Lam Research Forecasts Revenue of $3.7 bn for Dec Quarter Amidst Sluggish Chip Demand

Lam Research, a chip-making tools supplier based in Fremont, California, announced robust revenue of $3.48 billion for the September quarter of 2023, reflecting a steady growth trajectory.
Lam ResearchThe company cited a gross margin of $1.65 billion, constituting 47.5 percent of revenue, with operating expenses amounting to $632 million. Notably, operating income stood at 29.4 percent of revenue, resulting in a net income of $887 million.

This quarter’s performance demonstrates notable progress compared to the preceding quarter ended June 25, 2023, where Lam Research reported a revenue of $3.21 billion and a gross margin of $1.46 billion, constituting 45.5 percent of revenue. Operating income for this period was 26.6 percent of revenue, resulting in a net income of $803 million, or $5.97 per diluted share.

“Lam continues to deliver strong results despite a cyclically soft year for wafer fabrication equipment spending,” said Tim Archer, Lam Research’s President and Chief Executive Officer. “There are tremendous growth vectors ahead for Lam, and we are investing strategically to drive long-term outperformance.”

China emerged as a significant contributor to Lam Research’s first-quarter revenue, accounting for 48 percent, showcasing a substantial increase from the previous year’s 30 percent. This emphasizes the evolving dynamics within the global chip market and the company’s considerable reliance on Chinese demand. Other key contributors to sales included Korea (16 percent), Japan (9 percent), the United States (8 percent), Taiwan (7 percent), Europe (7 percent), and South East Asia (5 percent).

Looking ahead, Lam Research projects a revenue of $3.7 billion for the quarter ending December 24, 2023. The company attributes this forecast to persistently sluggish consumer spending on electronics, impacting chip demand. This prediction aligns closely with ASML Holding’s recent warning of flat sales, further emphasizing the challenges faced by the chip industry due to constrained demand from chipmakers.

The semiconductor market, encompassing critical sectors like smartphones, PCs, and data centers, is currently grappling with reduced consumer spending on electronic devices. This caution in spending is prompted by concerns surrounding uncertain global economic growth, persistent inflation, and escalating borrowing costs.

Notably, Taiwan Semiconductor Manufacturing Company (TSMC), the world’s leading contract chipmaker, has taken precautionary measures by instructing its key suppliers to delay the delivery of high-end chipmaking equipment in September, citing concerns about customer demand.

Lam Research continues to navigate these challenges and capitalize on evolving market dynamics, striving to maintain its growth trajectory amid a fluctuating global landscape in the chip industry.