Doug Bettinger
Executive Vice President and Chief Financial Officer at Lam Research
Great. Thank you, Tim. Good afternoon, everyone. And thank you for joining our call today during what I know is a very busy earnings season. Calendar year 2021 was a record year for Lam Research in many respects. We closed the year with revenue at $16.5 billion, which includes record levels of revenue for both our systems as well as our CSBG businesses.
We also delivered an all-time high for earnings per share coming in at $32.46. I think it's important to point out that we had 59% growth in earnings per share over calendar year 2020, which outpaced the growth in revenue, which was at 39%.
We ended the year, however, on a bit of a down point. As Tim spoke about, our revenue came in at the lower end of the guidance range due to supply chain issues that impacted us in the last two weeks of the December quarter. These delays primarily from one supplier for critical parts meant we were unable to recognize revenue for tools that we actually shipped to customers totaling more than $200 million.
You'll notice this reflected in the increased level of deferred revenue on the balance sheet at the end of the December quarter of $1.46 billion. The vast majority of these parts have now shipped and the full value of the tools will revenue in the March quarter.
While we continue to increase the output capacity of our own factories, we're seeing a broadening out of headwinds from the global supply chain, which is impacting the somewhat soft March quarter revenue and gross margin guidance. These headwinds are partially Omicron and labor-related, partially supplier scaling related and partially due to freight and logistics constraints. Our expectations are that the broader supply chain issues in the industry will persist for a while and we'll exit the March quarter with incremental supplier shipment delays, potentially causing another growth of as much as $500 million in deferred revenue.
I would just highlight that we often ship equipment to our customers on a modular basis, which accelerates deliveries and allows customers the ability to begin installation while waiting for the fully configured tool. As we get our suppliers caught up with our needs and these missing components ship, these tools will revenue in future quarters. This is obviously a fluid situation right now.
Let me now turn towards the details of our December quarter results. Revenue for the quarter came in at $4.23 billion, a slight decrease from the September quarter but an increase of 22% from the same quarter a year ago. From a segment perspective, Memory represented 58% of systems revenues in the December quarter, down from the prior quarter level which was 64%. The strength in Memory during the quarter was driven by investments in the DRAM segment, which increased both in terms of dollars as well as percent concentration at 23% of systems revenue versus 19% in September quarter and 10% in the June quarter.
The DRAM investments were primarily focused on the 1z and 1-alpha nodes. The NAND segment was 35% of our systems revenue versus 45% in prior quarter. We're seeing both capacity additions as well as conversions across our NAND customers with investments in 128 to 192 layer devices. We expect we'll continue to see a blend of additions and conversions as we go through calendar year 2022.
Broad demand across both leading-edge and mature device nodes drove continued strength in the Foundry segment with the December quarter representing 31% of our systems revenue versus 25% in the September quarter. Multiple customers are investing in this segment to meet any demand drivers such as AI, IoT, cloud and 5G, which is leading to significant unit growth and more silicon content in most technology devices.
We had another record quarter of system revenue dollars in the Logic and other segment, which contributed 11% of systems revenue in the December quarter, which was consistent with the concentration in the prior quarter. Our customers are investing to meet the demand requirements in the market for microprocessors, image sensors and heterogeneous silicon packaging technologies.
Now let's switch to the regional composition of our total revenue. The China region came in at 26% of total revenues and while being the top region for December, it was down from the 30% plus levels we've seen for the last few quarters. This was an expected outcome and is related to the timing of customer investments.
China domestic customers were the majority of the China regional revenue in the December quarter. The Korea and Taiwan regions also had solid investment activity representing 25% and 18% of revenues respectively in the December quarter. The revenue for our installed base business, CSBG, was nearly $1.5 billion, which was 29% higher than the December quarter and calendar 2020 and approximately 8% higher sequentially.
The continued strength of CSBG reflects a growing installed base of tools, customers operating at high utilization levels as well as our ability to monetize the growing installed base by offering more value-added advanced service solutions. Each sub-segment of CSBG hit a new record in the quarter, but I want to specifically call out our Reliant product line for achieving its 12th consecutive record quarter, delivering value to a growing specialty market across numerous customers. While the CSBG business can have quarterly fluctuations, we continue to see sustained and stable growth on an annual basis.
Now moving on to gross margin. The December quarter was 46.8%, above the midpoint of the guided range. The increase in gross margins came from the favorable customer and product mix due to shipment timing as well as high-field resource productivity due to greater customer installation activity. As we've discussed in the past, gross margins can fluctuate quarter-to-quarter due to overall business levels, along with customer and product mix.
