Lam Research Q3 2026 Earnings Report

Lam Research EPS Results

• Actual EPS: $1.47
• Consensus EPS: $1.36
• Beat/Miss: Beat by +$0.11
• One Year Ago EPS: $1.04

Lam Research Revenue Results

• Actual Revenue: $5.84 billion
• Expected Revenue: $5.70 billion
• Beat/Miss: Beat by +$141.47 million
• YoY Revenue Growth: +23.80%

Lam Research Announcement Details

• Quarter: Q3 2026
• Date: 4/22/2026
• Time: After Market Closes
• Conference Call Date: Wednesday, April 22, 2026
• Conference Call Time: 5:00PM ET

Lam Research (NASDAQ:LRCX) is a semiconductor equipment company that designs, manufactures, and services systems used in the fabrication of integrated circuits and other electronic devices. Its equipment supports key steps in the wafer manufacturing process, helping semiconductor producers create increasingly small and complex features on silicon wafers.

The company’s portfolio includes systems for etch, deposition, wafer cleaning, surface preparation, and related manufacturing processes. Lam Research also provides equipment upgrades, technical support, spare parts, and other services intended to help customers improve productivity and maintain semiconductor production systems throughout their operating life.

Founded in 1980 by Dr. David K. Lam, the company is headquartered in Fremont, California, and serves semiconductor manufacturers and other customers through operations and support networks across North America, Asia, Europe, and other major technology markets. Tim Archer has served as Lam Research’s president and chief executive officer since 2018.

Lam Research Q3 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: WFE outlook raised to $140 billion+ with a bias to the upside, and Lam expects its served available market (SAM) to expand to slightly above the mid‑thirties percent of WFE, moving toward its high‑thirties % target over the next few years.
• Positive Sentiment: Lam reported a record March quarter with $5.84 billion revenue and $1.47 EPS (above guidance), and guided June quarter revenue of $6.6 billion ±$400M with expanding gross and operating margins and record EPS guidance of $1.65 ±$0.15.
• Positive Sentiment: Customer Support Business Group delivered its 1st $2.1 billion quarter, with mid‑teens services growth and accelerating adoption of Equipment Intelligence and Dextro cobots (next‑gen Dextro ships with 10× more compute), driving recurring revenue and productivity upgrades.
• Positive Sentiment: AI is pulling NAND/DRAM conversion spending forward (majority of a previously cited ~$40B conversion now expected before end‑2027) and increasing etch/deposition intensity—Lam says its breadth of etch/dep tools positions it to capture elevated SAM and share gains.
• Negative Sentiment: Customer down payments fell by roughly $300 million to the lowest level in nearly four years, cash declined to about $4.8 billion after buybacks and debt paydown, and the company expects China revenue to be lower in the June quarter.

Presentation

[Operator]

day, and welcome to the Lam Research Corporation's March 2026 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then 1 on a touch-tone phone.

[Operator]

To withdraw your question, please press star then 2. Please note this event is being recorded. I would now like to turn the conference over to Ram Ganesh, Vice President of Investor Relations. Please go ahead.

[Ram Ganesh, VP of Investor Relations at Lam Research]

Thank you, and good afternoon, everyone. Welcome to Lam Research quarterly earnings conference call. With me today are Tim Archer, President and Chief Executive Officer, and Douglas Bettinger, Executive Vice President and Chief Financial Officer. During today's call, we will share our overview on the business environment, and we'll review our financial results for the March 2026 quarter and our outlook for the June 2026 quarter. The press release detailing our financial results was distributed a little after 1:00 P.M. Pacific Time. The release and the accompanying presentation slides for today's call can also be found on the Investors section of the company's website.

[Ram Ganesh, VP of Investor Relations at Lam Research]

Today's presentation and Q&A include forward-looking statements that are subject to risks and uncertainties reflected in the risk factors disclosed in our SEC public filings. Actual results could differ materially from those expressed in such forward-looking statements. Please see the accompanying presentation slides for additional information.

[Ram Ganesh, VP of Investor Relations at Lam Research]

Today's discussion of our financial results will be presented on a non-GAAP financial basis, unless otherwise specified. A detailed reconciliation between GAAP and non-GAAP results can be found in the accompanying presentation slides. This call is scheduled to last until 3 P.M. Pacific Time. A replay of this call will be made available later this afternoon on our website. With that, I'll hand the call over to Tim.

[Tim Archer, President and CEO at Lam Research]

Thank you, Ram, and good afternoon, everyone. Lam is off to a solid start in calendar year 2026, with revenues and profitability in the March quarter at the upper end of our guidance ranges and earnings per share exceeding the top end of our guided range. Revenues were at record levels, highlighted by the 1st $2 billion quarter from our customer support business group. Our guidance for the June quarter points to Lam's strong momentum in an accelerating AI-driven semiconductor demand environment. In January, we shared our outlook for 2026 WFE in the $135 billion range. Since then, spending projections from customers have moved higher across all device segments.

[Tim Archer, President and CEO at Lam Research]

We now expect WFE of $140 billion with a bias to the upside as the industry continues to work through various constraints. We believe this sets the stage for another year of compelling WFE growth in 2027.

[Tim Archer, President and CEO at Lam Research]

For Lam, the AI-driven demand environment is creating an ideal setup for continued outperformance. Semiconductor technology inflections required to meet escalating AI compute needs are driving higher deposition and etch intensity. In 2026, we see Lam's served available market, or SAM, percent of WFE expanding to slightly more than the mid-thirties % level, well on track toward our stated goal of high thirties % over the next few years. Lam is prepared for this moment by transforming how we innovate, build, and support the semiconductor manufacturing equipment needed to address the industry's most critical challenges.

[Tim Archer, President and CEO at Lam Research]

Our commitment to R&D and the velocity with which we have scaled our development capabilities have enabled us to create the broadest, most competitive product and services portfolio in the company's history. This is fueling our current outperformance and puts us in an excellent position to deliver on our future growth ambitions.

[Tim Archer, President and CEO at Lam Research]

Across all device segments, we are seeing greater opportunity for Lam. In NAND, AI transformation is moving beyond compute and into the storage layer. Token economics are driving changes to the memory hierarchy used in AI data centers, including rising adoption of higher layer count QLC-based NAND devices for SSDs. We expect total data center bits this year to be greater than both PC and mobile segments combined, with continuing growth in data center mix into the future.

[Tim Archer, President and CEO at Lam Research]

The growing device performance requirements of AI data centers are driving an acceleration of NAND technology upgrades. As you may recall, we said in early 2025 that roughly $40 billion in conversion spending would be required over several years to enable existing NAND-installed wafer capacity to produce devices with more than 200 layers.

