Today, and welcome to Lam Research's June quarter of 2025 earnings conference call. All participants will be in a listen-only mode for the duration of the call, and should you need any assistance today, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on a touch-tone phone. To withdraw your question, please press star, then two. Please also note that this event is being recorded today. I would now like to turn the conference over to Ram Ganesh, Vice President, Investor Relations. Please go ahead. Thank you, and good afternoon, everyone. Welcome to the Lam Research quarterly earnings conference call. With me today are Tim Archer, President and Chief Executive Officer, and Doug Bettinger, Executive Vice President and Chief Financial Officer. During today's call, we will share our overview on the business environment, and we'll review our financial results for the June 2025 quarter and our outlook for the September 2025 quarter. The press release detailing our financial results was distributed a little after 1:00 P.M. Pacific time. The release can also be found on the Investor Relations section of the company's website, along with the presentation slides that accompany today's call. Today's presentation and Q&A include forward-looking statements that are subject to risks and uncertainties reflected in the risk factors disclosed in our SEC public filings. Please see accompanying slides in the presentation for additional information. Today's discussion of our financial results will be presented on a non-GAAP financial basis unless otherwise specified. A detailed reconciliation between GAAP and non-GAAP results can be found in the accompanying slides in the presentation. This call is scheduled to last until 3:00 P.M. Pacific time. A replay of this call will be made available later this afternoon on our website. With that, I'll hand the call over to Tim. Thanks, Ram, and good afternoon, everyone. Lam delivered another great quarter. Revenues and profitability came in at the upper end of our guided ranges. Our gross margins exceeded 50% for the first time since the merger of Lam and Novellus, and EPS hit a new high for the company. We achieved record foundry revenues driven by strong performance in both gate all-around and mature node markets. Our upgrades business grew to a new high, up mid-teens% over the prior quarter as NAND customers migrate to higher layer count, higher performance devices to meet the faster read-write requirements and greater storage demands of AI applications. In short, we are executing well on the served market expansion and share growth story we laid out at our investor day earlier this year. 3D scaling of device and advanced packaging architectures is accelerating growth in etch and deposition intensity, and Lam's new products targeting key technology inflections are winning with customers. Furthermore, in advanced services, Lam is at the forefront of realizing the vision of an autonomous fab. We are gaining momentum with our equipment intelligence-enabled Dextro cobots, which provide device makers with an unprecedented level of equipment maintenance precision and repeatability. The result is enhanced tool-to-tool matching, improved machine availability, lower operational costs, and in some cases, higher yield. In the June quarter, Lam expanded our Dextro capabilities to cover three additional tool types, and we are accelerating the roadmap to support more products and more shipments in coming quarters. Turning to the overall market environment for calendar year 2025, we expect wafer fabrication equipment or WFE spending to be in the $105 billion range, up from our prior view of approximately $100 billion, predominantly due to an uptick in domestic China-related spending. We see non-China investments remaining broadly consistent with our prior view. Currently, we expect WFE in the second half of the calendar year to be roughly flat with the first half. Looking forward to 2026, it is still too early to comment on the overall level of WFE spending. However, with our strong position in gate all-around, advanced packaging, high bandwidth memory, and NAND layer conversions, we feel confident that Lam is well positioned to outperform. In 2025, Lam's Served Available Market, or SAM, is set to expand to around mid-30% of WFE due to these industry drivers, and we expect them to work in Lam's favor again in 2026. Longer term, we are on a solid path to grow our SAM to the high 30% range of WFE by continuing to deliver critical solutions for atomic-level device scaling, new materials innovation, and advanced packaging integration. The key R&D investments that we've made over the last several years have enabled us to create the broadest, most competitive product portfolio in the company's history, thereby putting us in a strong position to win over 50% share of the incremental SAM over time. I'll share a couple of examples that underscore our early progress toward our SAM expansion and share gain goals. First is our Halo ALD Mali tool, which is ramping at multiple NAND customers this year. We expect Mali adoption to increase broadly as more customers convert NAND capacity to 200 layers and higher in the next few years. Lam is leading the industry transition to ALD Mali, not only in NAND but also in foundry logic. AI is driving greater transistor performance requirements and, in turn, accelerating the inflection to gate all-around device architectures. However, below two nanometers, gate all-around structures begin to encounter significant resistance capacitance, or RC, challenges. Narrower transistor contacts in these devices cause greater electron scattering, resulting in higher resistance of the deposited tungsten films. Replacing tungsten with molybdenum solves the resistance problem, but the process of depositing this higher performance material is inherently slower and more complex. This is driving a roughly 3x increase in Lam metal deposition SAM per wafer when transitioning to advanced gate all-around nodes. Today, we are the only company with ALD Mali tools already in production in foundry logic, and in the June quarter, we secured a key win at another leading foundry customer for their next-generation application. As Mali adoption expands across various metal interconnect layers, the flexibility of Lam's unique multi-station architecture to execute both plasma and thermal processing in the same chamber enables optimization of process conditions and process step sequencing to meet requirements for