Core Insights - Lam Research (LRCX) plays a crucial role in the AI supply chain by providing deposition machines such as the ALTUS Halo, which facilitates atomic layer deposition (ALD) for the mass production of molybdenum, transitioning from tungsten [1] Group 1: Company Overview - Lam Research is focused on supplying advanced deposition machines that are essential for the semiconductor manufacturing process, particularly in the context of AI technology [1] Group 2: Market Position - The company is positioned to benefit from the ongoing AI boom, as it supplies critical equipment that supports the production of materials necessary for AI applications [1]

Summary of Semiconductor Capital Equipment Conference Call Industry Overview - The conference call focuses on the **Semiconductor Capital Equipment** industry, specifically discussing the **Wafer Fabrication Equipment (WFE)** market forecast for 2026 and 2027, driven by **DRAM** and **TSMC** [1][2][5]. Key Points and Arguments Market Forecast - The WFE market forecast for 2026 is maintained at **$129 billion** (up **11%** year-over-year), while the 2027 forecast is revised up from **$137 billion** to **$145 billion** (up **13%**) [2][5]. - The growth is attributed to strong demand in **DRAM** and **foundry logic**, with a notable increase in **NAND** demand being moderated [2][5]. DRAM Insights - **DRAM** is expected to grow by **17%** in 2026 and **12%** in 2027, entering a new paradigm with a projected **25%** bit growth compared to **16%** from 2022 to 2025 [3][32]. - Major suppliers like **Micron**, **Hynix**, and **Samsung** are required to accelerate their greenfield projects significantly to meet this demand [3][32]. NAND Insights - **NAND** demand is projected to grow by **28%** in 2026 and **26%** in 2027, driven by the rise of **eSSDs** [3][52]. - The required NAND WFE is estimated to be approximately **$13-16 billion**, with half of this coming from upgrades and the other half from greenfield projects, including contributions from **YMTC** [3][52]. Foundry Logic - **Foundry Logic** is expected to grow by **6%** in 2026 and **11%** in 2027, with potential upside risks if TSMC's equipment mix increases from **75%** to **80%** [3][4][31]. Bull Case Scenarios - The bull case for 2026 includes a potential **$2.5 billion** upside for TSMC if their equipment mix increases, alongside extended purchase orders from hyperscalers for NAND [4][31]. - Upside risks for 2027 include renewed foundry investments from **Intel**, accelerated logic investments in **China**, and increased memory bit demand [4][31]. Financial Projections - Revenue and EPS estimates for **AMAT**, **LAM**, and **KLA** have been revised up by an average of **3.3%** and **4.7%**, respectively, with price targets increased by an average of **9.6%** [5][19]. - The 2027 revenue and EPS forecasts are above consensus by **5.3%** and **4.7%**, indicating a conservative outlook that may allow for further revisions if market conditions improve [5][19]. Regional Insights - The WFE revenue by region shows significant contributions from **China**, **Korea**, and **Taiwan**, with projections indicating continued resilience in these markets [23][21]. Additional Considerations - The call emphasizes the importance of greenfield projects and the need for major players to adapt to changing market dynamics, particularly in DRAM and NAND sectors [32][52]. - The cyclical nature of the NAND market is highlighted, with expectations for spending to resume, indicating a recovery phase post-2025 [66]. This summary encapsulates the critical insights and projections discussed during the conference call, providing a comprehensive overview of the semiconductor capital equipment landscape for the upcoming years.

Summary of China Semiconductors Conference Call Industry Overview - **Industry**: China Wafer Fab Equipment (WFE) - **Current Trends**: The WFE spending in China is projected to increase, contrary to previous expectations of decline. The revised projections indicate a strong demand growth driven by local vendors and advanced logic capacity expansion. Key Points WFE Spending Projections - **2025 Spending**: Revised up to USD 48 billion from USD 35 billion, marking a +7% increase YoY instead of a -19% decline as previously anticipated [2][19] - **2026 Spending**: Expected to further increase to USD 50 billion, driven by strong demand from local vendors and advanced logic capacity expansion [20][19] - **2027 Spending**: Projected to decline by -14% YoY, but this is subject to change based on market conditions [21] Demand Drivers - **AI Influence**: The demand for advanced logic in China is significantly driven by AI developments, with local companies like Huawei innovating in AI networking, which enhances the use of local AI chips [3] - **Local Vendor Growth**: Local vendors are gaining market share, particularly in DRAM and matured logic segments, benefiting from increased domestic substitution [4] Market Dynamics - **Import Trends**: WFE imports to China have shown a +7% YoY increase, indicating stronger than expected demand [19][33] - **Localization Efforts**: The localization ratio is expected to reach 22% in 2025, supported by government subsidies and co-development initiatives with local WFE suppliers [17][22] Company Insights - **NAURA**: Rated as Outperform, with a target price of CNY 480.00, benefiting from a broad product portfolio and diverse client base [7] - **AMEC**: Also rated Outperform, with a target price of CNY 380.00, recognized for its technology and global presence [8] - **Piotech**: Rated Outperform with a target price of CNY 375.00, noted for its innovation in advanced packaging [9] Investment Implications - **Positive Outlook**: The overall sentiment for the WFE market in China remains positive, with expectations of continued growth driven by local demand and technological advancements [11][12] Additional Insights - **Global Context**: Despite a global downcycle, China's WFE demand grew by 36% in 2023, contrasting with a -14% decline in the rest of the world [13] - **Future Monitoring**: The situation will be closely monitored, especially regarding the potential normalization of demand in 2027 [21] Conclusion The China WFE market is experiencing unexpected growth, driven by local vendors and advancements in AI technology. The outlook for 2025 and 2026 is particularly strong, with significant implications for investment in local semiconductor companies.

