Lam Research (LRCX) UBS Global Technology and AI Conference summary

Export controls and China market dynamics

• Recent export controls added both chipmakers and equipment companies to the Entity List, impacting prior customers and shifting demand to domestic Chinese equipment providers.

• New restrictions are expected to make it harder for Chinese equipment firms to source from outside China, potentially benefiting non-Chinese competitors.

• The pace of new Chinese customers is slowing, but there is no sign of consolidation among them.

• China WFE spending is expected to decline next year, but global growth will offset this.

• Deferred revenue increased due to larger down payments from new Chinese customers, though overall spending may be moderating.

Industry outlook and technology trends

• 2025 is expected to be a growth year for WFE, with 2024 WFE estimated at around $95 billion.

• NAND investments and upgrades will drive growth, with Lam holding strong share in key upgrade areas.

• Leading-edge foundry logic and DRAM, especially for DDR5 and HBM, are expected to remain strong, while trailing edge logic may soften.

• The transition to molybdenum from tungsten in NAND is set to begin mid-next year, creating new equipment demand.

• 3D DRAM is anticipated to emerge late in the decade, increasing etch and deposition intensity.

Business segments and competitive positioning

• The customer support business group (CSBG) now accounts for over 40% of revenue, with spare parts as the largest component and Reliant as the second largest.

• CSBG growth is driven by an expanding installed base, generating more revenue over the equipment lifecycle than initial sales.

• Lam maintains a leading position in advanced packaging, especially in HBM and through-silicon via applications.

• The company is well positioned in Cryo etch technology, with over 1,500 chambers in production and no significant competitive wins by peers.

• The acquisition of SEMSYSCO accelerates entry into fan-out panel-level packaging, with industry adoption expected around 2027-2028.