different applications and over multiple generations of future logic devices. Another area where we have made strong progress is advanced packaging. Advanced packaging is critical for scaling system performance to address next-generation AI requirements, and so far has enabled up to 100% improvement in memory density, 4x improvement in bandwidth, and an approximate 40% gain in power efficiency. Lam's SAM is growing with greater adoption of next-generation packaging architectures for DRAM, CPUs, GPUs, and ASICs used in data centers. In 2021, leading-edge foundry logic customers spent just 1% of WFE on advanced packaging. With AI's rapid adoption of advanced packaging, that number has grown more than 6x. In the future, we expect end-consumer devices like mobile application processors and laptop CPUs to also feature more complex packaging schemes as on-device AI becomes mainstream. We are a leader in the advanced packaging inflection and are leveraging our experience to win more opportunities. For example, Lam has amassed unmatched experience in copper plating hardware design and process technology over the last 20 years. We have by far the largest installed base in the industry and recently achieved a significant milestone of 6,000 installed plating cells. By incorporating our learning from the installed base into improvements in our latest Sabre 3D system, we are delivering best-in-class coplanarity, uniformity, and defectivity in high-volume advanced packaging environments. The experience we have gained at the leading edge is now cascading to additional wins with next-tier customers seeking to adopt a proven best-in-class solution. Sabre 3D market share in advanced packaging is expected to grow nearly five points year-on-year in calendar 2025. Finally, let me pivot to the strong momentum we're seeing with our newest generation etch tools. In NAND, we continue to solidify our leadership in high-aspect ratio dielectric etch. Equipped with our Cryo process, our Vantex system recently won a key multi-generation etch decision at a major NAND customer. This further confirms our differentiation in both technology innovation and high-volume production worthiness in the NAND segment. Across all device types, our state-of-the-art conductor etch tool, Akara, is off to a solid start since its launch earlier this year. By combining direct power coupling with Lam's unique plasma pulsing capabilities, Akara delivers industry-leading depth uniformity and profile control that is vital for DRAM scaling. In the June quarter, Akara secured multiple new application wins at a top DRAM maker. To wrap up, I'm excited by the breadth of opportunities I see ahead for the company and am encouraged by the outstanding progress our team has already made toward the long-term goals we communicated at our February investor day. Etch and deposition intensity is rising with 3D scaling. Our products are winning in key technology inflections, and as a result, there is tremendous potential for Lam to continue expanding SAM and to grow share at each successive process technology node. Now, here's Doug to talk about our quarterly financial performance and the September outlook. Excellent. Thank you, Tim. Good afternoon, everyone, and thank you for joining our call today during what I know is a busy earnings season. We executed well in the June 2025 quarter, including delivering a record gross margin percentage of 50.3% in the post-Novellus period. These past two quarters represent Lam's highest gross margin percentage since we merged the companies in 2012. Our June quarter financial results came in above the midpoint of all of our guidance ranges, with earnings per share actually exceeding the guidance range. For our 2025 fiscal year, we had record revenue of $18.4 billion and gross margin of 48.8%. Our free cash flow generation fiscal 2025 was 29% of revenue and approximately $5.4 billion, which was also a record for the company in dollar terms. We're delivering on the profitability objectives discussed at our investor day earlier this year through a growing top line, favorable mix, and strong operational execution. Let's look at the details of our June quarter results. Revenue came in at $5.17 billion, which was an increase of 10% from the prior quarter. The deferred revenue balance at the end of the quarter was $2.68 billion, which was an increase of approximately $670 million from the March quarter. This was related to customer advance down payments from several newer customers. From a market segment perspective, June quarter systems revenue in the foundry segment represented 52% of our systems revenue, an increase from the percentage concentration in the March quarter of 48%. In dollar terms, this level represents a second consecutive record quarter, and we also set a new record from a fiscal year perspective. We benefited from continued momentum in leading-edge processes as well as investments in mature nodes by domestic Chinese customers. Memory was 41% of systems revenue, a slight decrease from the prior quarter level of 43%. Non-volatile memory came in at 27% of our systems revenue, which was higher than the March quarter's level of 20%. We continue to encourage you to think of NAND investments focused primarily on upgrades, which we anticipate will require an investment of roughly $40 billion over several years. DRAM declined from the March quarter, coming in at 14% of systems revenue compared with 23% last quarter. The decline in the June quarter was related to the timing of certain customer projects. For the 2025 fiscal year, DRAM revenue reached a new record in dollar terms with spending focused on technology upgrades to the one-beta and one-gamma nodes enabling DDR5 and LPDDR5. High bandwidth memory was also a key investment area. The logic and other segment came in at 7% of systems revenue in the June quarter, slightly lower than the prior quarter level of 9%. Now, I'll go through the regional composition of our total revenue. The China region came in at 35%, an increase from the prior quarter level of 31%. We saw increasing investment from global multinational customers in this region to the highest level since the December quarter of 2022. The majority of our China revenue, nonetheless, continued to come from domestic Chinese customers. The next largest geographic concentration were Korea at 22% and Taiwan at 19% of revenue in the June quarter, both of which were a decrease from 24% concentration in the March quarter. Japan revenue at 