The latest 13F from Grantham, Mayo, Van Otterloo & Co. (GMO) offers a clear window into how Jeremy Grantham is positioning capital in a market he believes is both richly valued and increasingly narrow. Despite his well-known warnings about bubbles and froth, GMO’s actual equity book remains highly rational — concentrated in dominant franchises with durable cash flows, strong balance sheets, and long-term secular tailwinds.Below is a breakdown of the most important top holdings and what they signal about GMO ...

Core Insights - Lam Research Corporation (LRCX) is a leading supplier in the semiconductor manufacturing equipment sector, with a market cap of $194.9 billion, playing a vital role in advanced semiconductor architectures used in various industries [1][2] Company Performance - LRCX is classified as a large-cap stock, emphasizing its significant size and influence in the semiconductor equipment and materials industry, supported by strong industry partnerships and a focus on innovation [2] - The company's stock is currently trading 7.2% below its 52-week high of $167.15, but has rallied 49.7% over the past three months, outperforming the Technology Select Sector SPDR Fund (XLK), which returned 7.9% in the same period [3] - Year-to-date, LRCX shares have increased by 114.8%, significantly higher than XLK's 22.1% rise, and over the past 52 weeks, the stock has soared 113.4%, compared to XLK's 20.9% increase [4] Earnings Report - In Q1, LRCX reported a total revenue of $5.3 billion, a 27.7% year-over-year increase, exceeding consensus estimates by 1.9%, with an adjusted EPS of $1.26, which was 4.1% above analyst expectations [5] - Despite the strong revenue growth, the company's bottom line declined by 5.3% from the previous quarter, which may have caused some investor concern, although the stock rebounded with a 4.5% increase in the following trading session [5] Competitive Position - LRCX has significantly outperformed its competitor, Applied Materials, Inc. (AMAT), which saw a 44.3% increase over the past 52 weeks and a 53.7% rise year-to-date [6]

Core Viewpoint - Lam Research Corporation (LRCX) is recommended as a strong buy based on robust March quarter results, strong guidance, and perceived undervaluation [1] Financial Performance - The March quarter results for Lam Research were described as robust, indicating strong operational performance [1] Guidance and Valuation - The company provided strong guidance for future performance, suggesting continued growth potential [1] - The stock is considered undervalued, presenting a potential investment opportunity [1]

Core Viewpoint - Lam Research Corporation (LRCX) is recommended as a strong buy based on robust March quarter results, strong guidance, and perceived undervaluation [1] Financial Performance - The March quarter results for Lam Research were described as robust, indicating strong financial performance [1] Guidance and Valuation - The company provided strong guidance for future performance, contributing to the positive outlook [1] - The stock is considered undervalued, suggesting potential for price appreciation [1]

Core Insights - Lam Research Corporation (LRCX) has experienced a significant stock price increase of 109% year-to-date, outperforming the Zacks Electronics – Semiconductors industry's gain of 33.5% [1][5] - The company has surpassed major semiconductor manufacturing tool providers such as KLA Corporation, ASML Holding, and Applied Materials, which saw stock increases of 80.4%, 42.5%, and 42% respectively [2] Financial Performance - In the first quarter of fiscal 2026, LRCX reported total revenues of $5.32 billion, a 28% year-over-year increase, exceeding the Zacks Consensus Estimate by 2% [6] - Non-GAAP earnings per share for the same quarter were $1.26, beating consensus estimates by 4.1%, and reflecting a 46.5% increase year-over-year [7] - The company's non-GAAP operating margin improved to 35%, up 410 basis points from the previous year, showcasing effective cost management [7][9] Market Trends and Growth Drivers - LRCX is benefiting from the rising demand for AI and datacenter chips, which require advanced fabrication technologies [10] - Shipments for gate-all-around nodes and advanced packaging are projected to exceed $1 billion in 2024, with expectations to triple to over $3 billion by 2025 [11] - Analysts forecast continued growth, with revenue estimates for fiscal 2026 and 2027 indicating year-over-year increases of 14.1% and 12.1%, respectively [13] Valuation - Despite the strong stock performance, LRCX is trading at a forward price-to-earnings (P/E) multiple of 29.52, lower than the industry average of 34.89, suggesting a reasonable valuation [14][17] - Compared to major semiconductor stocks, LRCX has a lower P/E multiple than ASML and KLA Corporation, while trading at a premium to Applied Materials [17] Investment Recommendation - Given its solid financial performance, focus on AI-driven growth, and attractive valuation, LRCX is considered a compelling investment option [18][19]

