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Founded in 1980, Lam Research is a top seller of equipment to semiconductor manufacturers. Its machines are used to produce components critical to the tech industry, including the silicon wafers and the chips that power a variety of electronics. Over time, to keep up with industry innovation, Lam has adapted its equipment to handle increasingly tiny chip designs and ramped up production to meet the growing demand for chips in the AI era.

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Lam Research (LRCX): Company Profile, Stock Price, News, Rankings

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Lam Research

lam research

Good day, and welcome to Lam Research's June Quarter of twenty twenty five Earnings Conference Call. All participants will be in a listen only mode for the duration of the call. After today's presentation, there will be an opportunity to ask questions. To withdraw your question, please press star then 2. Please also note that this event is being recorded today.

I would now like to turn the conference over to Ram Ganesh, Vice President, Investor Relations. Please go ahead.

Thank you, and good afternoon, everyone. Welcome to the Lam Research quarterly earnings conference call. With me today are Tim Archer, President and Chief Executive Officer and Doug Bittinger, Executive Vice President and Chief Financial Officer. During today's call, we will share an overview on the business environment and we will review our financial results for the June 2025 quarter and our outlook for the September. The press release detailing our financial results was distributed a little after 1PM Pacific Time.

The release can also be found on the Investor Relations section of the company's website along with the presentation slides that accompany today's call. Today's presentation and Q and A include forward looking statements that are subject to risks and uncertainties reflected in the risk factors disclosed in our SEC public filings. Please see accompanying slides in the presentation for additional information. 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 slides in the presentation.

This call is scheduled to last until 3PM Pacific Time. A replay of this call will be made available later this afternoon on our website. And with that, I'll hand the call over to Tim.

Thanks, Ram, and good afternoon, everyone. Lam delivered another great quarter. Revenues and profitability came in at the upper end of our guided ranges. Our gross margins exceeded 50% for the first time since the merger of Lam and Novelis and EPS hit a new high for the company. We achieved record foundry revenues driven by strong performance in both gate all around and mature node markets.

And again, our upgrades business grew to a new high, up mid teens percent over the prior quarter as NAND customers migrate to higher layer count, higher performance devices to meet the faster readwrite requirements and greater storage demands of AI applications. In short, we are executing well on the served market expansion and share growth story we laid out at our Investor Day earlier this year. Three d scaling of device and advanced packaging architectures is accelerating growth in etch and deposition intensity. And Lam's new products targeting key technology inflections are winning with customers. Furthermore, in advanced services, Lam is at the forefront of realizing the vision of an autonomous fab.

We are gaining momentum with our equipment intelligence enabled dextro cobots, which provide device makers with an unprecedented level of equipment maintenance precision and repeatability. The result is enhanced tool to tool matching, improved machine availability, lower operational costs, and in some cases, higher yield. In the June, Lam expanded our dextro capabilities to cover three additional tool types, and we are accelerating the roadmap to support more products and more shipments in coming quarters. Turning to the overall market environment for calendar year 2025. We expect wafer fabrication equipment or WFE spending to be in the $105,000,000,000 range, up from our prior view of approximately $100,000,000,000 predominantly due to an uptick in domestic China related spending.

We see non China investments remaining broadly consistent with our prior view. Currently, we expect WFE in the second half of the calendar year to be roughly flat with the first half. Looking forward to 2026, it is still too early to comment on the overall level of WFE spending. However, our strong position in gate all around, advanced packaging, high bandwidth memory and NAND layer conversions, we feel confident that Lam is well positioned to outperform. In 2025, Lam's served available market or SAM is set to expand to around mid-30s percent of WFE due to these industry drivers, and we expect them to work in Lam's favor again in 2026.

Longer term, we are on a solid path to grow our SAM to the high 30% range of WFE by continuing to deliver critical solutions for atomic level device scaling, new materials innovation and advanced packaging integration. The key R and D investments that we've made over the last several years have enabled us to create the broadest, most competitive product portfolio in the company's history, thereby putting us in a strong position to win over 50% share of the incremental SAM over time. I'll share a couple of examples that underscore our early progress toward our SAM expansion and share gain goals. First is our HALO ALD Moly tool, which is ramping at multiple NAND customers this year. We expect Moly adoption to increase broadly as more customers convert NAND capacity to 200 layers and higher in the next few years.