14% was a record for Lam Research in dollar terms. The customer support business group revenue in the June quarter totaled approximately $1.7 billion, consistent with the March quarter as well as the June quarter of a year ago. We had a third consecutive record quarter for upgrade revenue driven by NAND technology convergence. We also saw strength in our spares business, offset by a decline in reliant systems. Sitting here today, we do think we will see modest growth in CSBG for the calendar year. Let's look at profitability. The June quarter gross margin came in at 50.3%, close to the top end of our guided range and improving from the March quarter level of 49%. The increase is tied to a stronger mix and continued progress in our operational efficiencies from our close-to-customer manufacturing strategy. Operating expenses for the June quarter were $822 million, up from the prior quarter level of $763 million. This was a bit higher than our original estimate coming into the quarter, primarily due to increased incentive compensation tied to the company's improved profitability. R&D accounted for 69% of total operating expenses. The June quarter operating margin was 34.4% and near the high end of our guidance. This operating profit represents a record level for Lam in both dollars as well as percentage terms. Our non-GAAP tax rate for the quarter came in at 4.8%. As I indicated on the last earnings call, the rate in the June quarter reflects a tax reserve release tied to a statute of limitations expiration. Our estimate for the September 2025 quarter is for the tax rate to be back in the low to mid-teens range. Other income and expense for the June quarter was approximately $4 million in income, compared with $7 million in expense in the March quarter. The improvement in OI&E was primarily the result of increased interest income tied to a higher cash balance, as well as gains on our venture investment portfolio. As we've talked about in the past, you should expect to see variability in OI&E quarter to quarter. For capital return in the June quarter, we allocated approximately $1.3 billion to share buybacks through a combination of open market share repurchases and an accelerated share repurchase program. That ASR will continue to execute into the September quarter. We also paid $295 million in dividends. The June quarter diluted earnings per share were $1.33, exceeding the high end of our guidance range, driven by that higher revenue, stronger gross margin performance, and the lower tax rate. The diluted share count was 1.28 billion shares, which was a reduction from the March quarter and was consistent with our guidance. We have $7.5 billion remaining on our board-authorized share repurchase program. Let me pivot to the balance sheet. Cash and cash equivalents totaled $6.4 billion at the end of the June quarter, an increase from $5.5 billion at the end of the March quarter. The main reason for the cash increase was cash from operating activities, including those customer advance down payments, which was partially offset by cash allocated to the share buyback, dividends, and capital expenditures. Day sales outstanding were 59 days in the June quarter, which was down from 62 days in the March quarter. June quarter inventory turns improved to 2.4 times, compared with 2.2 times in the prior quarter. We're making progress in managing inventory levels and will continue to work on this as we go forward. Our non-cash expenses for the June quarter included approximately $94 million in equity compensation, $86 million in depreciation, and $12 million in amortization. Capital expenditures were $172 million, which was down from the March quarter level of $288 million. Spending in the June quarter was mainly centered on lab investments in the United States and Asia, as well as manufacturing facilities in Asia, supporting our global strategy to be close to our customers' development and manufacturing locations. I would point out that offsetting this capital spending, we received more than $50 million in benefits through the advanced manufacturing investment credit, as well as other CHIPS Act-related programs. We ended the June quarter with approximately 19,000 regular full-time employees, which was an increase of approximately 400 people from the prior quarter. We had headcount increases primarily within R&D to support the long-term product roadmap. In addition, we had increases within the factory and field organizations for increasing manufacturing activities and a higher volume of tool installations. Let's look at our non-GAAP guidance for the September 2025 quarter. We're expecting revenue of $5.2 billion, plus or minus $300 million. We expect stronger China revenue driven by foundry spending in the September quarter. We're expecting gross margin of 50%, plus or minus one percentage point. This guidance includes our current assessment of the direct impact of tariffs on our business. Operating margins of 34%, plus or minus one percentage point, and finally, earnings per share of $1.20, plus or minus $0.10, based on a share count of approximately 1.27 billion shares. Let me wrap up. In completing the first half of the calendar year 2025, I was pleased that we made solid progress on the objectives we shared at the beginning of the year. Sitting here today, as Tim mentioned, we now see WFE relatively balanced half on half. We continue to prioritize strategic investments that extend our technology leadership, operational efficiencies, and profitability, which reinforces our long-term value creation agenda. Operator, that concludes our prepared remarks. Tim and I would now like to open up the call for questions. We will now begin the question and answer session. To ask a question, you may press star then one on your touch-tone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. At this time, we will take our first question, which will come from CJ Muse with Cantor Fitzgerald. Please go ahead. Yeah, good afternoon. Thank you for taking the question. I guess first question, your tool business is likely growing three times the growth rate of WFE here in calendar 2025, and you indicated expectations for relative outperformance to continue in calendar 2026. Is there a framework for thinking about rank order of the key drivers of this outperformance that you could share? Sure. I think it's all the things we've talked about in the past. I mean, clearly, if we look at foundry logic. I mentioned extensively the discussion of Mali today, but