7.30.25
Last quarter, investors got a second data point on the thawing of the nuclear winter in NAND WFE investment. This quarter strengthened that story. Lam’s sales to customers for NAND capacity was up 53% sequentially. The level this quarter - $928M – is nearly double each of the last two quarters. And those quarters were up about 50% more from the per quarter average of the previous half year. DRAM was the opposite story. Following two quarters of nearly $700M per quarter of investment sales, the June quarter saw DRAM down 30% sequentially. This broke a streak of three consecutive quarters of growth. Lam’s served market “is expanding to ~mid 30’s% of WFE in 2025.” The memory portion of this is advanced packaging, HBM, and NAND layer conversions. The company raised their calendar year 2025 WFE market outlook to ~$105B, up from the prior forecast of $100B. This increase is driven by an increase in domestic China spending. Those of us who are short Micron hope that a lot of this increased spending in the PRC is from YMTC. Lam sees non-China investment unchanged from their prior view for the rest of 2025. This will be “roughly flat” with the first half of the year. Revenue in the June quarter rose 9.5% sequentially, above guidance. Their forecast for the September quarter is total revenue of $5.20B, +/-$300M. This is about flat from the current quarter.
The rest of this is from the analyst conference call, focusing on comments that pertain to the memory markets. NAND investment this quarter and currently is focused primarily on upgrades. The quarter-over-quarter drop in DRAM investment was timing of some customer projects. DRAM revenue in their 2025 fiscal year reached a new record in dollar terms, with spending focused on upgrades to the 1-beta and 1-gamma nodes to enable DDR5 and LPDDR5. HBM was also a key investment area. While the majority of China revenue comes from domestic China customers, the level of investment from global multi-national customers is at the highest level since December of 2022. HBM is strong and will probably see some upside in the rest of 2025. The company’s estimate is that 7% of total DRAM bits are HBM in calendar 2025.
– Smooth Hughes (short MU)