[Tim Archer, President and CEO at Lam Research]

We now anticipate that this conversion will be pulled forward, with the majority of spending occurring before the end of calendar year 2027. In parallel, we expect growth in bit demand will drive greenfield capacity investment, especially considering that overall industry installed wafer capacity is expected to decline more than 20% from prior highs by the end of this year. Looking further ahead, we see continued adoption of NAND in the AI memory stack driving even higher layer count NAND devices. With the largest installed base of tools for 3D NAND, Lam is uniquely positioned to benefit from this trend. As manufacturing complexity scales with layer count, we see an expanding set of deposition and etch opportunities.

[Tim Archer, President and CEO at Lam Research]

All rooted in our established leadership in high aspect ratio cryo etch, dielectric stack deposition, word line metallization, backside stress management, and gap fill technologies.

[Tim Archer, President and CEO at Lam Research]

In dielectric etch, our Vantex and Flex tool sets deliver the industry's highest power density and productivity for dielectric channel hole etch applications, where we have a market-leading position. In conductor etch, we are also seeing momentum for our Kiyo systems as customers collaborate with us to maximize device yield in a constrained capacity environment. In a recent win, a customer switched to Kiyo in the middle of their production ramp due to superior defect performance and better yield. In deposition, we are seeing the transition to higher layer count NAND also drive greater demand for our Strata, ALTUS Halo ALD, and VECTOR DT products.

[Tim Archer, President and CEO at Lam Research]

Altogether, we believe the production-proven strength of our portfolio puts Lam in a great position to outperform overall NAND WFE growth as AI demand accelerates over the next few years.

[Tim Archer, President and CEO at Lam Research]

In DRAM, AI's power and efficiency requirements are driving an industry transition to 1C generation devices. As feature dimensions shrink, the industry is shifting from traditional silicon nitride-based dielectric films deposited using furnace to more advanced ALD silicon carbide low-k layers to achieve bitline capacitance reduction. Studies have shown that re-architected device structures, combined with low-k bitline spacers, can reduce capacitance by over 60%. Lam's Striker carbide solution, with its unique plasma source, enables capacitance scaling by depositing dense, conformal, and tunable low-k dielectric films with high productivity. As a result, our Striker-based solutions are the tools of record at all leading memory makers for bitline spacer applications.

[Tim Archer, President and CEO at Lam Research]

As the industry moves to 1C nodes, we see our total dielectric deposition, SAM and DRAM, growing more than 20%. With innovations like Striker ALD, we believe Lam is well-positioned to gain share within this expanding opportunity.

[Tim Archer, President and CEO at Lam Research]

In foundry logic, calendar 2025 was a record year for Lam. We are carrying that momentum into 2026 as we capture more opportunities from inflections at the leading edge. Most notably this quarter, we achieved both dielectric etch wins at a key foundry logic manufacturer, our 1st dielectric etch wins at this customer. Finally, we see growing demand for our advanced packaging solutions, where we bring unmatched experience in equipment design and process technology for copper plating and TSV etch.

[Tim Archer, President and CEO at Lam Research]

Lam's advanced packaging revenue growth is expected to exceed 50% in calendar year 2026. Turning to our customer support business group, we delivered our 1st $2 billion-plus revenue quarter. Demand was strong across spares, upgrades, and services. As customers look to improve fab output in a space-constrained environment, more opportunities are being created for CSBG to deliver innovations that increase productivity and enhance yield for our customers.

[Tim Archer, President and CEO at Lam Research]

Our services business posted mid-teens growth over the December quarter. Highlights included a new agreement with a leading foundry logic customer to deploy our Equipment Intelligence services for critical deposition applications. A top memory customer is also set to utilize our Equipment Intelligence capabilities in R&D to enable faster ramps of new nodes for NAND and DRAM production. We are also gaining momentum with our Dextro cobots, which deliver an unprecedented level of automated tool maintenance precision and repeatability. Customers using Dextro in production are benefiting from higher output and, in some cases, improved yield from existing capacity.

[Tim Archer, President and CEO at Lam Research]

In the March quarter, we expanded Dextro coverage to 8 Lam tool types, up from 6 last quarter. We also introduced the next generation of Dextro, which packs 10 times more compute power than the 1st generation into a smaller footprint.

[Tim Archer, President and CEO at Lam Research]

This quarter, we will ship our 1st Dextro cobot for a deposition product, further increasing our ability to create value from our overall installed base of more than 100,000 chambers. It's an exciting time for the semiconductor industry and for Lam. In an accelerating demand environment, we see rising deposition and etch intensity, creating a multiyear outperformance setup for Lam. We have made strategic investments across the company to capitalize on this opportunity, increasing the velocity of both our technology development and our operational execution.

[Tim Archer, President and CEO at Lam Research]

Our progress can be seen in our strong March quarter results, our higher June quarter outlook, and our expectation that H2 calendar year revenues will exceed the H1. In short, we are delivering on the tremendous opportunity in front of us with more to come. Thank you, and here's Doug.

[Douglas Bettinger, EVP and CFO at Lam Research]

Excellent. Thank you, Tim. Good afternoon, everyone, and thank you for joining our call today during what I know is a very busy earnings season. Lam's off to a solid start in 2026, building on the momentum we delivered across 2025. In the March quarter, revenue, gross margin, and operating margin came in above the midpoint of our guidance ranges, while earnings per share actually exceeded the high end of the range. We also achieved our 3rd consecutive record revenue quarter

[Douglas Bettinger, EVP and CFO at Lam Research]

. March quarter revenue came in at $5.84 billion, which was up 9% sequentially and up 24% from the same period in 2025. The deferred revenue balance at quarter end came in at $2.22 billion, which was flat sequentially. Within this balance, however, customer down payments came down by roughly $300 million, while the other line items increased with the growing business levels.

[Douglas Bettinger, EVP and CFO at Lam Research]

I just mentioned that down payments are now at the lowest level we've seen in nearly 4 years. From a market segment perspective, Foundry accounted for 54% of our systems revenue in the March quarter, which was down from 59% in the December quarter. Revenue in dollar terms was approximately flat sequentially, and it was up 35% year-over-year.

[Douglas Bettinger, EVP and CFO at Lam Research]

Foundry saw strength in investments at the leading edge, as well as ongoing mature node spending. Advanced packaging within Foundry continues to be an area of solid growth for us. Memory was 39% of systems revenue, up from 34% in the December quarter. Within Memory, we delivered record DRAM revenue, accounting for 27% of systems revenue, which was up from 23% in the December quarter. High bandwidth memory investments remained strong.