we're also looking at other tools around the gate all-around structure. It's things like selective etch, ALD. We still have backside power to come. That will be an area, we believe, of outperformance for Lam, given our strength in etch and deposition and the role that it plays there. We continue to see ourselves gaining against WFE the more that advanced packaging is incorporated across every type of device, whether it's foundry logic, HBM, and even in NAND, you're starting to see on every NAND maker's roadmap things like cell bonded to array or cell under array. Really, as I look to the future, it basically is one in which depth and etch intensity just continues to rise faster than WFE. Lam has an incredibly strong position already and a portfolio of products that are just doing great in the marketplace. I think if we continue to stay focused and execute, it'll be those technology drivers that will carry us forward. Very helpful. Then a question for you, Doug. In terms of gross margins, you've got, it sounds like, some tailwind from China. Curious, does that continue into the December quarter, and is there kind of a new normalized gross margin X kind of China that we should be thinking about? Yeah, Tim, we are benefiting from a favorable mix, both customer as well as a little bit of product. We do have some level of headwinds as I look forward. Tariffs are ticking up a little bit. I don't expect, as we get into the December quarter, we're going to continue to have quite as favorable of a level of mix. I'll be pretty direct about how I want everybody thinking about the December gross margin. You should be kind of thinking about where consensus is today, which is about 48%. I think that's what you're going to see in December. I'm not going to get over the skis yet in terms of what you should be thinking about as we head into next year, because I'm not exactly sure what the mix is going to be, CJ, but I'll give you very direct guidance on December, which I just did. Very helpful. Thank you. Thanks, CJ,. Thanks. Our next question will come from Timothy Arcuri with UBS. Please go ahead. Thanks a lot. Doug, so taking your comment about gross margin being down a smidge, and I know it doesn't have a lot to do with volume, and also looking at the commentary about WFE being pretty flat half on half, I know you're going to gain share on the system side during the back half of the year for sure. Can you give us just a little bit of a sense? Do you think that December revenue is down as well, just like gross margin, or do you think it's pretty flat? Yeah, Tim, you should think about our revenue likely mirroring what we described WFE to be, right? We told you we think WFE is roughly flat, half- on- half, flat-ish. If you think through that, you know what March was. You know that both June and September are roughly the same revenue level, so you should conclude the December quarter looked largely top line-wise like March did, roughly. Got it. Okay. So it is down. Okay. Yeah, it will be down. It will be down, and that's part of the gross margin, Tim. Yeah. Okay. Cool. Can you just talk about, just, there's a lot of puts and takes for next year. I know there was a pretty big CapEx cut from a big logic maker, but it sounds like you still feel like the bias to next year, I mean, you're not giving us a number, but if you had to, you would say that the bias to next year is up. Is that fair? We're not going to give a 2026 number, but I think that what we're trying to do is frame out that regardless of what WFE is, we think that the drivers of WFE spending are significantly in Lam's favor. I think that it's just too early. There are a tremendous number of projects in play right now. It's hard to know exact timing. If you look, what are the drivers for 2026, 2027, 2028? It's what I just talked about in the last question, HBM, advanced packaging, gate all-around, NAND layer scaling, Mali. We didn't talk about, I didn't mention dry resist, EUV patterning. These are all areas where Lam has new products that have been in our customer's R&D facilities for the last several years. They're ready to go. We don't control the customer's project timing, but we feel incredibly confident that when those projects go, Lam expands our SAM and gains share. That might be 2026. It might be 2027. Our strategy doesn't change at this point based on the customer's timing. We're in the right position. Totally. Got it. Thank you. Yep. Thanks, Tim. Our next question will come from Harlan Sur with JP Morgan. Please go ahead. Hey, guys. Good afternoon and great job on the quarterly execution. Your China business was strong in the June quarter, was up about 20% sequentially. Is the team still embedding about a $700 million negative impact from China in the second half of this year due to the restrictions that were put in place back in December? Irrespective of that, on top of all of this, you're anticipating a better overall China business this year, right? Relative to 90 days ago, what has changed within your China customer base? Do you think that this is potential pull forward of equipment ahead of any potential tariffs, or just more focused on bringing manufacturing capabilities domestically, just given the choppy geopolitical environment? Harlan, you stuck like three or four questions in there. Let me try. That $700 million number, that was revenue we had identified to specific customers. Regulations haven't changed, so that's no different. I think when we think about the fact that WFE is a little bit stronger and it's driven by a little bit more spending in China, it's just a little bit more spending from a handful of customers is how I would be thinking about it. It's nearly impossible for us to say it's a pull-in because of any specific reason. They're just spending a little bit more when we unpack it. Okay. Perfect. Thank you for that. Maybe for Tim, as we track a lot of these next-generation AI XPU and GPU programs, many of them are moving from 2.5D to 3D packaging. On the flip side, your memory customers, as you pointed out, are gearing up for a strong migration to HBM4 next year. Some of them are actually signaling increases in spending in the second half of this year, right, versus their expectations coming into the year. I think you guys did greater than $1 billion in advanced packaging and HBM last year. You came into this year targeting greater than $3 billion in advanced packaging and gate all-around. If you just single out advanced packaging, is that