WAM is leading the industry transition to ALD Moly not only in NAND, but also in foundry logic. AI is driving greater transistor performance requirements and in turn, accelerating the inflection to gate all around device architectures. However, below two nanometers, gate all around structures begin to encounter significant resistance capacitance or RC challenges. Narrower transistor contacts in these devices cause greater electron scattering resulting in higher resistance of the deposited tungsten films. Replacing tungsten with molybdenum solves the resistance problem, but the process of depositing this higher performance material is inherently slower and more complex.

This is driving a roughly 3x increase in LAM metal deposition SAM per wafer when transitioning to advanced gate all around nodes. Today, we are the only company with ALD Moly tools already production in foundry logic. And in the June, we secured a key win at another leading foundry customer for their next generation application. As Moly adoption expands across various metal interconnect layers, the flexibility of Lam's unique multi station architecture to execute both plasma and thermal processing in the same chamber enables optimization of process conditions and process step sequencing to meet requirements for different applications and over multiple generations of future logic devices. Another area where we have made strong progress is advanced packaging.

Advanced packaging is critical for scaling system performance to address next generation AI requirements and so far has enabled up to 100% improvement in memory density, four times improvement in bandwidth, and an approximate 40% gain in power efficiency. RAMSAM is growing with greater adoption of next generation packaging architectures for DRAM, CPUs, GPUs, and ASICs used in data centers. In 2021, leading edge foundry logic customers spent just 1% of WFE on advanced packaging. With AI's rapid adoption of advanced packaging, that number has grown more than six times. In the future, we expect end consumer devices like mobile application processors and laptop CPUs to also feature more complex packaging schemes as on device AI becomes mainstream.

We are a leader in the advanced packaging inflection and are leveraging our experience to win more opportunities. For example, Lam has amassed unmatched experience in copper plating hardware design and process technology over the last twenty years. We have by far the largest installed base in the industry and recently achieved a significant milestone of 6,000 installed plating cells. By incorporating our learning from the installed base into improvements in our latest SABER three d system, we are delivering best in class coplanarity, uniformity and defectivity in high volume advanced packaging environments. The experience we have gained at the leading edge is now cascading to additional wins with next tier customers seeking to adopt a proven best in class solution.

SABER three d market share in advanced packaging is expected to grow nearly five points year on year in calendar 2025. Finally, let me pivot to the strong momentum we're seeing with our newest generation etch tools. In NAND, we continue to solidify our leadership in high aspect ratio dielectric etch. Equipped with our cryo process, our VANTEX system recently won a key multi generation etch decision at a major NAND customer. This further confirms our differentiation in both technology innovation and high volume production worthiness in the NAND segment.

Across all device types, our state of the art conductor etch tool, Aqara, is off to a solid start since its launch earlier this year. By combining direct power coupling with Lam's unique plasma pulsing capabilities, Aqara delivers industry leading depth uniformity and profile control that is vital for DRAM scaling. In the June, Akara secured multiple new application wins at a top DRAM maker. So, to wrap up, I'm excited by the breadth of opportunities I see ahead for the company and am encouraged by the outstanding progress our team has already made for the long term goals we communicated at our February Investor Day. Etch and deposition intensity is rising with three d scaling.

Our products are winning in key technology inflections. And as a result, there is tremendous potential for Lam to continue expanding SAM and to grow share at each successive process technology node. Now here's Doug to talk about our quarterly financial performance and the September outlook.

Excellent. Thank you, Tim. Good afternoon, everyone, and thank you for joining our call today during what I know was a busy earnings season. We executed well in the June including delivering a record gross margin percentage of 50.3% in the post Novelis period. These past two quarters represent Lam's highest gross margin percentage since we merged the companies in 2012.

Our June financial results came in above the midpoint of all of our guidance ranges with earnings per share actually exceeding the guidance range. For our 2025 fiscal year, we had record revenue of $18,400,000,000 and gross margin of 48.8%. Our free cash flow generation fiscal twenty twenty five was 29% of revenue and approximately $5,400,000,000 which was also a record for the company in dollar terms. We're delivering on the profitability objectives discussed at our Investor Day earlier this year through a growing top line, favorable mix and strong operational execution. Let's look at the details of our June results.

Revenue came in at $5,170,000,000 which was an increase of 10% from the prior quarter. Their deferred revenue balance at the end of the quarter was $2,680,000,000 which was an increase of approximately $670,000,000 from the March. This was related to customer advanced down payments from several newer customers. From a market segment perspective, June systems revenue in the Foundry segment represented 52% of our systems revenue, an increase from the percentage concentration in the March of 48%. In dollar terms, this level represents a second consecutive record quarter and we also set a new record from a fiscal year perspective.

