seeing as well in China?
Joe Quattrocchi: Thanks. And maybe as a follow-up, China now expected to be flattish. Is that a reflection of just the Affiliate Rule impacts reentering kind of WFE across, you know, the customer base or in terms of just your peers, or is there, like, a change in the underlying demand that you're seeing as well in China?
Thanks, and maybe as a follow up China now expected to be flattish is that.
Is that a reflection of just the affiliate rule impacts reentering kind of WSI across across.
Um thanks for being in. Um hi Kim and Doug, just a quick question, on The Foundry side, you know I think uh,
<unk>.
Company base or in terms of your peers.
Or is there a change in the underlying demand that youre seeing as well in China.
I think it's probably a little bit of affiliate Ruben frankly.
Douglas R. Bettinger: Well, I think it's, Joe, it's probably a little bit of the Affiliate Rule, but frankly, it's, it's, there's a broad-based set of customer spending in China that have nothing to do with the Affiliate Rule. So it's, it's, it's very broad.
Douglas Bettinger: Well, I think it's, Joe, it's probably a little bit of the Affiliate Rule, but frankly, it's, it's, there's a broad-based set of customer spending in China that have nothing to do with the Affiliate Rule. So it's, it's, it's very broad.
China was down, I guess you mentioned affiliate role, but The Foundry is growing Almost 100% plus around here. Um just wondering as you look at 2627 with uh some of the Leading Edge found this accelerating. How you see that road map?
A broad based set of customer spending in China that have nothing to do with the affiliate rules. So it's the mosaic of everything thats going on there.
yeah, I want to get
It's very broad.
Thank you.
Joe Quattrocchi: Thank you.
Joe Quattrocchi: Thank you.
Thanks, Joe Operator, we will do one more question.
Douglas R. Bettinger: Thanks, Joe. Operator, we will do one more question.
Douglas Bettinger: Thanks, Joe. Operator, we will do one more question.
Okay. Our next question comes from behavior cash with Mizuho. Please go ahead.
Operator: Okay. Our next question comes from Vijay Rakesh with Mizuho. Please go ahead.
Operator: Okay. Our next question comes from Vijay Rakesh with Mizuho. Please go ahead.
Hello. Thanks.
Vijay Rakesh: Oh, thanks. Thanks for putting me in. Hi, Tim and Doug. Just a quick question on the foundry side. You know, I think, China was down, I guess you mentioned the Affiliate Rule, but your foundry is growing almost 100% plus year-over-year. Just wondering, as you look at 2026, 2027, with some of the leading-edge foundries accelerating, how you see that roadmap?
Vijay Rakesh: Oh, thanks. Thanks for putting me in. Hi, Tim and Doug. Just a quick question on the foundry side. You know, I think, China was down, I guess you mentioned the Affiliate Rule, but your foundry is growing almost 100% plus year-over-year. Just wondering, as you look at 2026, 2027, with some of the leading-edge foundries accelerating, how you see that roadmap?
Census, being hike and then Doug just a quick question on the foundry side and I think.
China was down I guess, you mentioned the affiliate rules.
It is growing almost 100% plus year on year, just wondering as you look at 2687 with.
So on the leading edge foundries accelerating how youll see that fortinet.
Uh, speaking to what, what it would look like from road map perspective is, you know, uh, each each technology node, we said the, uh, the opportunity for lamb from an Etch in depth intensity perspective and how our tools, you know, like the aara, um, and, and others fit into that. Um, it the opportunities to get bigger, um, as you move forward, you start seeing things that again would anticipate, uh, you know, future nodes, to talk, 27/28 introduction of things like backside power. Um, again more use of advanced packaging, across more of the Leading Edge, Foundry, space, all of those things are good for us from both the Sam and the share perspective. So um,
Yes, well I guess.
Timothy Archer: Yeah, well, I guess, speaking to what it looks like from a roadmap perspective is, you know, each technology node, we said the opportunity for Lam from an etch and depth intensity perspective and how our tools, you know, like the Acara and others fit into that. Our opportunities get bigger. As you move forward, you start seeing things that, again, we would anticipate, you know, future nodes as sub-27, 28, introduction of things like backside power. Again, more use of advanced packaging across more of the leading-edge foundry space. All of those things are good for us from both a SAM and a share perspective. So, and that's a-- it's a, it's a. From a product perspective, it's a very good picture for us.
Timothy Archer: Yeah, well, I guess, speaking to what it looks like from a roadmap perspective is, you know, each technology node, we said the opportunity for Lam from an etch and depth intensity perspective and how our tools, you know, like the Acara and others fit into that. Our opportunities get bigger. As you move forward, you start seeing things that, again, we would anticipate, you know, future nodes as sub-27, 28, introduction of things like backside power. Again, more use of advanced packaging across more of the leading-edge foundry space. All of those things are good for us from both a SAM and a share perspective. So, and that's a-- it's a, it's a. From a product perspective, it's a very good picture for us.