business coming in better versus your expectations entering this year? Is that what is also helping to drive maybe a slightly better second-half shipment and revenue profile? It's a little bit, Harlan. I think advanced packaging in total is probably a little bit stronger than we expected. It's not wildly stronger, but HBM is strong, and there's probably a little bit of upside related to that as well as the China stuff we were talking about. Harlan, I would just say from a technology perspective, you kind of hit it. The packaging schemes are getting more complex. You mentioned 2.5D to 3D. I've always said for years now, you hear 3D, you should think of Lam. That means vertical scaling. It means more etch and deposition. HBM 3E to 4E obviously does things that are beneficial for us, both from an advanced packaging perspective, but also from a front-end equipment perspective. The die size, cell size gets a little bit bigger. The die gets bigger because of increased number of TSVs to feed the higher IO count. By our estimate, and I think some of our customers' commentary, you need approximately 30% more wafers to produce an equivalent number of bits when you move from 3E to 4E. As AI performance requirements continue to demand these greater capabilities, we're just seeing increased WFE in the etch and deposition spaces. Similarly, SSD speeds, when you talk, I mentioned CBA, which is another packaging-enabled capability, that's being directly put in for performance. It's part of the ability to create higher performance for SSDs, higher read-write speeds. I think that everywhere these kind of packaging capabilities are being leveraged for performance and next-gen capabilities. Thanks, Tim. Thanks, Doug. Thanks, Harlan. Our next question will come from Krish Sankar with Cowen Company. Please go ahead. Yeah, hi. Thanks for taking my question. I have two of them too. Doug, I just want to clarify one thing on China sales. If I heard you right, you said the multinationals grew relatively more in June versus March. If true, do you think it was because of potential for restrictions on tools for MNCs in China, or do you think something else was going on? No, Krish. Again, it's hard to isolate, "Hey, spending was a little stronger. What was the reason?" I don't know that I would specifically identify it to that. Yes, you picked up on the commentary exactly right. The global multinationals in China grew by more than 90% quarter over quarter. There was a big increase in spending from that, and that contributed to part of the uptick you saw in the China regional spending. Got it. Very helpful. Then follow-up for Tim. Tim, on the 2-nanometer gate all-around, especially the leading Taiwan foundries, are all the tool decisions already made, or do you think there are still some PTORs that are still in flux? Oh, Krish, I don't want to take any one specific customer where they are in timing, but I would say that. Look, I mean, when we're not the guy in position, we're fighting right to the end until production fabs are built. I would say that from the big drivers of SAM expansion and share gains, we've been looking forward past 2 nanometers for quite some time, and a number of things I talked about in terms of inflections are beyond 2 nanometers. I just highlighted Mali adoption and foundry logic. Dry resist. There's a lot coming beyond, and we're already well engaged with those more advanced applications. Probably the best I can say without talking too much about one customer. Got it. Thanks a lot, Tim. Thanks, Doug. Thanks, Krish. Our next question will come from Stacy Rasgon with Bernstein Research. Please go ahead. Hi, guys. Thanks for taking my questions. First, I wanted to zero in again on China. The multinational was clearly the source of the upside in the quarter. Is it the local spending that's the upside in the September quarter and the multinational you see sustaining? I guess, given all of that, given the decline you're guiding for for December quarter, is that pretty much just China normalizing into December, or is there something else going on there? Stacy, I'm not going to break down the specificity of the regional composition for the guide, but China is up in the quarter. Yeah, you've got December. You're thinking about December in the right way. Got it. Got it. There's nothing else going on unusual in December. It's mostly just the China normalization. I mean, the gross margin guide seems to indicate that as well. Yeah. Revenue is going to be a little bit softer in December, just normal profile. Mix is a little bit softer in December. We're kind of back to a little bit of a run rate. Frankly, Stacy, you should also be thinking about tariffs, right? Tariffs are a little bit higher in the December quarter than they are in September. There's a lot of moving pieces, I guess, is why I'm rambling on here a little bit. Yeah. Yeah. No, I hear you. For my follow-up, I just want to ask about Taiwan. I thought you said foundry was at a record level, but Taiwan was actually down sequential, I guess. I'm just having a little bit of trouble squaring that. What am I missing? Taiwan last quarter was 24% revenue. This quarter, it was 19%. Revenue was up. On a like-for-like basis, Taiwan was down a little bit. Understand, Taiwan's not the only geographic location where there's foundries in the world, right? There's foundries all over the globe. Where are you seeing the foundry spending picking up then? I'm not going to break down the geographic distribution, but there's a leading-edge foundry investing in Japan. There's trailing-edge foundry spending in China as well as globally. It's a little bit all over, Stacy. Japan, I would point out to you, I mentioned this, record revenue in the Japan region. I think you probably know there's a large new foundry in Japan. Yeah. That's what I'm trying to tie out. Thank you very much. Helpful. Yep. You're welcome. Our next question will come from Jim Schneider with Goldman Sachs. Please go ahead. Good afternoon. Thanks for taking my question. Relative to your outlook on 2026, realize it's very early and you don't want to give a view there. Do you have confidence that Lam's business can actually grow in 2026, even if CapEx is not up for the broader industry? We're not going to give a good number for next year. The important thing, and I think Tim described this well, listen, etch and dep is a% of total WFE we see growing. We feel extraordinarily good about the strength of the product portfolio right