1.24.24
For the full calendar year 2023, Lam saw memory WFE spending down nearly 40% year-over-year while non-memory spending was down mid-single digits. Total WFE for the year just completed was in the low $80B range. The company is forecasting WFE spending in 2024 to be in the mid-to-high $80B range. DRAM growth will come from HBM capacity additions and node conversions. NAND growth will come from technology upgrades. While we are early in the recovery of the memory cycle, the company called out that DRAM revenue this quarter was a record for the company. I think much of this is driven by Lam selling tools for HBM production. They are the leader in etchers to make high aspect ratio contacts, which are prominent in HBM manufacturing. DRAM spending at LAM in the quarter was 50% higher than last quarter and more than 4x the level of two quarters ago. NAND spending is up around 30% sequentially, for comparison, and remains at one-third of peak levels. NAND investment remains cyclically low. China was cited as a secondary driver of DRAM equipment demand in the quarter. Archer (CEO) said “what I’d say is that all signs are pointing to the memory market beginning to come out of its pretty darn near historic downturn over the last couple of years. And so that’s what we’re looking at for this year.” Late in the earnings call, the CFO gave more information on why DRAM revenue was so high in the quarter. HBM was the primary driver and they “got a China customer in DRAM in the second half of the year.” That sounds to me like they won business at an indigenous China customer and their first big sales hit in the third and fourth quarters of last year. NAND spending on WFE in 2023 was down more than 70% from the levels in 2022. My conclusion from this call is that NAND spending, while up some sequentially from last quarter, remains well below the steady-state rate. My question is how much core DRAM equipment spending was up in the quarter. The surge in revenue for Lam from DRAM customers was for HBM-specific tools. I wonder how much core DRAM spending rose in the quarter. Their overall message on memory is that 2023 will be a year of recovery in equipment spending on both DRAM and NAND. The question is what the slope of the recovery will be.
- S. Hughes (cyclical long MU)