Lam Research delivers strong results, forecast as electronics demand recovers
(Reuters) - Lam Research forecast third-quarter revenue largely above analysts' estimates and topped expectations on Wednesday, as chipmakers placed orders for the company's manufacturing equipment on a rebound in demand for electronics products.
The company had struggled last year with the fallout from an inventory buildup at chipmakers following dwindling demand for mobiles to computers.
Some of those categories are showing signs of recovery just as a boom in artificial intelligence is prompting chip firms to expand capacity.
Fremont, California-based Lam expects current-quarter revenue of $3.7 billion plus or minus $300 million, compared with the average analyst estimate of $3.68 billion, according to LSEG data.
It forecast net income per share of $6.9 plus or minus $0.75, also higher than expectations of $6.64.
The company's shares rose nearly 2% in trading after the bell.
Earlier on Wednesday, Dutch computer chip equipment maker ASML disclosed a growing order backlog that pointed to a computer chip market recovery.
Lam's revenue from China as a percentage of total sales dropped to 40% in the December quarter, compared to 48% in the prior quarter as a result of U.S. export restrictions.
Revenue of $3.76 billion for the quarter ended Dec. 24 beat estimates of $3.71 billion. Excluding items, profit fell to $7.22 per share, compared with estimates of $7.1.
Strong results at Taiwan Semiconductor Manufacturing Co, the bellwether of the chip sector, and a rebound in certain electronics markets, are boosting business at suppliers like Lam. TMSC projected 20% growth in 2024 revenue on booming demand for high-end chips used in for AI applications, compared to an over 4% drop last year.
Meanwhile, global shipments of smartphones rose 8.5% in the fourth quarter of 2023, according to International Data Corp, but declined 3.2% for the year.
(Reporting by Yuvraj Malik in Bengaluru; Editing by Sriraj Kalluvila)