now, such that we reiterated, Tim reiterated today, that of this expanding SAM, we're going to gain 50% of it is our view of things. At the end of the day, we're only halfway through 2025, so we're not going to quite stick our neck out about 2026 yet. It'll be what it'll be, but we feel great about our relative outperformance into the next several years. That was the important message, Jim, that we tried to deliver. Understandable. I had to give it the rookie try. Just a second question as a follow-up. Just wondering, obviously, NAND was a pretty good step up in the quarter. Do you see that strength sustaining through the end of the year or the next couple of quarters from where you stand today, or is it sort of like a pop-up and pop-down potentially? Thank you. Listen, Jim, I'm also not going to get into the quarterly breakdown of NAND spending. The important thing, though, and we reiterated this and we said it back at the investor day, is you should think about NAND over the next several years needing to spend roughly $40 billion to work through technology conversions, upgrades, if you will. Our view of that hasn't changed. That's the most important thing to think about. The spending profile over the next several years, we see continuing. The only thing I would add as well is, while there's this focus on upgrades, we're also significantly advancing the technologies. I mentioned a couple of the items. The demands of AI for both storage and speed and density is driving things like the Mali adoption that I talked about. It's driving the CBA that I talked about. It's also driving QLC to get density. QLC, I talked about a win we had for cryo etching. Cryo produces a much more vertical, high-aspect ratio dielectric memory hole. That's a critical capability that helps enable QLC. You're looking at multiple technology drivers. If you just look at layer count itself, over the last couple of years, we've been talking about all the other drivers, whether it's backside deposition for stress management, our carbon gap fill for tier stacking, and eventually, back to advanced packaging, the question we had there, you start stacking cells on top of cells to go to very high layer counts. From an etch and deposition perspective, we're going to get a lot of upgrades to the install base, but you're also going to see a lot of new tools get pulled in in the future to help enable these technology advancements that are needed both for performance and cost scaling. Thank you. Thanks, Jim. Welcome on board. Our next question will come from Atif Malik with Citi. Please go ahead. Hi. Thank you for taking my question. Doug, you talked about modest growth in CSBG this year. I understand you don't want to talk about WFE next year, but is it safe to assume that the CSBG business snaps back next year in a more meaningful way, given the restrictions and all that that has happened in China over the years and normalizes? You guys all want us to give you next year, and I'm just not going to do it, Atif. Listen, the way to think about CSBG, though, is consistent with how you should be thinking about it over the last several years, right? Chamber count grows every year. That creates incremental opportunity for us to kind of grow spares, upgrade service, and so forth. We're really excited about the advanced servicing. Tim talked about equipment intelligence and cobots. That's cool stuff. We're super jazzed about that. I'm not sure exactly how Reliance is going to play out next year. It is down a good amount this year. I'm hopeful that it does better next year, but I'm just not ready to kind of give you specificity. The tailwinds you've always seen in CSBG continue to be there. I want to, basically just to add on, the strong performance in CSBG can show up in ways that aren't just CSBG revenue. I think that's why we talk about advanced services, and I mentioned all the benefits that we see coming with equipment intelligence and our Dextro cobots, things like better machine availability, more repeatability of maintenance cycle to maintenance cycle. These things ultimately have an impact on how the customer feels about our tool as the most production-worthy system for not only this current generation of manufacturing, but all future. I think that we look at these two businesses, the CSBG business and our systems business, as very synergistic. The better we do in advanced services, the better we're going to do in terms of gaining share on the system side. I think we're investing in advanced services with that in mind, not just for its own revenue-generating purposes. Thank you. Thanks, Adam. Our next question will come from Blayne Curtis with Jefferies. Please go ahead. Hey, guys. Thanks for taking my questions. I want to ask on DRAM. Obviously, AI is super strong. I think there's a lot of concerns about maybe some inventory on the HBM side. Obviously, smaller business for you and lumpy, but just kind of curious what you're seeing in DRAM and kind of any perspective for the rest of the year. I think that if we look kind of to the second half of the year, maybe the only comment I'd let Doug add is we have seen some HBM-related strength. HBM is definitely the hot thing in DRAM right now. When we look at it, while it's been hot, we view there being a long road ahead. Some of the data we looked at, it's only something like 7% of total DRAM bits will actually be HBM in 2025. We don't know where that goes, but it looks like a long tailwind of build-out in HBM. I talked about the impact of the changes from HBM 3E to HBM 4E and whatever comes beyond that and how it's impacting the number of wafers required to produce the same number of bits. Those are things that expand WFE overall, but within that, etch is becoming more critical as well as you have to execute more precision to build these more advanced DRAMs. I think it shouldn't be overlooked the importance of the new Akara wins that I talked about within DRAM. As you mentioned, it hasn't been a big business for us, but we're gaining share in DRAM. I think that as we gain share in an expanding market, that's a great twofer. We're really pretty positive about DRAM momentum right now. Thanks. I just want to ask Doug on gross margin for December. Is there anything more than the geographic mix? I thought you said product mix, but then it would seem like kind of falling off the head one as well. Maybe you could clarify what you meant when you said product. Yeah. There's customer mix, there's a little bit of product mix, and