We benefited from continued momentum processes as well as investments in mature nodes by domestic Chinese customers. Memory was 41% of systems revenue, a slight decrease from the prior quarter level of 43%. Non volatile memory came in at 27% of our systems revenue, which was higher than the March level of 20%. We continue to encourage you to think of NAND investments focused primarily on upgrades, which we anticipate will require an investment of roughly $40,000,000,000 over several years. DRAM declined from March coming in at 14 of systems revenue compared with 23% last quarter.

The decline in the June was related to the timing of certain customer projects. For the 2025 fiscal year, DRAM revenue reached a new record in dollar terms with spending focused on technology upgrades to the one beta and One Gamma nodes enabling DDR5 and LPDDR5. High bandwidth memory was also a key investment area. The Logic and Other segment came in at 7% of systems revenue in the June, slightly lower than the prior quarter level of 9%. Now I'll go through the regional composition of our total revenue.

The China region came in at 35%, an increase from the prior quarter level of 31%. We saw increasing investment from global multinational customers in this region to the highest level since the December 2022. The majority of our China revenue nonetheless continued to come from domestic Chinese customers. The next largest geographic concentration were Korea at 22% and Taiwan at 19% of revenue in the June, both of which were a decrease from 24% concentration in the March. Japan revenue at 14% was a record for Lam in dollar terms.

The Customer Support Business Group revenue in the June totaled approximately $1,700,000,000 consistent with the March, as well as the June of a year ago. We had a third consecutive record quarter for upgrade revenue driven by NAND technology convergence. We also saw strength in our spares business offset by a decline in Reliant Systems. Sitting here today, we do think we will see modest growth in CSBG for the calendar year. Let's look at profitability.

The June gross margin came in at 50.3%, close to the top end of our guided range and improving from the March level of 49%. The increase is tied to a stronger mix and continued progress in our operational efficiencies from our close to customer manufacturing strategy. Operating expenses for the June were $822,000,000 up from the prior quarter level of $763,000,000 This was a bit higher than our original estimate coming into the quarter, primarily due to increased incentive compensation tied to the company's improved profitability. R and D accounted for 69% of total operating expenses. The June operating margin was 34.4% and near the high end of our guidance.

This operating profit represents a record level for Lam in both dollars as well as percentage terms. Our non GAAP tax rate for the quarter came in at 4.8%. As I indicated on the last earnings call, the rate in the June reflects a tax reserve release tied to a statute of limitations expiration. Our estimate for the September is for the tax rate to be back in the low to mid teens range. Other income and expense for the June was approximately $4,000,000 in income compared with $7,000,000 in expense in the March.

The improvement in OI and E was primarily the result of increased interest income tied to a higher cash balance, as well as gains on our venture investment portfolio. As we've talked about in the past, you should expect to see variability in OI and E quarter to quarter. For capital return in the June, we allocated approximately 1,300,000,000 to share buybacks through a combination of open market share repurchases and an accelerated share repurchase program. That ASR will continue to execute into the September. We also paid $295,000,000 in dividends.

The June diluted earnings per share were 1.33 exceeding the high end of our guidance range, driven by that higher revenue, stronger gross margin performance and the lower tax rate. The diluted share count was 1,280,000,000.00 shares, which was a reduction from the March and was consistent with our guidance. We have $7,500,000,000 remaining on our board authorized share repurchase program. Let me pivot to the balance sheet. Cash and cash equivalents totaled $6,400,000,000 at the end of the June, an increase from $5,500,000,000 at the end of the March.

The main reason for the cash increase was cash from operating activities, including those customer advanced down payments, which was partially offset by cash allocated to the share buyback, dividends and capital expenditures. Their sales outstanding were fifty nine days in the June, which was down from sixty two days in the March. June inventory turns improved to 2.4 times compared with 2.2 times in the prior quarter. We're making progress in managing inventory levels and we'll continue to work on this as we go forward. Our non cash expenses for the June included approximately $94,000,000 in equity compensation, dollars 86,000,000 in depreciation and $12,000,000 in amortization.

