KLA (KLAC) Goldman Sachs Technology Communacopia and Technology Conference summary

Organizational and strategic updates

• Recent organizational changes give Ahmad Khan broader responsibility for the systems business, reflecting the merging of back-end and front-end markets and a focus on advanced packaging opportunities.

• Channel effectiveness improvements target specialty semiconductor and process businesses with significant exposure to advanced packaging.

• Advanced packaging is now a $500M+ opportunity in 2024, up from $300M last year, driven by high-performance compute markets.

Market and industry outlook

• 2024 is a transition year, with legacy investments ongoing and leading-edge investments increasing in the second half, setting up for expansion in 2025.

• WFE (wafer fab equipment) levels are stable in the mid-90s for 2024, with expected growth in 2025.

• Memory investment, especially DRAM, is expected to rise in 2025, while logic/foundry process control intensity remains higher than memory.

• China revenue is stable in absolute terms but will decline as a percentage of total sales due to growth from non-China customers.

Technology and product innovation

• Significant investments in new systems for advanced transistor architectures (e.g., Gate-all-around at N2), including Gen 4 and E-beam inspection systems.

• Process control intensity is increasing with each node, driven by new architectures, wafer-to-wafer bonding, and higher transistor counts per device.

• High NA EUV adoption is expected to further drive process control needs; KLA is aligning product releases with customer timelines and collaborating with Zeiss for actinic mask inspection.

• KLA’s portfolio approach allows it to address a broad range of inspection and metrology needs across the value chain.