Despite broader semiconductor industry headwinds, Lam Research delivered Q4 revenue of $5.28B, down 31.1% YoY but showing sequential stability. China emerged as a bright spot, representing 24% of revenue - up significantly from historical levels. Gross margins improved 130bps QoQ to 45.1% through operational efficiency initiatives, though still down YoY. Management's strategic pivot to expand customer support revenues and diversify geographic exposure positions the company well for 2023 recovery.
Memory customer concentration during cyclical downturn
Supply chain disruptions impacting margins and lead times
Competitive pressure in mature nodes affecting pricing
Key Opportunities
China fab expansion driving $15B+ investment cycle
Advanced packaging TAM expansion of $3B by 2025
Services business targeting 40%+ of revenue by 2025
New product cycles in GAA and backside power delivery
Bottom Line
Lam Research demonstrated effective navigation of semiconductor downturn through strategic diversification and operational execution. Key metrics including sequential gross margin improvement, growing deferred revenue, and maintained R&D investment signal long-term strength despite near-term headwinds. Management's focus on China opportunity and services expansion provides growth vectors while efficiency initiatives protect profitability. The combination positions Lam advantageously for anticipated industry recovery while expanded TAM opportunities in advanced packaging and new architectures offer additional upside. Critical metrics to watch include China revenue sustainability, services attachment rates, and memory customer capex plans.