7.24.24
For memory investors, this quarter’s results and commentary from KLA were similar to what they said three months ago. As I said last quarter, I can’t discern downturn spending from upturn spending in KLA’s sales figures to DRAM makers. NAND is clear. Spending at KLA for NAND collapsed after calendar Q4 of 2022 and hasn’t recovered since. NAND spending averaged $365M per quarter in 2022. In the six quarters since then, NAND spending has averaged $91M per quarter, it hasn’t trended up either. In Q2 the total was also $91M. Management’s comments indicate they don’t see an end in sight to this either. In DRAM, all I have to go on is what the executives say. Sales for DRAM use look the same whether the industry is in surplus or drought. The executives believe their business is transitioning from a period of stabilization to a resumption of growth. WFE for 2024 will be in the mid-$90B range. 2024 is a transition year for memory with limited growth, some in DRAM and some investment in China. DRAM and HBM will be drivers into 2025. The market and their financials are improving, and investment will hopefully follow next year. They don’t see new HBM capacity being added (I read this to say new wafer capacity, vs. node transitions) until 2025 or into 2026. The CEO called out that leading edge DRAM is seeing repair be less effective for defect tolerance, and that will drive inspection tool intensity to increase. 10% increase in revenue for September quarter and memory about the same fraction, so look for spending from memory companies to be up 10-15% next quarter. They expect sequential growth again in the December quarter.
- S. Hughes (cyclical long MU)