Lam Research (LRCX) Barclays 22nd Annual Global Technology Conference 2024 summary

Market outlook and growth drivers

• Wafer fab equipment (WFE) spending for 2024 is expected to be around $95 billion, with leading-edge foundry logic and DRAM performing well, while NAND and trailing-edge logic remain soft except in China.

• 2025 is anticipated to be a growth year, driven by NAND upgrades, continued strength in leading-edge logic and DRAM, and a shift in China WFE spending downward from current levels.

• NAND market is expected to see upgrades rather than new capacity, with a transition from tungsten to molybdenum metallization and a focus on sub-200 layer device upgrades.

• DRAM investment remains strong, fueled by high bandwidth memory (HBM) and DDR5 transitions, with HBM-related business tripling this year.

• China’s WFE spending is concentrated in mature node foundry logic, trending down from 47% to about 30% of revenue through 2024, and expected to decline further in 2025.

Technology and business innovation

• Advanced packaging, gate-all-around, and backside power are each billion-dollar-plus opportunities, with advanced packaging and gate-all-around already exceeding $1 billion in revenue this year.

• Backside power is expected to ramp in late 2025 or 2026, while dry photoresist is a longer-term opportunity, potentially reaching $1 billion in four to five years.

• These technology drivers cut across both foundry logic and memory markets, supporting growth in both segments.

• Investments in these areas were anticipated years in advance, positioning the business to capitalize as industry demand ramps.

Customer Support Business Group (CSBG) and service

• CSBG, which includes spares, service, upgrades, and the Reliant product line, accounted for 42% of total revenue last quarter.

• Spare parts and service are the largest and fastest-growing components, supported by innovations like cobots for more predictable service.

• Reliant product line, focused on mature nodes, benefited from strong China spending but may face headwinds as mature node investment softens.

• Growth in spares, service, and upgrades is expected in 2025 due to increased chamber count and improving utilization in memory fabs.