frankly, there's a little bit of tariff showing up incrementally in December. Those are the things to be thinking about, Blayne. Frankly, overall revenue levels too. I think I told you December is going to be down a little bit. There are a lot of moving pieces in gross margin. All of that contributes some portion to it. Gotcha. When you say customer, it's related to the geographic mix. There are some smaller customers in China, and that tends to be what I'm describing when I say customer mix. It's not specific to any one region. It's just there are smaller customers. Thanks for that. Yep. Thanks, Blayne. Our next question will come from Vijay Rakesh with Jefferies. Pardon me, from Mizuho. Please go ahead. Yeah. Hey, thanks a lot. Just wondering on the WFE side, I think you have the ITC, the investment tax rate going to 35%. Do you see that driving a tailwind to WFE as you look at next year in a follow-up? Vijay, not that I can specifically correlate. Might there be? There might be, but I've not deeply sat down and thought about this or tried to correlate. It's probably something I need to do. Got it. On the China side, obviously, good to see the pickup there. As you look out, do you expect that mix to kind of normalize, kind of mean revert to where you guys were, maybe early in the year or last year? Thanks. Yeah, Vijay, it's a good question. I told you, I think September's up in China. I think December's probably going to lighten up a little bit. Previously, we described the view that last year to this year, China as a percent of total mix was going to be down. I think it's probably going to be flat to maybe slightly down. It got a little bit stronger, and that was part of why Tim described an uptick in WFE. Got it. Thank you. Thanks, Vijay. Our next question will come from Edward Yang with Oppenheimer. Please go ahead. Hi, Tim. Doug, thanks for the time. Congrats on the strong quarter. This is the third consecutive quarter where you've not only beat numbers, but the guidance has also exceeded consensus by double digits. Taking that into context, if you look at that record, is it just more conservatism in your planning, or what has kind of surprised you by this magnitude? If you unpack it, revenue came in a little bit better. Gross margin came in a little bit better. Frankly, that tax rate came in a little bit lower. I don't know that I would describe a conservative bias, but that's just kind of how the quarter unfolded. You might point out that happens at Lam Research more often than not. Maybe. That tax rate was lower than we expected for sure. It's a little bit of all of it. I think that also. Not to say much about the conservatism piece, but in general, we're also in an environment where a lot of the markets that we're selling to, look at the number, I hate to say the number of times I had to mention AI, but the reality is you've seen AI and demand generally exceeding expectations here. It's driving demand for chips. Because so much of the more advanced requirements are for etch and deposition, we're outperforming that. Maybe it's just us wanting to see it before we really commit to it. I think we're getting a better and better view of how these technology transitions are occurring. I think that's what's giving us confidence that we, I think, well telegraphed at our investor day earlier this year where we talked about pretty aggressive 2028 and trillion-dollar semiconductor industry goals for the company. Thanks for that perspective, Tim. My next question is just on mobile and your thoughts on that end market. The carriers have been reporting really strong handset sales lately. Verizon, AT&T, there are upgrades, were up 20%. This is after a long stretch of flat. Hard to know what's behind it. I think one of the carriers called it tariff pull-ins. The other denied it. It feels like maybe we're starting a meaningful shift there. If we are in the early stages of a broader handset refresh cycle, how would that affect Lam across Logic, DRAM, and NAND? Can you size your exposure, and are your ASPs in that segment above or below your corporate average? Yeah. It's a great question. We're one step removed from smartphones and PC sales. The way it shows up for us, though, at the end of the day, yeah, I do see a little bit of growth in mobile. I see a little bit of growth in client, PC client. Frankly, content is growing, right? When you look at the new phones coming out this year, there's more DRAM. There's more NAND. There are bigger baseband chips as AI becomes a thing. That happens in PCs as well, right? There's not a huge unit story in PCs, although they're up, I don't know, low single digits this year. There's a content story there with TB. In fact, I'm starting to see two TB PCs. That's what shows up for us. It'll show up with our large foundry customers at the leading edge and the DRAM customers that are selling HBM and, frankly, the NAND customers that are selling SSDs. That's how it shows up in our business. Thank you. You're welcome. Thank you. Our next question will come from Brian Chin with Stifel. Please go ahead. Hi. Good afternoon. Thanks for letting us ask a few questions. Maybe first, is the Vantex Oxide Etch win you referenced, is that for a 400-layer application? I'm not going to comment on exactly which technology node it is, but when I said multi-generational, you can interpret that as being everything from current generation through the next couple of generations. It's an important win because, again, customers tend to pick a new type of tool with the idea that they'll reuse that tool. They'll upgrade that tool for multiple technology nodes. Yeah, it's a significant win for us. Maybe just a quick follow-up on that, though, Tim. Do you think that the selection, if it's to be implemented at more recent nodes, suggests maybe a faster ramp upward in terms of vertical scaling? Vantex has been in the marketplace for quite a while. I think, as you know, there's been a lot of talk over the last couple of years about leadership within the dielectric high-aspect ratio etch space, particularly in NAND. I think that you've seen a tremendous amount of innovation from Lam. What I would just say is that our performance doesn't necessarily drive whether the customer scales faster or doesn't scale faster. That's driven by their own end market needs. What I would point out is what. The The key markets within NAND right now, one of them, of course, is QLC. If you have a very good Cryo edge process that produces a