[Douglas Bettinger, EVP and CFO at Lam Research]

The profile of spending is also gravitating towards the 1C node and beyond, enabling the ramp of DDR5 and LPDDR5. Non-volatile memory contributed 12% of our systems revenue, up slightly from 11% in the December quarter. As Tim outlined, AI workloads are accelerating demand for higher capacity NAND, and Lam continues to benefit from strong leadership within this segment. We expect to see growth in NAND investments throughout the remainder of the year as the industry converts to 256 layer and above class devices.

[Douglas Bettinger, EVP and CFO at Lam Research]

Finally, the Logic and Other segment came in at 7% of systems revenue in March quarter, in line with prior quarter. Let's turn to the regional breakdown of our total revenue. China came in at 34%, which was a slight decrease from the prior quarter level of 35%. We expect that China revenue in the June quarter will decline from these levels.

[Douglas Bettinger, EVP and CFO at Lam Research]

Korea and Taiwan each came in at 23%, which was both up from 20% in the prior quarter. Both the Korea and Taiwan regions represent record revenue level in dollar terms in March. I just mentioned that this regional mix was generally in line with our expectations from the beginning of the quarter. Customer Support Business Group generated a record $2.1 billion in revenue in the March quarter, which was up 6% sequentially and up 25% from the same period in 2025.

[Douglas Bettinger, EVP and CFO at Lam Research]

Sequential growth was driven by our large and expanding installed base and the continued expansion across our spares, upgrades, and services business, partly offset by Reliant. Growth in spares and service is benefiting from strong factory utilization across the industry. Let's take a look at profitability.

[Douglas Bettinger, EVP and CFO at Lam Research]

Gross margin in the March quarter was 49.9%, which was at the high end of the guidance range, driven by multiple factors, including favorable customer product mix as well as improved factory efficiencies. Operating expenses in the March quarter came in at $866 million, up from the prior quarter's level of $827 million. The increase was driven by seasonal employee-related costs as well as higher headcount to support our growth. R&D accounted for 68% of total operating expenses. We will be growing R&D investments throughout the remainder of the year.

[Douglas Bettinger, EVP and CFO at Lam Research]

March quarter operating margin was 35% at the high end of our guidance range due to the higher revenue and the improved gross margin. The non-GAAP tax rate for the quarter was 9.2%, which came in lower due to benefits from higher equity compensation vesting, which is deductible on the taxes during the quarter.

[Douglas Bettinger, EVP and CFO at Lam Research]

We continue to see the tax rate in the low- to mid-teens% for calendar year 2026. Other income expense in the March quarter was $8 million in expense, compared with $10 million in income in the December quarter. The variance in OINE was primarily the result of small losses in our venture portfolio, as well as lower interest income. Interest income decreased due to the lower cash balance in the quarter. As we've talked about in the past, you should expect to see variability in OINE quarter to quarter.

[Douglas Bettinger, EVP and CFO at Lam Research]

For capital return in the March quarter, we allocated approximately $800 million to share buybacks through a combination of open share repurchases and a $200 million accelerated share repurchase transaction. Our average buyback price was approximately $211 per share. We also retired $750 million of unsecured notes that reached maturity using cash from the balance sheet.

[Douglas Bettinger, EVP and CFO at Lam Research]

Additionally, we paid $326 million in dividends. In the March quarter, we returned 139% of our free cash flow. Our plans remain to return at least 85% of free cash flow to our shareholders over time. The March quarter diluted earnings per share came in at a record of $1.47, which was above the high end of our guidance range. The diluted share count was 1.26 billion shares, which is flat with the December quarter, and consistent with our guidance.

[Douglas Bettinger, EVP and CFO at Lam Research]

I just mentioned that we have $4.3 billion remaining on our board-authorized share repurchase program. Let me pivot to the balance sheet. Cash and cash equivalents totaled approximately $4.8 billion at the end of the March quarter, which was a decrease from $6.2 billion at the end of the December quarter. The decrease was primarily driven by capital return activities, the debt paydown, as well as capital spending.

[Douglas Bettinger, EVP and CFO at Lam Research]

Days sales outstanding was 64 days in the March quarter, an increase from 59 days in the December quarter. Inventory turns improved to 2.9 times from 2.7 times in the prior quarter. These were our highest level of inventory turns in over four years. As a company, we remain focused on our strong asset utilization and return on invested capital. We're pleased with the sustained performance we continue to deliver here.

[Douglas Bettinger, EVP and CFO at Lam Research]

We will be managing our inventory and supply chain to align with the growing demand that we see in front of us. Non-cash expenses in the March quarter included approximately $97 million in equity compensation, $103 million in depreciation, and $13 million in amortization. Capital expenditures in the March quarter was $332 million, which was up $71 million from the December quarter. Spending was higher to support the strong demand environment that we're seeing.

[Douglas Bettinger, EVP and CFO at Lam Research]

Investments are enabling a 2nd manufacturing facility in Malaysia, as well as lab-related investments in the United States and Taiwan. Looking forward, we continue to expect capital expenditure to be in the 4%-5% of revenue range. We ended the March quarter with approximately 20,600 regular full-time employees, which was an increase of approximately 900 people from the prior quarter. Headcount increases were primarily within the manufacturing and field organizations to support volume growth, as well as in R&D to support our long-term product roadmap. As we scaled the organization, we also undertook a small workforce optimization focused on efficiency. You'll see this in our non-GAAP reconciliation.

[Douglas Bettinger, EVP and CFO at Lam Research]

Let's turn to our non-GAAP guidance for the June 2026 quarter. We're expecting revenue of $6.6 billion ±$400 million. Gross margin of 50.5% ±1 percentage point.

[Douglas Bettinger, EVP and CFO at Lam Research]

We're expecting this expanding gross margin despite slight headwinds that we're seeing from customer mix. We're forecasting operating margins of 36.5%, plus or minus one percentage point. Finally, we're forecasting record earnings per share of $1.65, plus or minus $0.15, based on a share count of approximately 1.255 billion shares. Let me wrap up. We're executing well against our financial objectives and driving operational efficiency while increasing R&D investments to extend our technology leadership. With our expanding installed base, the strength of our product portfolio, and our disciplined approach to capital allocation, we remain confident in Lam's setup for continued outperformance. Operator, that concludes our prepared remarks. We would now like to open up the call for questions.

[Operator]

We will now begin the question and answer session. To ask a question, you may press star, then 1 on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then 2. Please limit yourself to 1 question and one follow-up. Our 1st question comes from Timothy Arcuri with UBS.

[Timothy Arcuri, Managing Director at UBS]

Thanks a lot. Doug, I wanted to ask about gross margin. The guidance is great. It's 50.5%. Sounds like despite mix being against you're kind of already at your target model, right? Because you were saying above 50%, and I'm not asking you to update that model, but can you deconstruct how you got here so fast? And maybe also, I think people want to hear how much capacity you have. I know you mentioned that you're adding another site in Malaysia. Can you just speak about what the puts and takes are going to be on margin going forward?