Capital expenditures were $172,000,000 which was down from March level of $288,000,000 Spending in the June was mainly centered on lab investments in The United States and Asia, as well as manufacturing facilities in Asia, supporting our global strategy to be close to our customers development and manufacturing locations. I would point out that offsetting this capital spending, we received more than $50,000,000 in benefits through the advanced manufacturing investment credit, as well as other Chips Act related programs. We ended the June with approximately 19,000 regular full time employees, which was an increase of approximately 400 people from the prior quarter. We had headcount increases primarily within R and D to support the long term product roadmap. In addition, we had increases within the factory and field organizations for increasing manufacturing activities and a higher volume of tool installations.

Let's look at our non GAAP guidance for the September. We're expecting revenue of $5,200,000,000 plus or minus $300,000,000 We expect stronger China revenue driven by foundry spending in the September. We're expecting gross margin of 50% plus or minus one percentage point. This guidance includes our current assessment of the direct impact of tariffs on our business. Operating margins of 34% plus or minus 1%.

And finally, earnings per share of $1.2 plus or minus $0.10 based on a share count of approximately 1,270,000,000.00 shares. So let me wrap up. In completing the first half of the calendar year 2025, I was pleased that we made solid progress on the objectives we shared at the beginning of the year. Sitting here today, as Tim mentioned, we now see WFE relatively balanced half on half. We continue to prioritize strategic investments that extend our technology leadership, operational efficiencies and profitability, which reinforces our long term value creation agenda.

Operator, that concludes our prepared remarks. Tim and I would now like to open up the call for questions.

We will now begin the question and answer session. At this time, we will take our first question, which will come from C. J. Muse with Cantor Fitzgerald. Please go ahead.

Yes, good afternoon. Thank you for taking the question. I guess first question, your tool business is likely growing three times the growth rate of WFE, here in calendar twenty five. And you indicated, you know, expectations for relative outperformance to continue in calendar twenty six. Is there a framework for thinking about rank order of the key drivers of this outperformance that you could share?

Sure. I think it's all the things that we've talked about in the past. I mean, we look at foundry logic, I mentioned extensively the discussion of Moly today, but we're also looking at other tools around the gate all around structure. It's things like selective etch, ALD. We still have backside power to come.

That will be an area we believe of outperformance for LEM, given our strength in etching deposition and the role that it plays there. We continue to see ourselves gaining against WFE the more that advanced packaging is incorporated across every type of device, whether it's foundry, logic, HBM. And even in NAND, you're starting to see on every NAND maker's roadmap things like cell bonded to array or cell under array. So, really, as I look to the future, I mean, it basically is one in which depth and etch intensity just continues to rise faster than WFE. Lam has an incredibly strong position already and a portfolio of products that are just doing great in the marketplace.

And so, I think if we continue to stay focused and execute, it will be those technology drivers that will carry us forward.

Very helpful. And then a question for you, Doug. In terms of gross margins, you've got it sounds like some tailwind from China. So curious, does that continue into the December? And is there kind of a new normalized gross margin ex kind of China that we should be thinking about?

Yes, Tim, we are benefiting from a favorable mix, both customer as well as a little bit of product. We do have some level of headwinds as I look forward. Tariffs are ticking up a little bit. I don't expect as we get into the December, we're going to continue to have quite as favorable of a level of mix. And so I'll be pretty direct about how I want everybody thinking about the December gross margin.

You should be kind of thinking about where consensus is today, which is about 48%. Think that's what you're going to see in December. I'm not going to get over the skis yet in terms of what you should be thinking about as we head into next year, because I'm not exactly sure what the mix is going to be CJ, but I'll give you a very direct guidance on December, which I just did. Very helpful. Thank you.

And our next question will come from Timothy Arcuri with UBS. Please go ahead.

Thanks a lot. Doug, so taking your comment about gross margin being down a smidge, and I know it doesn't have a lot to do with volume, and also looking at the commentary about WFE being pretty flat half on half, I know you're going to gain share, on the system side during the back half of the year for sure. But can you give us just a little bit of a sense, like do you think that December revenue is down as well just like gross margin? Or do you think it's pretty flat?

Yes, Tim. Mean, you should think about our revenue likely mirroring what we described WFP to be, right? We told you we now think WP is roughly flat half on half, flattish. And if you think through that, you know what March was, you know that both June and September are roughly the same revenue level, so that you should conclude the December quarter look largely top line wise like March did, roughly.

And then Yes, will be down. And that's part of the gross margin, Tim.

Yes. Okay, cool. And then can you just talk about just there was a there's like a lot of puts and takes for next year. I know there was a pretty big CapEx cut from a big logic maker. But it sounds like you still feel like the bias to next year I mean, you're not giving us a number, but if you had to, you would say that the bias to next year is up. Is that fair?