very vertical high-aspect ratio memory hole, you're more likely to be successful creating a QLC device. I think what Lam does with our customers, and we're engaged so closely with them, is we try to create the technologies that allow them to create the devices that make them successful. When they're successful, then they move quickly. I think that's what we're seeing, not just in Vantex, but in many of the other items. Like I talked about faster read-write speed and the relatively quick adoption we're seeing now of Mali in NAND. A very similar kind of thing, enabling technology. Okay. Great. No, great. Maybe SSD. Very worthy. Maybe a quick follow-up question on CSBG. Just to slightly decompose it, upgrades likely up QNQ. Business overall up a little QNQ. Do you think that off the June quarter, that Reliant has maybe largely bottomed out or stabilized here, even if you're not necessarily wanting to signal for some recovery in that part of the business? Yeah, Brian, I'm not going to get in the habit of decomposing a forward-looking statement on CSBG. It is stronger than we previously thought, though, in total, right? Previously, we've been describing we thought it was going to be flattish. I know we said we think it'd be modestly up. That's good. Upgrades are extremely strong. Service and spares are doing well, and Reliant is down right now. That's kind of how to think about it. Okay. Thanks. Thanks, Brian. Our next question will come from Tom O'Malley with Barclays. Please go ahead. Hey, guys. Thanks for taking my question. Doug, you mentioned the tariff environment is very different in the December quarter versus the September quarter. I was curious if you could unpack that a little. Are you referring specifically to 232, any of the country-specific tariffs? What are you seeing as the most impactful quarter-over-quarter, September, December? I didn't really say it was—I forget what word you used. There are more tariff headwinds in December than there are in September. That's all we communicated. That's all I was trying to communicate. Gotcha. On the customers in China, I think Stacy went through it with you guys, but more specifically, going into September, you obviously felt like there would be a falloff, and in a very short window, those customers came back. Is December really a view of conservatism as you expect? Is this a one-time kind of comeback from the China customers, or in Q4, is this more of a conservative outlook, or do you think that you could see customers stepping back in? Obviously, the lead time here seems like it's relatively short to service these guys. Thank you. When we describe the business, we don't try to be conservative or aggressive. We call it like we see it, and that's exactly what we're doing right now. Our next question will come from Charles Shi with Needham. Please go ahead. Hi, yeah. Thanks for taking my question. I want to double-click on some of your China guidance numbers there. Maybe this is for Doug. I think based on your guidance for the next two quarters, it looks like your China, I know we have to back out some of the multinational numbers from your China revenue, looks like domestic China revenue looks like it's tracking flattish year- over- year. Is that right? The prevailing view for China WFE, this is still a down year. Is it really about outperformance, company idiosyncratic factors, or is that because you did add $5 billion to WFE number forecast for this year? Maybe your view on China WFE is kind of shifting towards maybe this is not really a down year for China WFE. Thanks. Yeah. Boy, you put a lot in there, Charles. I'm not going to get into global multinationals year- over- year, blah, blah, blah. It was up decently in the current quarter. We upsided China WFE in total a little bit and then described a view that it's flat to maybe slightly down in the composition of what we're seeing. That's the color we provided. Thanks. Operator, we'll do one more question. Of course. Our last question here will come from Timm Schulze-Melander with Rothschild. Please go ahead. Yeah. Hi there. Thanks for taking my questions. I think maybe they're questions for Tim. The first one was on Mali. Impressive that you already have positions in production. Just wanted to ask for some color. Maybe how should we think about your share, or how do you think about your share in Mali? What is that going to look like on maybe a one to three-year view? The second one was on advanced packaging. It was really just to ask about how do you think about the size and the profitability of that opportunity for Lam when you compare hybrid bonding with other 3D packaging technologies? Thank you. Okay. Great. I'll take the Mali one first. I guess we haven't put out a share projection for Mali, but if you look at where we are right now and where we've been, we've been the leader in ALD metallization in the tungsten space for many, many, many years. In many cases, it's tungsten that is transitioning to Mali, so we would expect to lead in that as well. We're the only company with ALD Mali in production in Foundry Logic. I mentioned a number of places where we're already running in NAND. Those are the two markets that are adopting Mali at this point. I think that from a share perspective, at this point, we're doing quite well, and we would expect to continue to do so as we gain more experience. There's a first-mover benefit in any of these markets. You get experience. You build that in. Your next applications and tools are better, and you just kind of keep building on that. It's been our recipe for many, many years. On advanced packaging, what I would say is the only thing we've sized up in the past, we said $1 billion last year. We said bigger this year. We didn't put out a specific advanced packaging number other than to lump it with gate all-around at $3 billion, more than $3 billion total. We're doing well. You think about our position. We have a very strong position in key applications like copper plating, many of the dielectric deposition processes. Almost regardless of the advanced packaging scheme, the more complex it is, the bigger our SAM gets. I think you asked about gross margin. We aim for it to be similar gross margins to all of our technology-enabling applications. Great. That's very helpful. Thanks very much, Tim. T hank you. Yeah. Thanks for the question. Operator, that concludes our prepared or our Q&A. Thank you, everyone, for joining the call today. We'll see you later in the quarter, I'm sure.