[Douglas Bettinger, EVP and CFO at Lam Research]

Yeah. No, Tim, it's a great question. I think we're pretty pleased with where we're at from a gross margin standpoint. It's been a lot of real hard work from the company, honestly. I think you'll remember, I don't know, 4 or 5 years ago, we talked about expanding our factory footprint to be closer to where our customers were. That has delivered efficiencies from just a proximity standpoint, from shorter freight logistic lanes, from slightly lower cost from a labor standpoint, a better supply chain setup, all of those things. Those were self-help activities that we undertook, and frankly, we've delivered on it.

[Douglas Bettinger, EVP and CFO at Lam Research]

When I think about the global operations part of the company, they've really done a wonderful job. On top of that, we're working on everything we can do to get paid for the value we're delivering to customers.

[Douglas Bettinger, EVP and CFO at Lam Research]

That's something we're always doing, and I think we're doing a reasonably good job with that, Tim. Anyway, when you put all of that together, I think we're pretty pleased with all of that, and I'll let Tim add a few things here.

[Tim Archer, President and CEO at Lam Research]

Yeah, no, I was just going to add one other part that's pretty important and showing up as very important in this constrained period, which is the performance of our tools. Doug talked about some of our higher R&D spending. A lot of that was to ensure that all of these new tools that we have hitting the field enter at a level of maturity that's beyond what we had probably delivered in the past. That's very important for our customers in a period of fast ramp. That also yields benefits for us in terms of installation and warranty spending, which flows through to gross margin. You're seeing some of that as well. That's something that, again, we're focused on going forward, is reliability of systems, maturity of tools as they hit the fabs.

[Douglas Bettinger, EVP and CFO at Lam Research]

Let me just add one more thing.

[Tim Archer, President and CEO at Lam Research]

Please go on.

[Douglas Bettinger, EVP and CFO at Lam Research]

Yeah, let me add one quick thing. I know there's going to be a question on everybody's mind. Hey, how should I model gross margin for the rest of the year? I would encourage you to kind of keep it roughly in the levels that we just guided you to in June. This is going to kind of level out at where it's at, I think, for the rest of the year. As you build your models, keep that in mind.

[Timothy Arcuri, Managing Director at UBS]

Awesome, Doug. Thanks. I guess just as a follow-up.

[Douglas Bettinger, EVP and CFO at Lam Research]

Yep.

[Timothy Arcuri, Managing Director at UBS]

There's been a big, massive new fab project. You guys have obviously seen this news, bigger than anything we've ever seen before. I'd think that this customer would have to get in the queue, given how booked out things are. I don't want to ask just about that one customer, but are you seeing signs of these huge new fab projects, sort of the customer base expanding? If you did want to comment on that particular fab project, if they're sort of coming to you as a new opportunity, that'd be great.

[Tim Archer, President and CEO at Lam Research]

Yeah, obviously, we can't comment on any specific customer. Clearly the environment right now is such that there's just not enough compute, there's not enough memory in the world, and people are worried about supply. I don't think it's a surprise that more companies around the world will start to enter into the semiconductor space. That's why when we talk about the longer-term outlook, it's a combination both of increased demand, but really increased demand at some of the most compelling leading-edge opportunities that are presented to Lam. I think when we talk about WFE, there's only so much that can be executed in this year. Again, you see a lot of these projects starting to line up that I think represents opportunity in the future.

[Douglas Bettinger, EVP and CFO at Lam Research]

Thanks, Tim.

[Operator]

Our next question comes from C.J. Muse with Cantor Fitzgerald.

[C.J. Muse, Senior Managing Director, Semiconductor Analyst at Cantor Fitzgerald]

Good afternoon. Thanks for taking the question. I just wanted to touch on your commentary around 2027 visibility. Can you kind of speak to your discussions, conversations exceeding 18, 24 months, whether you're starting to see real slotting and desire to lock in time frames for delivery? I guess as part of that, how are you kind of working your supply chain for readiness for that ramp?

[Tim Archer, President and CEO at Lam Research]

Yeah. Clearly we're about halfway through 2026, and so given our lead times, of course, we're having conversations with customers about 2027. In some cases, for planning purposes, like getting resources ready, engineers hired and trained in the right locations, some of those conversations even extend beyond that. We have customers who clearly announced fabs with openings in 2028. There's no reason not to start having conversations with them about what the tooling is that's going to be required based on the node that we run, kind of the size, the resourcing requirements.

[Tim Archer, President and CEO at Lam Research]

I'd say we're in various stages of those conversations. The more visibility we have, the better we can get our supply chain and our own capabilities ready.

[Tim Archer, President and CEO at Lam Research]

I think it is a case where today our view on WFE, as I said, for 2026, really has a lot to do with what we believe can be executed. We talked about this upward bias. We're working a lot with customers on near-term constraints, things they can do within their existing fabs, at the same time preparing for those new fab openings and true kind of greenfield shipments as they roll out later this year and through next year.

[Douglas Bettinger, EVP and CFO at Lam Research]

Yeah, C.J., I'd just add, it feels like it's setting up to be a pretty good year in 2027 right now based on what we can see.

[C.J. Muse, Senior Managing Director, Semiconductor Analyst at Cantor Fitzgerald]

Excellent. Maybe a question on CSBG. Obviously, tremendous focus on trying to get every bit out the door in this very tight environment. Curious if kind of the upgrade business that you're seeing is sustainable, and is there kind of work that we should be thinking about for full calendar year 2026 revenue growth in that bucket? Thank you.

[Douglas Bettinger, EVP and CFO at Lam Research]

Yeah, C.J., no, it's a great question. Listen, I think we're feeling really good about CSBG. Industry utilizations are high, so spares was quite strong in March. Service was quite strong in March. Tim talked about the new Equipment Intelligence and cobots that we're rolling out. We're excited about that. Our customers are excited about that. When you see how strong it was in March, I think it popped up. I think it's going to kind of sustain roughly at these levels as we go through the remaining quarters in the calendar year, maybe up a little bit.

[Tim Archer, President and CEO at Lam Research]

I think we're feeling pretty good about the strength that we're seeing here. Frankly, we're innovating here too, so I think we feel pretty good.

[Operator]

Our next question comes from Harlan Sur with JPMorgan.

