KLA (KLAC) J.P. Morgan 54th Annual Global Technology, Media and Communications Conference summary

Industry outlook and growth projections

• Wafer equipment spending for 2026 is projected to exceed $140 billion, with momentum building across all segments and upside potential for the second half of the year.

• Advanced packaging market growth has accelerated from an expected 20% to over 30%, with process control outpacing this and targeting $1 billion in revenue.

• Visibility into 2027 is unusually high, driven by new fab construction and strong customer demand for timely equipment deliveries.

• The company targets a 2030 revenue model of $26 billion ±$2.5 billion and $84 ±$8 in earnings, supported by increasing wafer equipment intensity and service growth.

• Expected to outperform the industry baseline with a 15% growth rate versus the industry’s 12%, leveraging AI and scale for margin improvement.

Product innovation and R&D strategy

• Aggressive R&D investment has led to 4.5 times more platform introductions from 2021–2025 compared to the previous decade, with 13 new platforms planned this year.

• R&D as a percentage of revenue is expected to trend down due to growth and optimization of existing platforms.

• Frequent product introductions help maintain competitive advantage and allow for pricing flexibility in response to cost pressures.

• New capabilities are introduced to improve cost of ownership and support customer needs in a consolidated industry.

Market dynamics and process control intensity

• The rise of custom ASIC and XPU designs at advanced nodes increases process control intensity, especially as large die sizes and complex architectures challenge yield and performance.

• High-value, large die production drives greater investment in process control, benefiting the company uniquely compared to process equipment peers.

• Utilization of previous node capacity is limited as new nodes ramp, increasing demand for new equipment.