00:00:02
Speaker 1: Bloomberg Audio Studios. Podcasts.
00:00:05
Speaker 2: Radio. News.
00:00:07
Speaker 1: We've got with us the CEO of Lamb Research, Tim Archer, who joins us alongside Ed Ludlow, the host of Bloomberg Tech. Ed's out there in San Francisco. Tim is out there in Tualatin, Oregon. Tim, I want to get to this project. We'll get to it. But before we do, shares of Lamb Research just surged at the end of last month. This was Just after you reported results closing higher by close to 18%, you reported fourth quarter results and an outlook for adjusted earnings that beat expectations. You said in a statement at the time that record revenue, operating margin, and earnings per share, out of record, as AI-driven demand continues to reshape the semiconductor industry, can you give us some color of what you've seen day-to-day over the past four weeks that show what you're seeing with demand right now?
00:00:56
Speaker 2: Well, thanks very much for having me today. Look, I think those results just indicate we're in an accelerating demand environment for semiconductors. And what LAM does, I think most people realize, but we make the machines that help make all of those chips. And especially our strengths are in some of the most advanced manufacturing processes for chip making. So we're seeing tremendous demand with the AI build out and all the chips required to support AI. And I think that just Week by week by week, we continue to just see not only, really, we don't talk a lot about capacity. In fact, the announcement we're making here today is about a new R & D lab. We're just seeing an acceleration of the pace of innovation, the capabilities of each of those chips. And it's something that we're investing to stay ahead of that demand.
00:01:46
Speaker 3: Tim, it's Ed in San Francisco. And you're right, we don't really talk about at least LAM in the context of more capacity. Your challenge... is to make increasingly tiny three-dimensional structures at atomic level precision. And that's only getting more difficult in the AI age. How do these lab investments help you get there?
00:02:09
Speaker 2: You know, one of the keys to really accelerating innovation is working very closely with our customers. And so one of the things that's very unique about the announcement and, you know, the groundbreaking we have here in Oregon, I mean, Oregon has been kind of the heart of the Silicon Forest for more than three decades. And so a lab here in Oregon puts us close to a lot of the advanced chip making that happens very close by here by some of our very large customers. And we also have labs in Asia and Europe as well to put us close to those customers. We think that by shortening that distance and really building incredibly tight collaboration with our customers who understand what those next problems are to be solved, that That accelerates the velocity of innovation with them for those next generations. So that's what's unique about our lab strategy and the type of work that's done.
00:03:02
Speaker 3: So Tim, why is the timing on this? I mean, why is LAM investing so heavily now?
00:03:07
Speaker 2: What does semiconductor manufacturing technology matter? Yeah, if you think about this, this lab here is part of a much bigger investment that we announced. It's $ 3 billion across that global lab network. And You know, why now? The pace of innovation. AI has fundamentally changed the rate at which we have to be innovating. You know, I look back just a few years ago and, you know, when the markets were driven by things like smartphones and PCs, that cycle was operating, you know, kind of on the every one to three years you needed to really innovate something new. AI has changed that requirement such that with new AI models coming every few months and each of those demanding more computational power, even better high bandwidth memory, even more storage. You know, LAM is looking to meet those needs. We are a manufacturer of machines that make each and every one of those types of devices. And so there's a lot of demand for us to continue to come out with the next great innovation and process in manufacturing technology to keep up. We've also seen a tremendous boom in what's called advanced packaging. It used to be that in most cases you built a single chip and it had a certain function. And you increased the performance of that chip by making it smaller and introducing new materials. Advanced packaging changes the game because now it is about putting many different types of chips together to create system level performance. And putting all of these chips together and stacking them into a three-dimensional architecture, it requires a lot of etch and deposition equipment. We said that our business in advanced packaging this year would be growing more than 70% year on year. And one of the particular tools, the copper electroplating tool that plays such an important role, that tool is actually developed and manufactured here in Oregon, which makes this such an important site for us.
00:05:05
Speaker 3: Tim, you know, it's really important to underscore NVIDIA, as an example, is not your direct customer, right? It is TSMC and the memory makers, right? but it is the demand for lead-edge chips across logic and memory, HBM, that is the story out in the world. How much of that growth in demand directly reads through to LAM, and how do you respond to it?
00:05:28
Speaker 2: Yeah, if you look at advanced chips today, one of the trends that just is, it's been around for a few years, and AI has really put it into hyperdrive, is the three-dimensional scaling of every device, and so Of course, that's been true in foundry logic with technologies like gate all around, introduction of gate all around, which is a three-dimensional transistor structure. But really, it comes to bear when you think about what high bandwidth memory is. High bandwidth memory is the stacking of multiple DRAM chips on top of each other to create higher bandwidth performance for AI. And so clearly, a three-dimensional architecture that requires a lot of etch-and-deposition equipment and a lot of innovation technology. for us to be able to support the manufacturer of those structures. NAND has been 3D, has had a 3D architecture since more than 10 years. And LAM has been a very strong player. In fact, it has traditionally been our strongest market because of that 3D architecture. And what we're seeing now is as other devices go 3D, it just drives a lot more demand for our specific types of equipment.