[Harlan Sur, Head of U.S. Semiconductor and Semiconductor Capital Equipment at JPMorgan]

Hey, good afternoon. Thanks for taking my question. When I speak with the process development and integration engineers, obviously of your customers, they're very focused on next generation technologies and architectures, and that's what we hear on these calls, right? How Lam is enabling 3D device architecture, cell structures, driving high aspect ratios, new materials, et cetera. But then when we speak with the manufacturing and operations teams, it's a very different focus, right? And the vocabulary set is very different. It's all about throughput, uptime, defectivity, overall fab cycle time, right? And especially with the tight supply situation and constrained clean room space environment that we're in today, any incremental improvement in high volume productivity could unlock literally millions of dollars of incremental wafer output.

[Harlan Sur, Head of U.S. Semiconductor and Semiconductor Capital Equipment at JPMorgan]

You've talked about things like the Dextro cobot, but any other enhancements that you're driving, Tim, to the install base on productivity and manufacturability, and more importantly, how are you guys monetizing this? I assume it's maybe primarily services and upgrades.

[Tim Archer, President and CEO at Lam Research]

Yeah. It is a 2-focus world, as you talked about, and the good news is we've got the company organized in a way that we can focus on both with significant intensity. Clearly leading edge, being in front of those inflections a number of years, we said sometimes it's 5, 6, 7 years you're working with a customer in advance of that node ever reaching production. At the same time, especially in the environment we're in right now, production output, uptime, yield, those things are really what are most critical to customers in the immediate term.

[Tim Archer, President and CEO at Lam Research]

Plus, I would say really identifying the bottleneck tools within the customer that's limiting output and helping them with those workstations.

[Tim Archer, President and CEO at Lam Research]

Equipment Intelligence, if you think about what it does is it allows us to look at massive amounts of data coming from our tools on every single wafer, and that shortens troubleshooting time if there is a problem with the tool. It helps us with the time to ramp those tools, either on a new process or as they start up. It helps us to match tools better, tool to tool, chamber to chamber. All those things can lead to those tiny little improvements in yield that really do matter for the customer.

[Tim Archer, President and CEO at Lam Research]

On the Dextro Cobot, we've talked about the fact that at some customers, the precision and repeatability of the maintenance has actually yielded improvements in both output and yield. It does that through better 1st time right. You do the maintenance, it comes back up and is back into production more quickly.

[Tim Archer, President and CEO at Lam Research]

Just the improved repeatability of let's say, the new part placement inside the chamber, actually has had some positive impact on the yield. That's something we're really focused on. How do we monetize it? Yeah, it's through services, and obviously in some cases, new tool sales.

[Harlan Sur, Head of U.S. Semiconductor and Semiconductor Capital Equipment at JPMorgan]

Yeah. Okay. Thank you. I appreciate that. For Doug, your OpEx grew 5% sequentially in the March quarter. Implied OpEx growth in June is 7%.

[Harlan Sur, Head of U.S. Semiconductor and Semiconductor Capital Equipment at JPMorgan]

Given the leverage, it's allowing you to actually exceed your long-term operating margin targets of 35%. How should we think about the OpEx growth through the remainder of this year? I guess, when is the team going to update its long-term targets? As the year unfolds on more revenue growth, you're clearly going to drive margins above the 36.5% operating margin range that you guided to for June, right? When is the team contemplating updating its long-term targets? Thank you.

[Douglas Bettinger, EVP and CFO at Lam Research]

Yeah, no, Harlan, it's a great question. 1st, let me talk about the spending trajectory for the year. Listen, I think at the end of the day, this management team likes to see the top line growing faster than spending so that we can deliver leverage, and that's absolutely how we're thinking about things this year. Having said that, we're going to grow spending this year because frankly, we can afford to do so, and we have some things that I think are quite innovative that we've been thinking about that we wanted to put a little more money towards. We're going to do that. We've decided we're going to do that this year.

[Douglas Bettinger, EVP and CFO at Lam Research]

Yeah, we're talking internally about the fact that we're above the previous model that we gave, and yeah, I know we need to give you an updated framework, and we will do that later in the year. We haven't bottomed out on exactly when or exactly how we're going to do it, but we know we need to, and we will be doing that, Harlan.

[Operator]

Our next question comes from Atif Malik with Citi.

[Atif Malik, Semiconductors, Hardware and Networking Equipment Analyst at Citi]

Hi, thank you for taking my question. My question is on the NAND market. It seems like near term, NAND is still low, like 12% of sales, but something has changed versus 90 days ago. You guys are talking about NAND growing through the year and the pull forward in the $40 billion number. What has changed in the NAND market? Are you seeing signs of capacity additions or what has changed? Maybe it's KV Cache.

[Tim Archer, President and CEO at Lam Research]

Yeah. We didn't mention KV Cache, but I think it's a good example of exactly what I was referring to when I talked about its increasingly important role in the AI memory hierarchy. Clearly there is increased demand for NAND coming from AI data centers, and that's helpful. Also, if you think of the, on a relative basis, somewhat under-investment in that area, partly as customers made choices about clean room allocation and obviously, some other devices like HBM were so hot during that period. Also going back to what we said early last year, the installed base had gotten a little bit behind in terms of the state-of-the-art technology.

[Tim Archer, President and CEO at Lam Research]

Most of the installed base at that time, early 2025, about 2/3 of it was still running in the 1XX 100-plus layer technologies.

[Tim Archer, President and CEO at Lam Research]

Really, when you need to get those incremental bits out, now you need to be 200 layer plus. That's what's caused this acceleration as you need more bits, you need those bits to be more capable. You need QLC to meet AI data center demands. You've started to see the push for accelerated conversions in the technology, and that's what's caused a lot more activity in the NAND space.

[Tim Archer, President and CEO at Lam Research]

As people push forward, we then also said, "Look, the conversions are going to happen because that's the quickest way to get to the higher capability. You'll also need greenfield because those technology improvements, like in Lam's case, to go above 200 layer, we talked about the number of new tools you need to add to manage the complexity of higher layer count stacks.

[Tim Archer, President and CEO at Lam Research]

That in and of itself reduces total wafer output capacity of the industry. Eventually you need to add greenfield back to continue to get the big growth you need. That's the reason we've started talking about it, is it's materializing as a significant opportunity now on the revenue side for Lam, and looks to be so for quite some time.

[Atif Malik, Semiconductors, Hardware and Networking Equipment Analyst at Citi]

Thanks, Tim. Doug, you talked about customer down payments at the lowest level in four years, and you're also talking about WFE growing in next year. Can you reconcile those 2 comments?

[Douglas Bettinger, EVP and CFO at Lam Research]

I guess what I would tell you, Atif, is the group of customers that generally provide the down payments aren't the ones that are growing the quickest, and that's absolutely what we're seeing going on right now. Thanks, Atif.

[Operator]

Our next question comes from Melissa Weathers with Deutsche Bank.

