Lam Research (LRCX) Barclays 22nd Annual Global Technology Conference 2024 summary

Market outlook and growth drivers

• Wafer fab equipment (WFE) spending for 2024 is estimated at $95 billion, with leading-edge foundry logic and DRAM performing well, while NAND and trailing-edge logic remain soft outside China.

• 2025 is expected to be a growth year, driven by NAND upgrades, continued DRAM strength, and advanced packaging, though China WFE is projected to decline.

• NAND spending will focus on upgrading the aged installed base, with metallization changes from tungsten to molybdenum, rather than adding new wafer capacity.

• Leading-edge foundry logic remains strong, led by a major customer, while trailing-edge logic and mature nodes are soft due to inventory cycles.

• DRAM investment continues, especially in high bandwidth memory and DDR5 transitions, supporting ongoing growth.

Technology and innovation trends

• Advanced packaging, including chiplet architectures and high bandwidth memory, has become a billion-dollar-plus business and is expected to keep growing.

• Gate-all-around (GAA) and backside power are each billion-dollar opportunities, with GAA ramping now and backside power expected to contribute from late 2025 or 2026.

• Dry photoresist, in collaboration with ASML, is anticipated to be a billion-dollar opportunity within four to five years.

• These technology inflections drive incremental growth across both foundry logic and memory markets.

Memory market dynamics

• NAND upgrades are driven by the need to support QLC structures and move beyond sub-200 layer devices, with eSSD demand and client refreshes expected to improve in 2025.

• DRAM growth is fueled by server CPU transitions to DDR5 and high bandwidth memory, with TSV stacking and larger die sizes increasing equipment needs.

• High bandwidth memory (HBM) is a key growth area, with HBM-related business tripling this year.