Lam Research Corp Citi’s 2026 Global TMT Conference

I technically need to kick all of these things off with a reminder that the safe harbor language that is on our investor relations website is relevant to anything that I may say today. I may make forward-looking statements, but I'll be quite clear, I'm not going to tell you anything new today. It'll be consistent with everything you've heard from the company before. If you have an expectation something new is coming out, it's probably not. But please have a look at our safe harbor nonetheless. So there, my lawyers will be happy, Atif.

All right. Now we can get going.

Yeah. Listen, as we've gone through this year, we've moved our view of WFE up from $135 billion to $140 billion, now to low $150 billion, to your point. Basically what has happened is everybody in the industry, clean room is what's constraining the investment right now, right? The industry is fundamentally under-supplying demand, and clean room is a constraint. What I observe has happened is every one of our customers, or nearly every one of our customers, has figured out how to do a little bit more with what they had. Squeeze things a little bit closer together, perhaps. Frankly, we've done a lot of that, and we can talk about that, Atif, as well. Maybe pull some things forward, maybe buy some clean room that was there and make it production worthy a little bit quicker than anyone expected.

As the year has progressed, that's basically what has happened. However, the industry is still under-supplying demand, and that leads to our confidence in next year being a growth year. I think everybody that you listen to right now is communicating that. We say that because we see clean rooms coming online. We have described, Atif, 8 to 10 new, what I would call tier 1 fabs coming online over the course of the next year, basically, or through the end of 2027. That reinforces our confidence in the fact that WFE is going to grow into next year. The constraint will still be there. However, it will get somewhat better.

When we look at that, when we do our own tops-down analysis, which Ram and his team do for the company, we continue to see AI demand remaining very strong, moving beyond training, into inferencing, into eventually Physical AI, and that gives us confidence also in the need to invest more. That is basically what is happening. It is a tops-down and bottoms-up assessment of what is going to be able to be supported next year. Frankly, I think the year after that probably continues to be even stronger than that.

Yeah, it is a combination of both. We kind of looked at the timing of when we gave that number. It was the most pertinent thing, right? Everybody was talking about how many gigawatts of data centers are coming. We felt that was the most useful thing for you guys to think about the industry, and specifically how the tiering between leading-edge foundry logic DRAM and NAND was. So we gave that number. You are correct, since then, we upticked that number by a couple of billion. When we first came out, actually, people said, "Oh, you are being optimistic on that number," right? Then lo and behold, it has become even better than that. The uptick is all three. If you look at it, we used the initial flavors of the hardware that came out.

The large GPU maker had released some new versions of their latest GPU, and we used that as a benchmark on the industry pricing on capital intensity to come up with that number. Since then, things have inflected higher, both on the hardware content as well as on the intensity side. If you remember, we recently took up the NAND SAM per wafer from 1.8x that we gave at the analyst day to 2x. The complexity of these devices also is a little bit higher than what we originally included in that model. That was the gist of how we had taken that number up.