Speaker 1: Bloomberg Audio Studios. Podcasts.
00:00:05
Speaker 2: Radio. News.
00:00:07
Speaker 1: We've got with us the CEO of Lamb Research, Tim Archer, who joins us alongside Ed Ludlow, the host of Bloomberg Tech. Ed's out there in San Francisco. Tim is out there in Tualatin, Oregon. Tim, I want to get to this project. We'll get to it. But before we do, shares of Lamb Research just surged at the end of last month. This was Just after you reported results closing higher by close to 18%, you reported fourth quarter results and an outlook for adjusted earnings that beat expectations. You said in a statement at the time that record revenue, operating margin, and earnings per share, out of record, as AI-driven demand continues to reshape the semiconductor industry, can you give us some color of what you've seen day-to-day over the past four weeks that show what you're seeing with demand right now?
00:00:56
Speaker 2: Well, thanks very much for having me today. Look, I think those results just indicate we're in an accelerating demand environment for semiconductors. And what LAM does, I think most people realize, but we make the machines that help make all of those chips. And especially our strengths are in some of the most advanced manufacturing processes for chip making. So we're seeing tremendous demand with the AI build out and all the chips required to support AI. And I think that just Week by week by week, we continue to just see not only, really, we don't talk a lot about capacity. In fact, the announcement we're making here today is about a new R & D lab. We're just seeing an acceleration of the pace of innovation, the capabilities of each of those chips. And it's something that we're investing to stay ahead of that demand.
00:01:46
Speaker 3: Tim, it's Ed in San Francisco. And you're right, we don't really talk about at least LAM in the context of more capacity. Your challenge... is to make increasingly tiny three-dimensional structures at atomic level precision. And that's only getting more difficult in the AI age. How do these lab investments help you get there?
00:02:09
Speaker 2: You know, one of the keys to really accelerating innovation is working very closely with our customers. And so one of the things that's very unique about the announcement and, you know, the groundbreaking we have here in Oregon, I mean, Oregon has been kind of the heart of the Silicon Forest for more than three decades. And so a lab here in Oregon puts us close to a lot of the advanced chip making that happens very close by here by some of our very large customers. And we also have labs in Asia and Europe as well to put us close to those customers. We think that by shortening that distance and really building incredibly tight collaboration with our customers who understand what those next problems are to be solved, that That accelerates the velocity of innovation with them for those next generations. So that's what's unique about our lab strategy and the type of work that's done.
00:03:02
Speaker 3: So Tim, why is the timing on this? I mean, why is LAM investing so heavily now?
00:03:07
Speaker 2: What does semiconductor manufacturing technology matter? Yeah, if you think about this, this lab here is part of a much bigger investment that we announced. It's $ 3 billion across that global lab network. And You know, why now? The pace of innovation. AI has fundamentally changed the rate at which we have to be innovating. You know, I look back just a few years ago and, you know, when the markets were driven by things like smartphones and PCs, that cycle was operating, you know, kind of on the every one to three years you needed to really innovate something new. AI has changed that requirement such that with new AI models coming every few months and each of those demanding more computational power, even better high bandwidth memory, even more storage. You know, LAM is looking to meet those needs. We are a manufacturer of machines that make each and every one of those types of devices. And so there's a lot of demand for us to continue to come out with the next great innovation and process in manufacturing technology to keep up. We've also seen a tremendous boom in what's called advanced packaging. It used to be that in most cases you built a single chip and it had a certain function. And you increased the performance of that chip by making it smaller and introducing new materials. Advanced packaging changes the game because now it is about putting many different types of chips together to create system level performance. And putting all of these chips together and stacking them into a three-dimensional architecture, it requires a lot of etch and deposition equipment. We said that our business in advanced packaging this year would be growing more than 70% year on year. And one of the particular tools, the copper electroplating tool that plays such an important role, that tool is actually developed and manufactured here in Oregon, which makes this such an important site for us.
00:05:05
Speaker 3: Tim, you know, it's really important to underscore NVIDIA, as an example, is not your direct customer, right? It is TSMC and the memory makers, right? but it is the demand for lead-edge chips across logic and memory, HBM, that is the story out in the world. How much of that growth in demand directly reads through to LAM, and how do you respond to it?
00:05:28
Speaker 2: Yeah, if you look at advanced chips today, one of the trends that just is, it's been around for a few years, and AI has really put it into hyperdrive, is the three-dimensional scaling of every device, and so Of course, that's been true in foundry logic with technologies like gate all around, introduction of gate all around, which is a three-dimensional transistor structure. But really, it comes to bear when you think about what high bandwidth memory is. High bandwidth memory is the stacking of multiple DRAM chips on top of each other to create higher bandwidth performance for AI. And so clearly, a three-dimensional architecture that requires a lot of etch-and-deposition equipment and a lot of innovation technology. for us to be able to support the manufacturer of those structures. NAND has been 3D, has had a 3D architecture since more than 10 years. And LAM has been a very strong player. In fact, it has traditionally been our strongest market because of that 3D architecture. And what we're seeing now is as other devices go 3D, it just drives a lot more demand for our specific types of equipment.
