Lam Research Corporation

Ladies and gentlemen, welcome to the June 2022 Quarter Earnings Conference Call. At this time, I'd like to turn the conference over to Tina Carrera. Please go ahead.

Thank you, Operator, and good afternoon, everyone. Welcome to the Lamb Research Quarterly Earnings Conference Call. With me today are Tim Archer, President and Chief Executive Officer, and Doug Bettinger, Executive Vice President and Chief Financial Officer. During today's call, we will share our overview on the business environment, And we'll review our financial results for the June 2022 quarter and our outlook for the September 2022 quarter. The press release detailing our financial results was distributed a little after 1 o'clock p.m. Pacific time this afternoon. 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&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 3 o'clock p.m. 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, Tina. Good afternoon, everyone. We appreciate you joining us today. LAM's June quarter results were much stronger than we originally anticipated. Revenue and non-GAAP earnings per share achieved new quarterly records, and we're well ahead of our guidance for the quarter. Industry-wide shortages continue to impact output and the efficiency of our operations. However, specific actions we have taken in our supply chain in recent quarters are allowing us to execute more effectively in the supply-constrained environment. I want to thank our global LAM teams, including our supply chain operations and engineering groups, as well as our suppliers and customers for demonstrating incredible dedication, agility, and partnership in the face of significant challenges. In the June quarter, we continued to see good momentum with our product and installed base initiatives, with FoundryLogic systems and CSBG revenues both reaching new highs. Our performance this quarter adds to my confidence that LAM will emerge from this period of industry disruption stronger, more resilient, and even better positioned in our markets. As suggested by our guidance today, we expect to see incremental improvement in supply chain conditions in the September quarter. But our view is that industry-wide output will continue to be constrained through the rest of this year. Consequently, we are lowering our outlook for calendar year 2022 wafer fab equipment spending to be in the low to mid $90 billion range. Overall semiconductor demand remains robust, but with some macro-driven pockets of weakness particularly in consumer-focused markets. We see strong FoundryLogic spending outgrowing both NAND and DRAM investments. In the longer term, we expect industry growth to be driven by the increasingly vital role semiconductors play in the global economy. This, along with expanding semiconductor content in end devices, rising device complexity, and larger die sizes will help sustain strong WFE levels. Most importantly for LAM, technology inflections will continue to drive greater etch and deposition intensity. Across our company, we have been prioritizing investments to benefit from these trends and prepare for the growth ahead. Over the last two years, LAM has devoted significant attention to the disruptions that have impacted the semiconductor ecosystem. But at the same time, we have used this period to accelerate a strategic transformation of our operations and product focus. We have significantly expanded LAM's capabilities and resources closer to our customers and ecosystem partners, both in the US and globally, to deepen collaboration, accelerate the introduction of new products, and drive greater operational flexibility. Compared to pre-pandemic times, LAM now has a more globally diverse manufacturing and supply chain infrastructure. designed to leverage unique regional capabilities while servicing worldwide demand. A notable example is LAM's new Malaysia facility, which takes our manufacturing, supply chain, and logistics operations to the next level in terms of scale, automation, and efficiency. Over the last two years, we have also increased our technology infrastructure investments across the US, Asia, and Europe, which is included a new development center in Korea, and a soon to open engineering lab in India. Our vision is to be the premier technology collaboration partner in the ecosystem, leveraging LAM innovation to bring customers, suppliers, peer companies, and consortia together to create disruptive solutions for the industry's grand challenges. Productivity and extendability of EUV patterning has been one such area of focus. And in the June quarter, we announced that SK Hynix had selected LAM's innovative dry resist fabrication technology as a development tool of record for two key steps in the patterning process for advanced DRAM chips. We also announced the expansion of partnerships within the EUV ecosystem. In collaboration with Integris and Gelest, we look to provide our customers with reliable access to precursor chemicals for LAM's dry photoresist technology. Together, we will also be working to accelerate the development of dry resist solutions for high numerical aperture EUV patterning. With customers, we are using data-driven equipment intelligence solutions to deepen our engagements. An enormous amount of equipment and process data is being generated from our installed base. And together with customers, we are using key learnings to drive fab productivity. LAM Sensei platform was launched in early 2020 with the goal of combining LAM's innovative equipment intelligence solutions with our market leading edge technology. The Vantex dielectric edge system built on the Sensei platform has seen tremendous momentum since launch and has become the fastest ramping edge tool in LAM history. We expect the installed base for this product to approximately triple this year alone. Furthermore, we are seeing increased demand for LAM solutions in new advanced packaging architectures. Our Keel Plasma Edge products with Hydra have a proven track record of delivering the productivity and uniformity requirements needed for cost effective front end device scaling. Leveraging this expertise in high volume manufacturing, we have now achieved multiple new edge tool of record positions for advanced packaging at a leading FoundryLogic customer. As customers further develop these architectures in support of greater system performance, we see a growing opportunity for LAM's etch and deposition solutions. And a final element in our transformation over the past several years relates to our emerging leadership in sustainability. In late June, we released our 2021 ESG report, where we outlined how we integrate ESG throughout our operations. We are proud that we were one of the first in the semiconductor industry to set a net zero emissions goal. I encourage you to review the report to see the great progress we are making across several important areas, including environmental sustainability and our commitment to diversity and inclusion in our workforce. So in summary, I am very pleased with the solid results posted by the company for the June quarter. Our results are an indication of our strong business foundation built on a large and growing installed base, a differentiated product portfolio, and a commitment to ecosystem-wide collaboration and success. We are in a great spot to benefit as secular drivers push the semiconductor industry to new heights over time. Thank you, and I will now turn it over to Doug.