And I would just mention, we've got incremental negative cost impacts from the supply chain constraints that we discussed earlier that are negatively impacting the March gross margin guidance. Operating expenses for December were $627 million, an increase from the prior quarter amount of $586 million. The December quarter had higher variable compensation as we close the calendar year as well as additional research and development investments.
We've added headcount in R&D to support our growing product portfolio and we're focused on supporting our customers' ongoing technology roadmaps. December operating margin came in at 32% or approximately $1.4 billion. Our non-GAAP tax rate for the quarter was 11.9%, generally in line with our expectations.
Looking into calendar year '22, we expect the ongoing tax rate to be in the low teens level. We continue to monitor potential tax changes under consideration in the United States. Given the uncertainty there, we have not yet reflected the impact of any changes in our financial modeling. And as we've discussed in prior calls, our tax rate may fluctuate from quarter-to-quarter.
Other income and expense came in for the quarter at $19 million in income. This amount is better than the prior quarter and resulted in income in the December quarter due to a gain in one of our venture investments that recently raised capital in a public offering. As we've noted in last quarter's earnings call, we did not include the estimated gain of approximately $50 million in our December quarter guidance and the amount in the results that you're seeing was reasonably close to that forecast. This gain added 26% -- excuse me, $0.26 tax adjusted to earnings per share. And I just have you note that overall OI&E is subject to market-related volatility that could cause a difference from our typical run rate.
We continue to buyback shares that focus on capital return and in the December quarter, we repurchased approximately $430 million worth of stock. In addition, we paid $211 million in dividends during the quarter. For the calendar year, we allocated a total of $3.8 billion towards capital return, which was approximately 94% of free cash flow. During 2021, we reduced share count by more than 4 million shares at an average repurchase price of $593 per share.
Diluted earnings per share for the December quarter was $8.53 and the diluted share count balance was slightly lower than the September quarter level coming in at 142 million shares, which was in line with our expectations.
Let me now shift to the balance sheet. Cash and short-term investments, including restricted cash, totaled $5.6 billion, up from the prior quarter level of $4.9 billion. We generated strong cash from operations in the December quarter of $1.4 billion, which was somewhat offset by the capital return activities that I just spoke about.
The sales outstanding was essentially flat coming in at 73 days compared to 72 days in the September quarter. Inventory turns were down slightly from the prior quarter level coming in at 2.9 times, which was pretty much as planned as we've grown inventory to increase the business volume. Non-cash expenses for the December quarter included approximately $63 million for equity compensation, $62 million for depreciation and $20 million in amortization.
Capital expenditures in the December quarter were flat with September, coming in at $138 million. Capital expenditures are mainly focused on expansion activities such as our silicon parts facility in Ohio and the Korea Technology Center that we'll be opening in the first half of 2022. We have 16,300 regular full-time employees at the December quarter -- at the end of the December quarter, which is an increase of approximately 900 people from the prior quarter. Our headcount growth was mainly in the factory and field organizations to support the growing output levels that we're seeing.
Now let's look at our non-GAAP guidance for the March 2022 quarter. We're expecting revenue of $4.25 billion, plus or minus $300 million. As we discussed earlier, the guidance reflects our expectation for a higher level of shipment delays in the March quarter due to broadening out of supply chain constraints we're seeing.
Customer demand is decently stronger than what we can currently supply. Backlog has grown for five consecutive quarters as we exited the December quarter. We're expecting gross margin of 45%, plus or minus 1 percentage point. Our guidance reflects a higher level of spending that we're incurring for managing the execution of the supply chain as well as extra costs to secure critical semiconductor component parts.
As we sit here today, I believe our gross margin will improve as we progress through the year. We're forecasting operating margins of 29.5%, plus or minus 1 percentage point. And finally, earnings per share of $7.45, plus or minus $0.75, based on a share count of approximately 141 million shares. We're widening our ranges out a bit due to the supply chain uncertainties that we've discussed.
As we start calendar year 2022, we are in the strongest investment year in the history of the semiconductor industry. It's important to note that the demand is clearly there. We are dealing with broadening out of supply chain constraints, which we know we're going to fix over time. We're laser-focused on addressing these supply challenges and we're confident that will deliver improvements as we go through the year. We're in solid market share positions. We've gained further traction across all market segments in 2021 and we've got a robust and growing installed base business.
Operator, that concludes Tim and my prepared remarks. We'd like to now open up the call for questions.