LRCX
#Yes, I mean, obviously, you have to ask them not us but clearly, the opportunity that exists from demonstrated performance benefits at the 10- and 7-nanometer technology nodes make it a very strategic and legitimate target for every Foundry and certainly, from the seat we have, everybody's focused on doing their best to get their fair share.
<UNK>wever, they define that technology inflection and none of this is easy and so we support all of our customers in whatever ambition they have to the best of our abilities.
I sense people are broadly focused on it and doing the best they can.
<UNK>, I would just point out that we're continuing to see nice investment profiles at 28-nanometer and above and obviously, that stuff is much broader based.
Yes, I think for sure, there are ambitious plans stated and there are active discussions, I think between customers and potential new domestic customers in <UNK>a with Lam and presumably with every other equipment company.
Our position and presence in <UNK>a is historically very strong in etch and deposition, both, so I think we have kind of good platform.
And as best we can tell, there are up to 20 active projects, certainly that we are focused on tracking in <UNK>a.
And I think the spending, or at least the significant spending, is more likely to be a calendar 2018 statement than calendars 2017 but I think there's a decent amount of statements that towards the end of 2017, we could start seeing something emerge.
So that's about the best I can give you at this point.
Thanks, <UNK>.
I think you just did a pretty good job answering your own question, actually.
Clearly, the single biggest SAM expansion in Foundry/Logic is patterning.
We've got some pretty important headlines that are Company-unique, I think, relative to microprocessor share gain momentum.
And our presence and share gains are both etch and deposition and they are on the front end and back end as far as interconnect as well as transistor level footprint.
So pretty holistic, pretty comprehensive and patterning is obviously a key driver.
Well, I say our view and it's still forming.
We are a long way from being definitive on it.
We said kind of flattish to maybe slightly down is the reference we have for Foundry.
We do expect that 28-nanometer and above investments in 2017 will be greater than they were in 2016, but to your point that's a capacity addition that is much cheaper than a leading-edge capacity addition.
Whether it turns out to be sufficient to make it neutral or grow kind of time will tell.
As best I can tell from customer disclosure, there's kind of a common view that capital intensity in Foundry is assumed to be kind of flattish and certainly, we're not in a position to message any different from that.
There's clearly a large amount of investment going in this year for 10.
And there's commitments and significant interest in what I think now is generally accepted to be a more valuable and probably more significant technology node at 7 and that looks like that's more of a second-half statement than first half at this point.
<UNK>, it's still kind of early for us to have a formulated view on 2017.
As we get closer to 2017 itself and we would normally give you more color when we are a quarter further down the road.
So check back with us in a quarter.
We will give you an updated view.
Well, certainly systems integration and packaging are very prominent parts of the strategies of our customers to overcome the limitations of physics in the front end and I think demonstrated performance and cost benefit is showing up there.
It's one of four technology inflections that we identified three or four years ago now that are relevant to the future of our Company.
It was then and still is the smaller of the four but as time passes, the through silicon etch via position and the strength that we have becomes more valuable and obviously, the presence of the Company in interconnect, copper position is also very strong.
So over time, I would expect the advanced packaging SAM to be more relevant and I think you know from prior disclosure where we're strong and where we're not.
I would say not as strong right now as it has been but reasonable evidence that strength is beginning to emerge.
So whether that's the first half or second half kind of reality, we will see.
I think it's more of a node transition statement.
Arguably, there are kind of 50,000 wafer starts per month, contractions in one year and maybe additions in another year and if I were to place a bet, I would say we probably end next year at or about the same in terms of wafer starts that we began the year but as you know, this has been a year of significantly reduced spending.
Our estimate is that DRAM investments is down 40% this year.
By the end of this year, we believe that approximately 50% of the installed base is 20-nanometer capable.
So there's a pretty significant opportunity for value creation for the customers in terms of cost reduction and performance from continued conversion and as is also true, the 1X world for DRAM is just beginning in calendar 2016.
And we think it will be the primary change to the installed base in calendar 2017 and if I were to guess, I would guess that at the end of next year, about half of the installed base in DRAM is a 20-nanometer maybe a quarter of the installed base is 1X and a quarter of the installed base is at 25 or above.
I think that's approximate segmentation of the 1 million, or 1.1 million wafer starts, depending on how you calculate it is kind of what we're looking at right now.
I said just on the 700, I said that was kind of the shipped capacity statement that we were coming up with, and I'm seeing other people say the same thing, slightly above 700,000.
