KLA (KLAC) Goldman Sachs Communicopia + Technology Conference 2025 summary

Business performance and outlook

• June quarter results exceeded guidance, with continued momentum into September and 2025 tracking as expected, especially in leading-edge logic investments.

• Advanced packaging market has grown to $10–11 billion, with KLA's revenue in this segment rising from $500 million last year to a projected $925 million this year.

• Service business maintains double-digit growth despite export control challenges, with a long-term target of 12–14% growth.

• Gross margins guided at 62.5% for the year, with operating margins above the long-term target model.

• Focus remains on customer support, innovation, and leveraging productivity tools to drive efficiency.

Market trends and process control intensity

• Process control share of WFE is trending toward 8% in 2024, ahead of the 7.25%+ target set in 2022.

• AI-driven increases in die size and complexity at advanced nodes (2nm, 3nm, 4nm, 5nm) are raising process control intensity in both logic and DRAM.

• HBM adoption and die stacking further increase process control needs, especially in packaging.

• The proliferation of leading-edge designs and high-mix fabs benefits KLA due to the complexity and capital optimization required.

• N2 node expected to be the largest from a design perspective over the next three years.

Advanced packaging and non-process control business

• Advanced packaging complexity and high-value integration are driving higher sampling rates and demand for advanced tools.

• Packaging market likely to grow faster than overall WFE in the coming years, though not at recent rates.

• Non-process control businesses, including specialty semiconductors and PCB, are leveraging KLA's operating model and relationships for growth.

• PCB business faces pressure from mobile market weakness but shows early signs of recovery.

• System-on-silicon trends and difficult repairability in advanced packaging increase process control intensity.