[Melissa Weathers, Director, Equity Research at Deutsche Bank]

Hi there. Thanks for letting me ask a question. I had a more thematic question, maybe forTim or Doug, if you want to take a stab, you can too. We've heard a lot about reasons why this memory cycle is different with HBM and trade ratios and new applications like SoCAM. It does seem like AI is driving memory bit demand growth a lot faster than what we've seen historically.

[Melissa Weathers, Director, Equity Research at Deutsche Bank]

I guess, do you ascribe to the view that this memory cycle is, I won't say the D word, but there's a change this time around? What kind of actions are you taking to de-risk the cyclical side of things, while still being able to capture the upside?

[Tim Archer, President and CEO at Lam Research]

Okay. Well, it's a great question and maybe I won't use the D word either, but I think it's different for Lam in that, and there was an earlier question that talked about how so many of these new devices have different architectures, 3D scaling. I think the most important thing about this memory cycle is it is a cycle in which you're seeing dramatic improvement and change in the etch and dep intensity. The complexity of 3D scaling has created a lot of new opportunities for Lam.

[Tim Archer, President and CEO at Lam Research]

That is driving both SAM expansion plus share gain for us through those new applications. I feel like compared to prior upturns in memory, we are and we're doing even better just because of that extra layer of etch and dep intensity scaling.

[Tim Archer, President and CEO at Lam Research]

How do we prepare if there is ultimately that peak? Which we're certainly not calling right now given the tremendous demand that's out there. We operate very flexibly. Doug talked about a lot of our operational investments we've made. In many cases, some of the things we've talked about, Dextro Cobots, Equipment Intelligence, these are all kinds of capabilities that in many ways allow us to support our customers without so much of the fixed cost scaling that we had to make in the past.

[Tim Archer, President and CEO at Lam Research]

We always have an eye on what's it going to look like if the business were to slow down. I think if you look at our track record in those periods, we've also outperformed.

[Douglas Bettinger, EVP and CFO at Lam Research]

Melissa, maybe I'd just add, the way I'm looking at this right now is memory is just so critical in all of these accelerated compute architectures. To feed the parallel compute, you need just data coming in to keep the machine going. The criticality of it maybe is more than it's ever been from my point of view. I observe, maybe I'll use a different D word, disciplined investment, right? Everybody likes profitability that they're generating right now. Everybody is just kind of plugging into where demand is, and I think that's a good thing for all of us in the industry.

[Operator]

Our next question comes from Srinivas Pajjuri with RBC Capital Markets.

[Srinivas Pajjuri, Analyst at RBC Capital Markets]

Thank you. My question is on China. Doug, I think your comment about prepayments being down. I'm guessing that's related to China. Can you talk about what you're seeing in terms of the demand environment in China? As you go through the next few quarters, what's your expectations?

[Douglas Bettinger, EVP and CFO at Lam Research]

Yeah, I think Srini, what we described a quarter ago is still the way I would describe it this year. I think WFE in China is flattish year-over-year from 2025 - 2026. Maybe it's up a little bit. You're just seeing so significant growth from the global multinational set of customers that China as a percent of the overall revenue is coming down. The other dynamic in China is you're starting to see some of the global multinationals in China spending a little bit more too. When you look at that overall geographic distribution in China, it's also broadening out in that regard.

[Douglas Bettinger, EVP and CFO at Lam Research]

Yeah, you're right about the fact that down payments are down. Down payments tend to come from smaller customers, and a lot of them are in the China region. Those 2 things are correlated together.

[Srinivas Pajjuri, Analyst at RBC Capital Markets]

Okay, great. My next question is on the CSBG. Obviously, I think it grew in a double-digit pace for the last several years. I think last quarter, if I recall correctly, I think you were expecting high single digits because of the Reliant slowdown here. It does feel like the clean room issue is not going to get resolved. Demand is very strong. My question is, are you seeing any acceleration in terms of your services and spares business? Is this something structural in your view going forward?

[Douglas Bettinger, EVP and CFO at Lam Research]

Listen, Srini, and I'll let Tim comment after I give you a little bit of data. What drives a lot of spares and service, frankly, is utilization in the overall industry. Utilization right now and in the March quarter is very, very high. A lot of the growth, or at least contributing to some of the sequential growth in CSBG, was the uptick in spares and service from that utilization. I don't know that utilization can get any higher than it is. Frankly, it's pretty full out right now. When you think about growth sequentially over the next couple of quarters, those components of CSBG are probably kind of plus or minus where they are. Now, Tim talked about advanced service and cobots and AI. That layers on top of that to a certain extent.

[Douglas Bettinger, EVP and CFO at Lam Research]

Also, if you think about what's going on in mature node spending, a lot of that is what drives Reliant, and that's flattish this year. The real growth is coming from stuff at the leading edge, which we're really benefiting from the move to etch and deposition intensity. Anyway, that's just a few things to think about relative to CSBG. Anything you'd add, Tim?

[Tim Archer, President and CEO at Lam Research]

No, not really. I would just point out that when you're trying to work on constrained workstations within a fab, again, this is where things like the Equipment Intelligence, how to get those tools up faster to production, there's a lot of focus on that. That's the short-term prove out, and I think that long-term, that then has a real benefit because once the value has been seen in this kind of constrained environment, I think that it'll be more likely that new fabs get built with all of those intelligent services and automated maintenance capabilities built in right from the start.

[Tim Archer, President and CEO at Lam Research]

Operator, next question, please.

[Douglas Bettinger, EVP and CFO at Lam Research]

Thanks, Srini.

[Operator]

Next question comes from Vivek Arya from Bank of America.

[Vivek Arya, Managing Director, Equity Research at Bank of America]

Thanks for taking my question. Tim, many of your memory customers are talking about long-term contracts, LTAs, pricing arrangements, and whatnot. How is that translating into your visibility and pricing power? Should we expect customers to start putting down payments to secure your capacity also? If not, why not?

[Tim Archer, President and CEO at Lam Research]

Well it's a good question. I would say that it's translated into a longer visibility for us. As I mentioned in an answer earlier, clearly we're having conversations with customers now at around the time that they're starting to construct these fabs, which means we have much longer visibility. I think the most important thing there is to be ready with the resources that are needed and our own capacity to be needed to support those shipments. I would say, we're working with customers today short term in their existing fabs.

[Tim Archer, President and CEO at Lam Research]

We're working with them with these long-term fab plans and being ready. In many ways, that's allowing us to be more efficient. Doug talked about discipline build-out in our operational capabilities, our manufacturing, our supply chain.

[Tim Archer, President and CEO at Lam Research]

I would say that it is translating into financial benefit for Lam as well by having those longer visibility conversations.

[Douglas Bettinger, EVP and CFO at Lam Research]

Vivek, I mean, listen, we're having very long-term conversation with customers, but we don't need down payments. We generate ample free cash flow from the business we run. The commitments we're going to get from customers are important and significant, and they're happening certainly, but it doesn't require down payments from us.