That compares with the 425,000 that I referred to today in my prepared comments for the end of calendar 2016 and our estimate is that probably that's ---+ there's about 100,000, or slightly more than 100,000 wafer starts unqualified at the end of this year.
Probably a similar number at the end of next year and obviously, that exists in the context of 1.4, 1.5 maybe million wafer starts per month of capacity by the end of next year.
So a little bit more capacity and a lot more 3D NAND but in relative terms still 3D NAND installed base is the minority of the installed base by the end of next year.
Thanks, Wes.
I'm not sure I have something to hands ---+ to answer that question, <UNK>.
I apologize.
Obviously, at a macro level, when we last reported our $3 billion SAM reference, we framed SAM growth opportunity in DRAM at the 50% to 60% level through calendar 2018.
And in the patterning area specifically which is the single biggest kind of market expansion in DRAM that's relevant to our Company we characterized 15 to 25 steps; that's 20 nanometer going to 25 to 30 steps at 1X.
So that's about as helpful as I can be at this moment and we will take that question as long as ---+ as well as I think it was <UNK>'s question earlier around the SAM for each of the 3D NAND implementation scenarios and we will try and get some more information for you at the Analyst Meeting.
We will update that page for you, <UNK>.
We actually have more flexibility than perhaps you realize.
It takes a huge amount of effort so these are not kind of five-minute investments.
We are constantly assessing, not just capacity in our own factories but our supply chain and in our field service organizations for the installation because if you can make something but can't install it, you have a problem.
If you can install it but not make it, if you have a problem; if you can make it but not buy it, you have a problem.
A lot of effort focused on that.
We have nor will we ever have disclosure that speaks to the maximum capacity of the Company but it is more flexible.
We are challenging and stretching the entire Company, to be honest, but we believe we are executing with appropriate discipline and we are making investments to make sure that we have capacity to meet the expectations of our customers and continue to position the Company for sustainable growth.
So lots of moving parts, very complex, but we feel like we are doing a pretty good job, all things considered.
<UNK>, we have a phenomenal supply chain organization.
These guys are just super good at what they do.
So the execution of the Company has been really, really good from those guys.
Thanks, <UNK>.
<UNK>, I'd just point you back to the existing disclosed financial model is the best way to be thinking about the Company and obviously, I'll give you an update on that when we get to the 18th of November.
I'm not going to apologize for a 30 basis point, slight below midpoint on gross margin.
It's really hard with all the moving parts and different customer mix, things you have going on.
There's always going to be variability and we've been pretty consistently in that 45% to mid-46% gross margin range and that's kind of where the business runs.
It runs pretty effectively.
I think in context, again, just to put some more substance around what <UNK> just said, in our long-term model for calendar 2015 and 2016 in a world of $35 billion WFE, which we think is greater than the world we are actually living.
We said the ---+ we said we would aim for a $5.8 billion to $6.3 billion revenue range.
The sum of our reported results and guidance are at $6.3 billion.
So at a revenue level as a commentary on SAM and share; we are performing higher than we indicated in our long-term financial model.
In terms of targeted profitability levels, which includes gross margin and the investment in operating expenses, and as we said many times, our focus is more on OpInc than gross margin, our long-term model said we were targeting at 22 percentage points operating income and the sum of the results and guidance we've just given are 23%.
The long-term model also said there was a range of EPS targeted between $6 and $6.75, on by the way, a lower share count because when we put the model out, we weren't signaling to you that we would be in essentially a blackout period for 12 months because of the KLA transaction but against that $6 to $6.75 EPS reference, the sum of our results and guidance today are about $7.
So I would like you, in context, if I may ask for that.
I think the Company's performance financially is really nicely balancing growth and profitability and the trick here is balance.
It is super easy to drive profitability up and not grow.
It is really hard to architect a vision and then perform consistent with delivering profitable growth; that's our vision.
And that is what we believe we are executing and delivering and of course, if you're a member of Lam Research, long may that continue.
Thanks, <UNK>.
Well, As I know that you know <UNK>, nothing is quite as simple as it just transfers but obviously, demonstrated performance at 10-nanometer for positions won is a very strong reference point for selection at 7-nanometers and we feel very confident about that.
We are investing to achieve more than ---+ more market share at 7-nanometers than we have at 10-nanometers and I believe there are some pretty compelling reasons why we can deliver that.
Again, consistent with our long-term aspirations of the 3 to 5 percentage points and the 4 to 8 percentage points that we have for each of the product lines for the Company.
Thanks, <UNK>.
