Lam Research Posts Record $8.22 Billion Quarter as China Share Rebounds

Lam Research's China share rebounded to 35% of sales in its September quarter as the semiconductor-equipment maker posted record revenue, even as U.S. export licensing limits continued to weigh on its business.

Revenue for the quarter ended Sept. 27 reached $8.219 billion, a record. The total compared with $6.722 billion in the June period and $5.324 billion a year earlier, representing a 22% sequential increase. Lam's quarterly revenue record included sales across several Asian markets.

China accounted for 35% of revenue, up from 26% in the June quarter but below 43% a year earlier. South Korea contributed 20%, with revenue of $1.63 billion, more than double the $780 million recorded a year before. Taiwan represented 18%, down from 27% in June, while the United States accounted for 8%. U.S.-attributed revenue, measured by customers' fab locations, was $660 million, compared with $300 million a year earlier. Japan made up 9% of sales, Southeast Asia 6% and Europe 4%.

Lam's risk disclosures identify expanded U.S. export licensing requirements as a constraint on its China market that has reduced revenue. The company said the effect could grow. China revenue was $2.89 billion for the quarter.

Systems revenue, which includes equipment used in deposition, etching and cleaning, rose about 35% from June to $5.73 billion. Customer support and other revenue totaled $2.49 billion, close to $2.47 billion in the prior quarter. The figures show that systems accounted for most of the sequential revenue increase.

Under generally accepted accounting principles, Lam posted a 52.3% gross margin and a 40% operating margin. Diluted earnings were $2.19 per share. CEO Tim Archer linked the results to stronger semiconductor demand from AI and growing component complexity. He said investments in technology transitions and manufacturing capacity were beginning to pay off.

For the December quarter, Lam forecast revenue of $8.6 billion, with a range of $400 million above or below that estimate. It projected a 52.5% gross margin and a 40.5% operating margin, each with a one-percentage-point range. The company forecast diluted earnings of $2.33 per share, plus or minus 15 cents.