KLA Q3 FY2024 Results


Memory spending in the quarter was $482M, the lowest level in a year and the second lowest quarter in the last three years. Within this spending, 88% was for DRAM and 12% was for NAND. DRAM spending at KLA has been in the same regime that is seen in an upturn, it is NAND that is miniscule. NAND spending continues to be a fraction of what it was during the last upturn of 2020 to 2021. They see memory investment coming in 2025 but aren’t expecting “significant investments as we move through the rest of the year [2024].” Current DRAM investment is more at the leading edge, to produce high bandwidth memory. The company believes spending by Chinese DRAM customers will be lower in the second half of 2024 than it was in the first. Overall WFE for 2024 in the range of $90B to $91B. The company didn’t comment on memory fab utilizations as they did last quarter, but other commentary was about how DRAM and NAND makers are seeing better pricing and higher profitability today, which will lead to future investment. KLA’s view seems to be memory makers won’t be increasing their capital expenditures on WFE in 2024. That will be coming in 2025.

-S. Hughes (cyclical long MU)