Well, we're not going to give a 2026 number. But I think that what we're trying to do is frame out that regardless of what WFE is, we think that the drivers of WFE spending are significantly in Lam's favor. I think that it's just too early. Mean, there are tremendous number of projects in play right now. It's hard to know exact timing.

But if you look what are the drivers for '26, '27, '28, It's what I just talked about in the last question, HBM, advanced packaging, gate all around, NAND layer scaling, Moly. We didn't talk about I didn't mention dry resist, EUV patterning. These are all areas where Lam has new products that have been in our customers' R and D facilities for the last several years. They're ready to go. We don't control the customers' project timing, but we feel incredibly confident that when those projects go, Lam expands our SAM and gains share.

Might be 26, it might be 27. Our strategy doesn't change at this point based on the customers' timing. We're in the right position.

Our next question will come from Harlan Sur with JPMorgan. Please go ahead.

Hey, guys. Good afternoon and great job on the quarterly execution. Your China business was strong in the June, was up about 20% sequentially. Is the team still embedding about a $700,000,000 negative impact from China in the second half of this year due to the restrictions that were put in place back in December? But irrespective of that, on top of all of this, you're anticipating a better overall China business this year.

Right? So relative to ninety days ago, what has changed within your China customer base? Do you think that this is potential pull forward of equipment of ahead of any potential tariffs or just more focused on bringing manufacturing capabilities domestically just given the choppy geopolitical environment?

Well Harlan, you stuck like three or four questions in there. Let me try. Yes, that $700,000,000 number that was revenue we had identified to specific customers. Regulations haven't changed, so that's no different. I think when we think about the fact that WP is a little bit stronger and it's driven by a little bit more spending in China, it's just a little bit more spending from a handful of customers is how I would be thinking about it.

It's nearly impossible for us to say it's a pull in because of any specific reason. They're just spending a little bit more when unpack it.

Okay. Perfect. Thank you for that. And then maybe for Tim, as we track a lot of these next generation AI XPU and GPU programs, like many of them are moving from two and a half D to three d packaging. And then on the flip side, your memory customers, as you pointed out, are gearing up for a strong migration to HBM4 next year.

Some of them are actually signaling increases in spending in the second half of this year, right, versus their expectations coming into the year. I think you guys did greater than a billion in advanced packaging and HBM last year. You came into this year targeting greater than 3,000,000,000 in advanced packaging and gate all around. But if you just single out advanced packaging, is that business coming in better versus your expectations entering this year? And is that what is also helping to drive maybe a slightly better second half shipment and revenue profile?

Yes, it's a little bit Harlan. I think advanced packaging and total is probably a little bit stronger than we expected. It's not wildly stronger, but HBM is strong and there's probably a little bit of upside related to that as well as the China stuff we were talking about.

And Harlan, I would just say from a technology perspective, I mean, kind of hit it. The packaging schemes are getting more complex. You mentioned 2.5 d to three d. I've always said for years now, you hear three d, you should think of LAM. And that means vertical scaling and more etch and deposition.

HBM 3E to 4E obviously does things that are beneficial for us both from an advanced packaging perspective, but also from a front end equipment perspective. The die size cell size gets a little bit bigger, the die gets bigger because of increased number of TSVs to feed the higher IO count. By our estimate, and I think some of our customers' commentary, you need approximately 30% more wafers to produce an equivalent number of bits when you move from 3e to 4e. So, look, as AI performance requirements continue to demand these greater capabilities, we're just seeing increased WFE in the etch and deposition spaces. Similarly, SSD speeds, when you talk I mentioned CBA, is another packaging enabled capability, that's being directly put in for performance, it's part of the ability to create higher performance for SSDs, higher readwrite speeds.

So, I think that everywhere these kind of packaging capabilities are being leveraged for performance and next gen capabilities. Thanks,

Our next question will come from Krish Sankar with Cowen and Company. Please go ahead.

Yes. Hi, thanks for taking my question. I have two of them. Doug, I just want to clarify one thing on China sales. If I heard you right, you said the multinationals grew relatively more in June versus March.

If true, you think it was because of potential for restrictions on tools for MNCs in China? Or do you think something else was going on?

No, Chris. Again, it's hard to isolate, hey, spending was a little stronger. What was the reason? I don't know that I would specifically identify it to that. But yes, you picked up on the commentary exactly right.

