7.31.24
Spending from DRAM customers down more than 20% sequentially to the lowest level in the past year. Since HBM capacity is still being added, this tells me the sharp rise in spending by DRAM customers at Lam in Q4 of last year came from indigenous China, as they made purchases ahead of new sanctions. Spending from NAND customers is still in the doldrums, down even more than DRAM was quarter-over-quarter. CY 2024 WFE expected to be in the mid-$90B range. That is up again from last quarter, when they said spending would be in the low-to-mid $90B range. The investment profile from their customers is generally unchanged in the last ninety days. Domestic China spending will be slightly stronger that was thought last quarter. They are seeing additional demand related to ramping HBM capacity, so expect spending from DRAM customers to increase for the rest of calendar 2024 and into 2025. The market for mature nodes is forecasted to be flat in 2024 compared to 2023. Foundry/logic, DRAM, and NAND are all expected to rise in 2024 over 2023. On AI, they see model training driving demand for GPUs and HBM today. As AI expands into more inferencing, they anticipate this to increase demand for low power DRAM and storage. Memory WFE is expected to be biased towards technology upgrades. Revenue guidance is for a rise of <5% in the current quarter. DRAM investment in mature nodes declined in the June quarter. DRAM revenue reached a record in fiscal 2024 with spending focused on DDR5, HBM, and enablement of the 1y process node. NAND revenue was at a low point for the year and is expected to gradually improve as utilization rates return to normal levels and spending on node conversions increases. China spending in calendar 2024 was first half weighted, in contrast to calendar 2023 which was second half weighted. Mature DRAM spending was concentrated in the second half of last year and a little into early 2024. As legacy DRAM is weak at the big three, I think this spending was driven by indigenous Chinese DRAM demand. NAND fab utilization began to improve in the March quarter, so the first calendar quarter of 2024. Their overall view of NAND hasn’t changed much in the last ninety days, maybe up a little bit with an uptick in fab utilization. In summary, capital expenditures on NAND continue at the low levels of a severe downturn, despite the rise in ASPs. This is good for the health of the NAND market in coming quarter, though it also indicates that the NAND industry is still not healthy and manufacturers do not have confidence in a sustained recovery in pricing and demand.
S. Hughes (cyclical long MU)