Testing Equipment
Lam Research Fiscal Q3 Earnings: A Tad Early to the 2025 Rebound
Lam’s Q3 report was nothing too spectacular, with a slight revenue beat in the quarter and a solid EPS beat. Q4’s guide pointed to relatively flat revenue and a slight sequential decline in EPS. We have a 4% placeholder on Lam, which may be a tad early for the material rebound that is expected 2025-ish. Primarily, Lam’s rebound is dependent on NAND recovering. Discussions around the incoming NAND rebound were important, as well as the discussions on DRAM. China is both an opportunity and a risk for Lam. China’s revenue contribution remained above 40% in the quarter, though Korea’s contribution increased 500 bp sequentially to 24%, suggesting major memory manufacturers may be increasing WFE (wafer fabrication equipment) spend. Given the high exposure to China, there is risk in more customers being added to the banned entity list, which would result in a loss of revenue for Lam.
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