The global multinationals in China grew by more than 90% quarter over quarter. So there was a big increase in spending from that and that contributed to part of the uptick you saw in the China regional spending.

Got it. Got it. Very helpful. And then a follow-up for Tim. Tim, on the two nanometer gate all around, especially at the leading Taiwan foundries, are all the tool decisions already made?

Or do you think there are still some PTO hours that are still in flux?

Chris, don't want to speak to any one specific customer where they are in timing. But I would say that, look, I mean, when we're not the guy in position, we're fighting right to the end until production fabs are built. But I would say that from the big drivers of SAM expansion and share gains, we've been looking forward past two nanometers for quite some time. And a number of things I talked about in terms of inflections are beyond two nanometers. I just highlighted Moly adoption and foundry logic, dry resist.

There's a lot coming beyond and we're already well engaged with those more advanced applications. So, probably the best I can say without talking too much about one customer.

And our next question will come from Stacy Rasgon with Bernstein Research. Please

Hi, guys. Thanks for taking my questions. First, I wanted to zero in again on on China. So the multinational is clearly the source of the upside in the quarter. Is it the local spending that's the upside in the September quarter in the multinational you see sustaining?

And I guess given all of that, given the decline you're guiding for December quarter, that pretty much just trying to normalizing into December? Is there something else going on there?

Stacy, I'm not going to break down the specificity of the regional composition for the guide, but China is up in the quarter. And yes, you got December. You're thinking about December in the right way.

Got it. So there's nothing else going on unusual in December? It's mostly just the trend of normalization? I mean, the gross margin guidance seems to indicate that as well.

Yes. Revenue is going to be a little bit softer in December, just normal profile. Mix is a little bit softer in December. We're kind of back to a little bit of a run rate. And frankly, Stacy, you should also be thinking about tariffs, right?

Tariffs are a little bit higher in the December quarter than they are in September. So there's a lot of moving pieces, guess, is why I'm rambling on here a little bit. Yes.

No, I hear you. And for my follow-up, I just want to ask about Taiwan. I thought you said Foundry was at a record level, but Taiwan was actually down sequential. I guess I'm just having a little bit of trouble squaring that. Where am I what am I missing?

Taiwan last quarter was 24 percent revenue. This quarter, it was 19%. Revenue was up. So on a like for like basis, Taiwan was down a little bit. But understand, Taiwan is not the only geographic location where there's foundries in the world, right? There's foundries all over the globe.

Where are you seeing the foundry spending picking up then?

I'm not going to break down the geographic distribution, but there's a leading edge foundry investing in Japan. There's trailing edge foundry spending in China as well as globally. So it's a little bit all over Stacy. Japan, I would point out to you, I mentioned this record revenue in the Japan region. So I think you probably know there's a large new foundry in Japan.

That's what I'm trying to tie out. Thank you very much. Helpful.

And our next question will come from Jim Schneider with Goldman Sachs. Please go ahead.

Good afternoon. Thanks for taking my question. Relative to your outlook on 2026, realize it's very early and you don't want to give a view there. But I mean, do you have confidence that Lam's business can actually grow in 2026 even if CapEx is not up for the broader industry?

Jim, we're not going to give a good number for next year. The important thing, and I think Tim described as well, listen, etch and depth as a percent of total WFE we see growing. And we feel extraordinarily good about the strength of the product portfolio right now such that we reiterated, Tim reiterated today that of this expanding SAM, we're going to gain 50% of it as our view of things. At the end of the day, we're only halfway through 25%. So we're not going to quite stick our neck out about 26% yet.

It'll be what it'll be, but we feel great about our relative outperformance into the next several years. That was the important message, Jim, that we try to deliver.

Understand. Well, I had to give the rookie try. Just a second question as a follow-up. Just wondering, obviously, NAND was a pretty good step up in the quarter. Do you see that strength sustaining through the end of the year or the next couple of quarters from where you stand today?

Or is it sort of like a pop up and pop down potentially? Thank you.

This is Jim. I'm also not going to get into the quarterly breakdown of NAND spending. The important thing though, and we reiterated this and we said it back at the Investor Day, is you should think about NAND over the next several years needing to spend roughly $40,000,000,000 to work through technology conversions, upgrades, if you will. Our view of that hasn't changed. That's the most important thing to think about.

The spending profile over the next several years we see continuing.

Lam Research (LRCX) Q4 2025 Earnings Call Transcript

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