Lam Research CEO Tim Archer Talks AI Infrastructure Buildout
Lam Research is announcing a major expansion of its semiconductor research and development footprint in Oregon, as part of a $1.5 billion investment in the state.
Lam Research CEO Tim Archer discusses the expansion and the state of the AI infrastructure buildout. He speaks with hosts Tim Stenovec and Lisa Mateo, along with Bloomberg Tech co-host Ed Ludlow.
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Speaker 1: Bloomberg Audio Studios. Podcasts.
Speaker 2: Radio. News.
Speaker 1: We've got with us the CEO of Lamb Research, Tim Archer,
Speaker 1: who joins us alongside Ed Ludlow, the host of Bloomberg Tech.
Speaker 1: Ed's out there in San Francisco. Tim is out there
Speaker 1: in Tualatin, Oregon. Tim, I want to get to this project.
Speaker 1: We'll get to it. But before we do, shares of
Speaker 1: Lamb Research just surged at the end of last month.
Speaker 1: This was Just after you reported results closing higher by
Speaker 1: close to 18%, you reported fourth quarter results and an
Speaker 1: outlook for adjusted earnings that beat expectations. You said in
Speaker 1: a statement at the time that record revenue, operating margin,
Speaker 1: and earnings per share, out of record, as AI-driven demand
Speaker 1: continues to reshape the semiconductor industry, can you give us
Speaker 1: some color of what you've seen day-to-day over the past
Speaker 1: four weeks that show what you're seeing with demand right now?
Speaker 2: Well, thanks very much for having me today. Look, I
Speaker 2: think those results just indicate we're in an accelerating demand
Speaker 2: environment for semiconductors. And what LAM does, I think most
Speaker 2: people realize, but we make the machines that help make
Speaker 2: all of those chips. And especially our strengths are in
Speaker 2: some of the most advanced manufacturing processes for chip making.
Speaker 2: So we're seeing tremendous demand with the AI build out
Speaker 2: and all the chips required to support AI. And I
Speaker 2: think that just Week by week by week, we continue
Speaker 2: to just see not only, really, we don't talk a
Speaker 2: lot about capacity. In fact, the announcement we're making here
Speaker 2: today is about a new R & D lab. We're
Speaker 2: just seeing an acceleration of the pace of innovation, the
Speaker 2: capabilities of each of those chips. And it's something that
Speaker 2: we're investing to stay ahead of that demand.
Speaker 3: Tim, it's Ed in San Francisco. And you're right, we
Speaker 3: don't really talk about at least LAM in the context
Speaker 3: of more capacity. Your challenge... is to make increasingly tiny
Speaker 3: three-dimensional structures at atomic level precision. And that's only getting
Speaker 3: more difficult in the AI age. How do these lab
Speaker 3: investments help you get there?
Speaker 2: You know, one of the keys to really accelerating innovation
Speaker 2: is working very closely with our customers. And so one
Speaker 2: of the things that's very unique about the announcement and,
Speaker 2: you know, the groundbreaking we have here in Oregon, I mean,
Speaker 2: Oregon has been kind of the heart of the Silicon
Speaker 2: Forest for more than three decades. And so a lab
Speaker 2: here in Oregon puts us close to a lot of
Speaker 2: the advanced chip making that happens very close by here
Speaker 2: by some of our very large customers. And we also
Speaker 2: have labs in Asia and Europe as well to put
Speaker 2: us close to those customers. We think that by shortening
Speaker 2: that distance and really building incredibly tight collaboration with our
Speaker 2: customers who understand what those next problems are to be solved,
Speaker 2: that That accelerates the velocity of innovation with them for
Speaker 2: those next generations. So that's what's unique about our lab
Speaker 2: strategy and the type of work that's done.
Speaker 3: So Tim, why is the timing on this? I mean,
Speaker 3: why is LAM investing so heavily now?
Speaker 2: What does semiconductor manufacturing technology matter? Yeah, if you think
Speaker 2: about this, this lab here is part of a much
Speaker 2: bigger investment that we announced. It's $ 3 billion across that
Speaker 2: global lab network. And You know, why now? The pace
Speaker 2: of innovation. AI has fundamentally changed the rate at which
Speaker 2: we have to be innovating. You know, I look back
Speaker 2: just a few years ago and, you know, when the
Speaker 2: markets were driven by things like smartphones and PCs, that
Speaker 2: cycle was operating, you know, kind of on the every
Speaker 2: one to three years you needed to really innovate something new.
Speaker 2: AI has changed that requirement such that with new AI
Speaker 2: models coming every few months and each of those demanding
Speaker 2: more computational power, even better high bandwidth memory, even more storage.
Speaker 2: You know, LAM is looking to meet those needs. We
Speaker 2: are a manufacturer of machines that make each and every
Speaker 2: one of those types of devices. And so there's a
Speaker 2: lot of demand for us to continue to come out
Speaker 2: with the next great innovation and process in manufacturing technology
Speaker 2: to keep up. We've also seen a tremendous boom in
Speaker 2: what's called advanced packaging. It used to be that in
Speaker 2: most cases you built a single chip and it had
Speaker 2: a certain function. And you increased the performance of that
Speaker 2: chip by making it smaller and introducing new materials. Advanced
Speaker 2: packaging changes the game because now it is about putting
Speaker 2: many different types of chips together to create system level performance.
Speaker 2: And putting all of these chips together and stacking them
Speaker 2: into a three-dimensional architecture, it requires a lot of etch
Speaker 2: and deposition equipment. We said that our business in advanced
Speaker 2: packaging this year would be growing more than 70% year
Speaker 2: on year. And one of the particular tools, the copper
Speaker 2: electroplating tool that plays such an important role, that tool
Speaker 2: is actually developed and manufactured here in Oregon, which makes
Speaker 2: this such an important site for us.
Speaker 3: Tim, you know, it's really important to underscore NVIDIA, as
Speaker 3: an example, is not your direct customer, right? It is
Speaker 3: TSMC and the memory makers, right? but it is the
Speaker 3: demand for lead-edge chips across logic and memory, HBM, that
Speaker 3: is the story out in the world. How much of
Speaker 3: that growth in demand directly reads through to LAM, and
Speaker 3: how do you respond to it?
Speaker 2: Yeah, if you look at advanced chips today, one of
Speaker 2: the trends that just is, it's been around for a
Speaker 2: few years, and AI has really put it into hyperdrive,
Speaker 2: is the three-dimensional scaling of every device, and so Of course,
Speaker 2: that's been true in foundry logic with technologies like gate
Speaker 2: all around, introduction of gate all around, which is a
Speaker 2: three-dimensional transistor structure. But really, it comes to bear when
Speaker 2: you think about what high bandwidth memory is. High bandwidth
Speaker 2: memory is the stacking of multiple DRAM chips on top
Speaker 2: of each other to create higher bandwidth performance for AI.
Speaker 2: And so clearly, a three-dimensional architecture that requires a lot
Speaker 2: of etch-and-deposition equipment and a lot of innovation technology. for
Speaker 2: us to be able to support the manufacturer of those structures.
Speaker 2: NAND has been 3D, has had a 3D architecture since
Speaker 2: more than 10 years. And LAM has been a very
Speaker 2: strong player. In fact, it has traditionally been our strongest
Speaker 2: market because of that 3D architecture. And what we're seeing
Speaker 2: now is as other devices go 3D, it just drives
Speaker 2: a lot more demand for our specific types of equipment.