[Vivek Arya, Managing Director, Equity Research at Bank of America]

All right. I guess maybe the subtext of my question is the gross margins that you're seeing, the 50.5%, how durable are they? Let's say if memory pricing goes down next year, for whatever reason, do you still think these gross margins are sustainable and maybe you can even expand from these? Do you think these gross margins are because the industry is so tight today? I'm not asking for a gross margin forecast per se. I'm just trying to understand that if your customers are getting assurance of their pricing, is there anything Lam can do to help get assurance around your pricing and the sustainability of your margins over the next 1-2 years?

[Tim Archer, President and CEO at Lam Research]

Yeah. Obviously, we're not going to give you a gross margin forecast longer term, but I think that what you can see and what we've said is we have been building the gross margin improvement in our company around fundamental capabilities, either our own, through our own operational efficiency, or through the value that our equipment delivers. That can be technically as the manufacturing becomes more complex, it can be the unique capabilities our tools provide from a technical or a productivity perspective. We have moved at a pace where we feel like the improvements we're making are sustainable because they're rooted in real value or real efficiency.

[Tim Archer, President and CEO at Lam Research]

They're not leveraging the opportunity, and they're not transactional in nature. They're really founded in fundamental value delivered to the customer.

[Tim Archer, President and CEO at Lam Research]

When I talk about things like cobots, for instance, the value of a cobot is rooted directly in the value being delivered to the customer through better uptime, better yield, and we get paid for that. I think those types of things are sustainable. When we deliver technology that enables the move to the next technology node, we think those are sustainable regardless of the cycle, because it is delivering value to the customer. We're in this for the long term with our customers, and that's the way we look at all of this.

[Douglas Bettinger, EVP and CFO at Lam Research]

Thanks, Vivek.

[Operator]

Our next question comes from James Schneider with Goldman Sachs.

[James Schneider, Senior Research Analyst at Goldman Sachs]

Good afternoon. Thanks for taking my question. I was wondering if you could maybe comment on, in terms of the WFE uptick you expect, which of the product areas do you expect the most kind of incremental leverage? Is it kind of split across all of them? You talked about advanced packaging, but which was driving the most upside to the overall spending envelope this year, do you believe? And is that being driven mostly by early fab clean room pull-ins or something else? Thank you.

[Douglas Bettinger, EVP and CFO at Lam Research]

Yeah, Jim, I'll comment. If Tim wants to add, I'll let him do that. I think the reality of it is everything is a little bit stronger. I think everybody in the industry is working on finding little bits of clean room that they've been able to just accelerate to a certain extent. Demand has always been there. Demand is as strong as I can remember it, frankly. It was strong 90 days ago. It continues to be maybe even a little bit stronger right now, and everybody found a little bit more clean room, and so they were able to take a little bit more equipment. Do you have a follow-up, Jim?

[Operator]

Our next question comes from Stacy Rasgon.

[Stacy Rasgon, Managing Director and Senior Analyst at Bernstein Research]

Hi, guys. Thanks for taking my questions. For the 1st one, I wanted to push a little bit more on the services growth. I understand the drivers around utilization topping and the Reliant weakness. You also talked about the $40 billion in upgrade spending pretty much all happening by the end of 2027. I don't get the feeling that we've had tens of billions of that upgrade spending happening already, so it almost feels like we should have tens of billions of upgrade spending happening between now and the end of next year.

[Stacy Rasgon, Managing Director and Senior Analyst at Bernstein Research]

From what I understand, I thought that all goes into your services business. Why shouldn't that be a pretty big driver of services growth, I guess, between now and the end of 2027?

[Douglas Bettinger, EVP and CFO at Lam Research]

Yeah. Stacy, I would point out a couple things to you. In that $40 billion number, yeah, there's upgrades for sure, but there's also new equipment purchases, right? There's some new things. When you upgrade the installed base, you need to buy new equipment to break bottlenecks and constraints.

[Douglas Bettinger, EVP and CFO at Lam Research]

There's also some new equipment as the industry moves to Molybdenum. It's not all just upgrades. The other thing I would say relative to upgrades is upgrades were actually quite strong last year in 2025, and are going to continue to be for the next year or 2. That's part of the upgrade story. Then the other components, like I said, spares and service. It's already pretty darn strong in March.

[Douglas Bettinger, EVP and CFO at Lam Research]

Frankly, Reliant, with the mature node spending being a little bit softer than everything else, that's the puts and takes to get you to kind of quarter by quarter, plus or minus flattish as you go through the rest of the year.

[Stacy Rasgon, Managing Director and Senior Analyst at Bernstein Research]

Okay, that makes sense. If I could ask a follow-up. You guys are seeing WFE growing this year on the order of, what, $30 billion? Like you said, $110 billion last year to now $140 billion plus this year.

[Douglas Bettinger, EVP and CFO at Lam Research]

Yep.

[Stacy Rasgon, Managing Director and Senior Analyst at Bernstein Research]

That's very strong, but as strong as it is, as you know, it is a constrained growth because of clean rooms. Those clean rooms start to come online into next year. Does that suggest to me that the sequential growth of WFE next year ought to be even stronger on a dollar basis than it is in 2026? Because you'll have somewhere to actually put the tools, whereas you don't really have that this year. What's wrong with that logic? How would you push back on that?

[Douglas Bettinger, EVP and CFO at Lam Research]

I don't know, Stacy. I'm going to decline to comment on the exact magnitude of WFE next year, but we do firmly, as we sit here today, look at clean rooms are going to be more available next year. Where we believe demand to be, WFE is going to be nicely growing next year. It's too soon for us to give you a number, but we feel pretty good about the growth trajectory into next year.

[Tim Archer, President and CEO at Lam Research]

Yeah. I'd also point out that every year that goes by, as technology advances, etch and deposition intensity rises. As those new clean rooms come on and they're targeting more advanced technology nodes, that's certainly better for Lam's position within whatever that the term I used, compelling WFE growth is.

[Douglas Bettinger, EVP and CFO at Lam Research]

Thanks, Stacy.

[Operator]

Our next question comes from Krish Sankar with TD Cowen.

[Krish Sankar, Managing Director and Senior Research Analyst at TD Cowen]

Yeah. Hi, thanks for taking my question. I just want to follow up on an earlier question on the upgrade to the WFE numbers, the $135 billion going to $140 billion plus. Is there a way to segment? Was the bigger driver NAND? Was it CPU tightness, or was it just AI strength?

[Douglas Bettinger, EVP and CFO at Lam Research]

Again, Krish, what I said is everything got a little bit stronger because everybody got a little bit more clean room. It's not any one component of the customer base. Everything is just a little bit better.

