KLA Corp at Bank of America Global Technology Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Vivek Arya - BoFA Securities - Analyst : What I thought we could start with Bren is maybe at the high level in '22, you had an Analyst Day where you laid out the target of 9% to 11% top line growth getting to $14 billion in sales and $38 in earnings. I was just hoping that you could maybe take a step back and tell us where KLA is in that journey? And what needs to happen from an industry perspective, what needs to happen from a KLA perspective to make progress towards that goal?

Question: Vivek Arya - BoFA Securities - Analyst : So you take that, that's our systems business gets up somewhere closer to 10% as a result of that. And then you take our service business where we updated our long-term service model to be 12% to 14% through cycle growth. That was up from 9% to 11%, and we're seeing a number of factors that are driving this. The biggest being obviously, the growth in systems, which you have tools that go out of warranty and come onto contract. And our attach rate is very high in excess of 90% and about 75% of the revenue is subscription-like contracts. So we get a contract stream with an average of about three years. So pretty predictable service revenue stream over time. You also have the extending life of our systems in the field that are servicing a number of markets where you're seeing rising semiconductor content?

Question: Vivek Arya - BoFA Securities - Analyst : That's great. Very comprehensive. We'll talk about the product side of the business, but the services business up, KLA I find fascinating because it is not really cyclical per se because with a lot of your peers, what I find is what is classified in services, right is a lot of cyclical usage-based spares upright as refurbishment of old equipment right. Of course, that is a maintenance part of it, right, that it is more subscription based. So talk to us about maybe help us unpack what is in your services business and what is helping it to grow 12% to 14% this year, even though, overall tool spending is really not growing that much this year?

Question: Vivek Arya - BoFA Securities - Analyst : Maybe one kind of near the median term question. As we look at the demand for wafer fabric equipment this year, how is second half looking versus the first half, right? What are the moving pieces in terms of whether it's by end market or whether it's by geography, China demand, second half versus (inaudible) as well?

Question: Vivek Arya - BoFA Securities - Analyst : Does HBM require higher process control intensity than DRAM? I would assume, so, right. Because yields are still low, but it's consuming a lot of wafers. So is it still -- I assume it's not as close to what logic process control intensity would be, but does that become a drag or higher process control?

Question: Vivek Arya - BoFA Securities - Analyst : You mentioned that, so historically, the mix of foundry logic to memory has been this 55% -- 45% or so in WFE. I think it was testing something in the 60%s field from Applied earlier today. They also suggested something in the 60%s, right? So it's more like 65%, 35%. Shouldn't that be favorable to KLA, because it doesn't -- it mix up process control intensity. My only part B of that question, how much of that is going to be taken up more by [little]? So ex that part of the wallet, right. Like what drives process control intensity higher from here? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 06, 2024 / 5:40PM, KLAC.OQ - KLA Corp at Bank of America Global Technology Conference

Question: Vivek Arya - BoFA Securities - Analyst : I wanted to touch on advanced packaging. I think about $400 million this year happened specialty markets, maybe tell us where exactly does KLA play in advanced packaging? And how correlated is it to just the growth in the accelerator market?

Question: Vivek Arya - BoFA Securities - Analyst : Are there parts of advanced packaging where you don't play yet because we look at a number of other smaller companies who are seeing 30%, 40% growth rate. So are there parts of the market where you don't play yet, where KLA can play, but in meeting your business model, of course?

Question: Vivek Arya - BoFA Securities - Analyst : Got it. I know it seems a little early for '25, but given the lead times for your tools, maybe you could help quantify what the lead times are? What is the early preview of what 25 might look like?