Market Overview - The Hong Kong stock market showed a significant recovery on November 24, with all three major indices ending a streak of declines[9] - Large tech stocks performed strongly, with Kuaishou rising over 7%, and NetEase and Bilibili increasing over 5%[9] - The Hang Seng Tech Index closed at 5,546, up 2.78% for the day and 24.11% year-to-date[3] Sector Performance - Innovative pharmaceuticals and outsourcing concepts saw notable gains, with companies like Innovent Biologics rising over 6%[9] - Military stocks also performed well, with China Shipbuilding Defense up over 13%[9] - Oil stocks were weak, with China National Offshore Oil Corporation and China Oilfield Services both declining over 1%[9] U.S. Market Insights - On the same day, U.S. markets saw all three major indices close higher, driven by increased bets on a Federal Reserve rate cut[9] - The "Magnificent Seven" tech stocks, including Google and Nvidia, all rose, with Google gaining over 6%[9] - The S&P 500 index is projected to achieve double-digit annual growth according to HSBC strategists[14] Economic Indicators - The Federal Reserve is expected to cut rates in December, with market predictions showing a 70% probability[14] - The U.S. economy's third-quarter GDP report has been delayed due to a government shutdown, affecting economic analysis[14] Investment Trends - The Nasdaq Golden Dragon China Index rose by 2.82%, indicating a positive trend for Chinese concept stocks[13] - Significant inflows into semiconductor stocks were noted, with companies like Broadcom surging 11%[13]

Summary of Global Semiconductor Capital Equipment Conference Call Industry Overview - The conference call focused on the **Global Semiconductor Capital Equipment** industry, particularly the **DRAM** and **foundry** sectors, with insights into **China's** capital expenditure (CapEx) trends and forecasts for wafer fab equipment (WFE) spending. Key Points and Arguments 1. **WFE Forecast Adjustments** - The WFE forecast for **2025** has been raised to **$119 billion** (+10% YoY) from **$114 billion** (+6% YoY) - The forecast for **2026** is now **$132 billion** (+10% YoY) from **$120 billion** (+5% YoY) - For **2027**, the forecast is adjusted to **$131 billion** (flat YoY) from **$115 billion** (-3%) - The upward revisions are primarily due to improved outlooks for **Global DRAM** and **China CapEx** [2][21][43] 2. **China WFE Demand** - China WFE demand has been significantly revised up by **$5.2 billion** in **2025**, **$7.0 billion** in **2026**, and **$8.4 billion** in **2027** - The increase is driven by higher demand for local AI chips and the need for more DRAM capacity to support future local HBM manufacturing - The anticipated IPO of **CXMT** is expected to provide additional cash for capacity expansion [4][43] 3. **Global DRAM and Foundry CapEx** - Global DRAM WFE is raised by **$4.2 billion** to grow **25% YoY** in **2026** (previously +13%) and another **10%** in **2027** - Foundry/logic WFE is slightly increased by **$0.8 billion** to **8% YoY** in **2026** and another **$1.4 billion** to **6% YoY** in **2027** - The increases reflect a more optimistic capex outlook from **TSMC** [3][21] 4. **Company Ratings and Price Targets** - **AMAT** (Applied Materials) and **LRCX** (Lam Research) are rated **Outperform** with price targets raised to **$260** and **$175**, respectively - Both companies are expected to benefit from key leading-edge inflections, with AMAT having more exposure to a stronger DRAM trajectory [5][17][47] 5. **Regional Insights** - In **Japan**, **Tokyo Electron** and **Kokusai** are preferred due to stronger memory capex - In **Europe**, **ASML** is viewed positively due to better advanced logic capex, although caution remains due to litho intensity and China market concerns [6][12][13][61] 6. **Chinese Semiconductor Companies** - **AMEC**, **NAURA**, and **Piotech** maintain an **Outperform** rating, with expectations of accelerated capacity expansion driven by domestic memory and advanced logic [7][62] Other Important Insights - The semiconductor industry is experiencing a shift towards **3D architectures**, which may impact future EUV adoption rates - There is a cautious outlook for **China's** WFE revenue in **2026**, with expectations of a significant decline despite strong performance in **2025** - The overall sentiment indicates a potential for short-term upside in China WFE, which could support margins due to its margin-accretive nature [13][46][63] This summary encapsulates the key insights and forecasts discussed during the conference call, highlighting the evolving landscape of the semiconductor capital equipment industry.