[Krish Sankar, Managing Director and Senior Research Analyst at TD Cowen]

Got it. As a quick follow-up, it looks like the 3rd-party market share data came out, and you folks gained share in PECVD quite a bit last year. I'm curious, which vertical drove that PECVD share gain? Was it DRAM or foundry or logic or something else?

[Douglas Bettinger, EVP and CFO at Lam Research]

You want to take that one, Tim, or you want me to?

[Tim Archer, President and CEO at Lam Research]

Sure. Go ahead, Doug.

[Douglas Bettinger, EVP and CFO at Lam Research]

Listen, I think PECVD is such a broad, pervasive tool. It shows up in every component of the customer base. One area I think that sometimes is underappreciated is the use of PECVD in underfill and advanced packaging, honestly, and that was a key contributor. Tim talked about we see packaging this year growing 50%. We talked about real strong growth last year. PECVD benefited from that, obviously.

[Tim Archer, President and CEO at Lam Research]

Yeah. I think PECVD also shows up. It's challenging because you think about the old traditional PECVD applications, but even as I mentioned, as we move forward in NAND, for instance, even like our VECTOR DT backside stress management actually is a PECVD application.

[Douglas Bettinger, EVP and CFO at Lam Research]

Mm-hmm.

[Tim Archer, President and CEO at Lam Research]

In many ways, it's such a pervasive technology. We see that improvement in PECVD.

[Operator]

Our next question comes from Joe Quatrochi with Wells Fargo.

[Joe Quatrochi, Senior Technology and Services Analyst at Wells Fargo]

Yeah. Thanks for taking the questions. I was wondering if you could talk a little bit just about where your lead times sit today, and then also, I think you talked about the 2nd Malaysia factory opening. When is that ramp, and can you remind us what is the size of that relative to, I think it was a pretty large 1st facility that you have, like 700,000 sq ft?

[Douglas Bettinger, EVP and CFO at Lam Research]

Yeah, Joe. 1st thing, we don't specifically put numbers around our lead times, but they are stretching out a little bit as demand is obviously quite strong. Things are stretched out. We're not going to give you a number, though. 2nd, the 2nd Malaysia facility will come out in the H2 of the year. Yep, you're right, the 1st one was our largest factory in the network.

[Douglas Bettinger, EVP and CFO at Lam Research]

This will be nearly the same size or maybe approximately the same size as the 1st one. It'll give us the opportunity to scale into the next year's demand, I think.

[Joe Quatrochi, Senior Technology and Services Analyst at Wells Fargo]

That's helpful. I'm just curious, I was wondering if you could talk a little bit about just your position for High Bandwidth Flash and just any thoughts around that. What does the SAM potentially look like for you guys there?

[Douglas Bettinger, EVP and CFO at Lam Research]

I'll let Tim take that one.

[Tim Archer, President and CEO at Lam Research]

Well, I think in any of these cases where you are talking about device architectures that require 3D scaling, obviously our SAM opportunity just grows. I think these devices and the exact process flows and such are still being worked through. The types of systems we have, whether it's high aspect ratio conductor etches, high aspect ratio dielectric etches, the depositions, ALD, it'll be a great opportunity for us when it comes to fruition.

[Douglas Bettinger, EVP and CFO at Lam Research]

Operator, I think we have time for one more question.

[Operator]

Our next question comes from Vijay Rakesh with Mizuho.

[Vijay Rakesh, Senior Analyst at Mizuho]

Hi, Tim and Doug. Just a quick question on the DRAM side. Looks like it grew pretty nicely, up 45% year-on-year. When you look at HBM3 going to HBM4 with the higher layer count, I think 50% higher, is there a way to look at what your content uplift is per 100,000 wafers or something as HBM3 goes to HBM4 or 40? I have a quick follow-up.

[Douglas Bettinger, EVP and CFO at Lam Research]

Yeah, Vijay, maybe I'll come in and then maybe let Tim talk about the technology. Yeah, clearly, it goes up. We haven't given specific numbers around it, but obviously the higher stack requires more equipment. The trade ratio gets a little more challenging for the industry, so you clearly need more equipment. We haven't given a specific number on it, though, in terms of $ per 10K.

[Vijay Rakesh, Senior Analyst at Mizuho]

Got it. Just on the follow-up on HBF, are you seeing both SanDisk and SK Hynix talking about it, I guess. Outside of that, when you look at High Bandwidth Flash, are you seeing investments of CapEx ticking up there? Is that something you're seeing into 2027? How would you look at that ramp? Thanks.

[Tim Archer, President and CEO at Lam Research]

Yeah. I'd probably leave it to our customers to talk about their timing on these kinds of new technologies. As I mentioned earlier, on any new technology, we're engaged with customers quite well ahead from a technology perspective of any production ramp, and then it's very much up to them the time of insertion. The one thing that's true, and we talked about it, is that these are being driven by the growing importance of NAND as we see it within the AI memory hierarchy.

[Tim Archer, President and CEO at Lam Research]

Again, we think it's something that, in a matter of time, this kind of capability is likely needed, and Lam Research technology is well supported very well.

[Operator]

This concludes our question and answer session. I would like to turn the conference back over to Douglas Bettinger for any closing remarks.

[Douglas Bettinger, EVP and CFO at Lam Research]

Listen, I think that Tim and I and Ram would just like to thank everybody for your time and attention during what I know is a super busy earnings season. I know we're going to see lots of you as the quarter unfolds at different conferences and roadshows, so we're looking forward to that. Again, thank you for your interest in the company, and we appreciate it.

[Operator]

This conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Participants

Executives

• Douglas Bettinger, EVP and CFO
• Ram Ganesh, VP of Investor Relations
• Tim Archer, President and CEO

Analysts

• Atif Malik, Semiconductors, Hardware and Networking Equipment Analyst at Citi
• C.J. Muse, Senior Managing Director, Semiconductor Analyst at Cantor Fitzgerald
• Harlan Sur, Head of U.S. Semiconductor and Semiconductor Capital Equipment at JPMorgan
• James Schneider, Senior Research Analyst at Goldman Sachs
• Joe Quatrochi, Senior Technology and Services Analyst at Wells Fargo
• Krish Sankar, Managing Director and Senior Research Analyst at TD Cowen
• Melissa Weathers, Director, Equity Research at Deutsche Bank
• Srinivas Pajjuri, Analyst at RBC Capital Markets
• Stacy Rasgon, Managing Director and Senior Analyst at Bernstein Research
• Timothy Arcuri, Managing Director at UBS
• Vijay Rakesh, Senior Analyst at Mizuho
• Vivek Arya, Managing Director, Equity Research at Bank of America