Lam Research Corporation (LRCX) UBS Global Technology Conference (Transcript)

Summary of Lam Research Corporation Conference Call Company Overview - Company: Lam Research Corporation (NASDAQ:LRCX) - Date: November 28, 2023 - Participants: Tim Archer (President and CEO), Doug Bettinger (CFO) Key Industry Insights - Market Trends: - NAND market is experiencing a downturn, with WFE (Wafer Fabrication Equipment) share expected to be lower due to unfavorable mix [4][5] - DRAM pricing is strengthening, particularly driven by High Bandwidth Memory (HBM) [3] - Foundry logic remains strong at the leading edge, but weaker at mature nodes [3] - WFE Share Dynamics: - Current WFE share is at a seven-year low, primarily due to mix issues rather than a loss of market share at the application level [4][6] - NAND WFE is down more than 75% year-over-year, impacting revenue significantly [7] - Future Opportunities: - Lam sees potential growth in markets that have fallen the furthest, anticipating a rebound [3] - The company has identified several tech inflections (e.g., advanced packaging, gate-all-around, backside power delivery) that represent $1 billion+ market share growth opportunities [10] Financial Performance and Projections - **Revenue Growth**: - Lam's revenue could continue to grow even if NAND WFE does not return to previous peaks, due to higher capture rates from tech conversions [17][18] - The installed base has grown by approximately 40% since 2019, providing a solid foundation for future revenue generation [36] - **Service Business**: - The customer support business group (CSBG) is a significant revenue generator, with spares and service upgrades being key components [32] - Tools have a long lifespan, often generating more revenue over their lifetime than at initial sale [35] Competitive Landscape - **China Market Dynamics**: - The Chinese market has shown strong growth, particularly in the second half of the year, but there are concerns about sustainability [22][23] - Local Chinese companies are expected to capture a growing share of the WFE market, but Lam believes its technological edge will maintain its competitive advantage [28][30] - **Technology Leadership**: - Lam's access to leading-edge customers is crucial for innovation and maintaining market leadership [30] - The company is focused on advancing technology faster than competitors, particularly in high-tech areas [28] Strategic Focus - **R&D Investment**: - Lam is committed to investing in R&D to expand its served available market (SAM) in foundry logic, which is currently underexposed [50] - The company aims to leverage its expertise in 3D technologies to capture more market share across various device types [15] - **Long-term Growth Potential**: - The company anticipates significant growth opportunities by 2030, projecting a$ 1 trillion semiconductor industry with a larger share of WFE [51] - Lam's unique position allows for selective growth in underdeveloped areas of the market, presenting a favorable outlook for future profitability [51] Conclusion - Lam Research Corporation is positioned to capitalize on emerging market trends and technological advancements, despite current challenges in the NAND sector. The company's strategic focus on R&D, service revenue, and competitive technology leadership suggests a robust growth trajectory in the coming years.