That's that's a it's a it's a from a product perspective, it's it's a it's a very good picture for us.
Speaking to what it looks like from roadmap perspective.
Each each technology node, we said.
Opportunity for Lam from an etch and dep intensity perspective, and how our tools like <unk> and others fit into that.
The opportunities get bigger.
As you move forward you start seeing things that again, we would anticipate.
Got it. And then on the on the data side, uh, I know you mentioned briefly hbm 4 uh, with 15 layers. Obviously that's a nice step up from, uh, where hbm is now, can you talk to what that does, um, for your, um, you know, WFC the content and the growth there on the DM HPM side. Thanks.
Future nodes, 27, 28, and introduction of things like backside power.
Again more use of advanced packaging across more of the leading edge foundry space. All of those things are good for us from both the Sam and share perspective. So.
I mean, that's it's a from a product perspective.
It's a very good picture for us.
Got it and then on the on the DRAM side I know you mentioned briefly is being fought with 16 less obviously, that's a nice step up from <unk>.
Vijay Rakesh: Got it. And then on the DRAM side, I know you mentioned briefly HBM4 with 16 layers. Obviously, that's a nice step up from where HBM is now. Can you talk to what that does for your, you know, WFE, the content and the growth there on the DRAM HBM side? Thanks.
Vijay Rakesh: Got it. And then on the DRAM side, I know you mentioned briefly HBM4 with 16 layers. Obviously, that's a nice step up from where HBM is now. Can you talk to what that does for your, you know, WFE, the content and the growth there on the DRAM HBM side? Thanks.
Yeah. I mean just in general terms, I mean what happens is you um you end up going to next Generation HPM dies, become bigger. And that's generally, what is creating the majority of the problem relative to uh when we talk about clean room, space constraints, uh, you get you need more clean room space and more tooling for fit that comes out of the Fab. So, therefore, uh, that is what we're trying to to communicate is obviously the performance improves. But the, the space required and the equipment required, uh, increases
Great. Thank you. Thank you.
<unk> now can you talk about what that does.
Yeah.
W E T.
Content growth there on the DRAM SPN site. Thanks.
Yes, I mean, just in general terms I mean, what happens is you.
Timothy Archer: Yeah, I mean, just in general terms, I mean, what happens is you end up going to next-generation HBM, dies become bigger, and that's generally what is creating the majority of the problem relative to when we talk about cleanroom space constraints. You need more cleanroom space and more tooling per fit that comes out of the fab. So therefore, that is what we're trying to communicate is, obviously, the performance improves, but the space required and the equipment required increases.
Timothy Archer: Yeah, I mean, just in general terms, I mean, what happens is you end up going to next-generation HBM, dies become bigger, and that's generally what is creating the majority of the problem relative to when we talk about cleanroom space constraints. You need more cleanroom space and more tooling per fit that comes out of the fab. So therefore, that is what we're trying to communicate is, obviously, the performance improves, but the space required and the equipment required increases.
Yeah, I appreciate everybody's questions uh, today. Uh, that concludes, uh, our call for today. I will look forward to seeing everybody uh, as we do the conference circuit and, uh, and get out on the road. So thank you for, uh, your time today.
You ended up going to next generation HBM die has become bigger and Thats generally what is creating the majority of the problem relative to ly.
Thank you, everyone. The conference is now concluded.
You may now disconnect
When you're talking about clean room space constraints.
You get you need more clean room space and more tooling per fit that comes out of them. So therefore that is what we're trying to communicate is obviously the performance improves.
The space required in the equipment required increases.
Got it thank you vision.
Vijay Rakesh: Got it. Thank you.
Vijay Rakesh: Got it. Thank you.
Douglas R. Bettinger: Thank you, Vijay. Yeah, appreciate everybody's questions today. That concludes our call for today. We'll look forward to seeing everybody as we do the conference circuit and get out on the road. So thank you for your time today.
Douglas Bettinger: Thank you, Vijay. Yeah, appreciate everybody's questions today. That concludes our call for today. We'll look forward to seeing everybody as we do the conference circuit and get out on the road. So thank you for your time today.
Appreciate everybody's questions today that concludes our call for today, we will look forward to seeing everybody as we do the conference circuit and get out on the road. So thank you for your time today.
Thank you everyone. The conference has now concluded.
Operator: Thank you, everyone. The conference is now concluded. You may now disconnect.
Operator: Thank you, everyone. The conference is now concluded. You may now disconnect.
