🏭 Tariffs? No Problem! Lam’s Advanced Manufacturing Shines in Q3 2025
Welcome, AI & Semiconductor Investors,
Lam Research flexed its manufacturing muscle this quarter, shrugging off tariff headwinds thanks to booming demand for its advanced etch and deposition solutions in foundry and memory upgrades. But will Intel's bold new strategy under CEO Lip-Bu Tan pay off, and is Texas Instruments finally signaling a broader semiconductor recovery? — Let’s Chip In.
What The Chip Happened?
🏭 Tariffs? No Problem! Lam’s Advanced Manufacturing Shines in Q3 2025
✂️ Intel’s Leaner, Faster Future: Bold Shake-Up Under New CEO
📊 Texas Instruments Says Industrial Rebound Driving Next Wave
[Vertiv Delivers Resilient Growth Amid Tariff Uncertainties]
Read time: 7 minutes
Lam Research Corporation (NASDAQ: LRCX)
🏭 Tariffs? No Problem! Lam’s Advanced Manufacturing Shines in Q3 2025
What The Chip: Lam Research just reported its Q3 2025 earnings on April 23, showcasing stronger-than-expected results despite looming tariff concerns. Revenue, gross margin, and EPS all exceeded midpoints of guidance, pointing to robust demand for Lam’s etch and deposition solutions. Especially in advanced foundry logic and NAND memory upgrades.
The Situation Explained:
🏭 Record Foundry Revenues: Foundry made up 48% of system revenue (a record in dollar terms), driven by gate-all-around technology, advanced packaging, and strong adoption of Lam’s new Akara conductor etch system.
💽 Memory Upgrades in Focus: NAND represented 20% of system revenue, largely tied to conversions from 1xx to 2xx layers. DRAM stood at 23%, reflecting technology upgrades to enable DDR5 and high-bandwidth memory (HBM).
💰 Gross Margins Reach New High: Gross margin of 49% this quarter was Lam’s highest since its 2012 merger with Novellus. Management expects margins to continue near-record levels next quarter thanks to its “close to customer” global manufacturing strategy.
🌐 Tariff Watch: Despite the new 2025 tariffs, management sees minimal near-term impact to customer spending plans. CEO Tim Archer said, “We have worked hard to diversify our manufacturing footprint, giving us flexibility to mitigate tariff-related disruptions.”
🏆 Technology Wins: Lam’s Striker SPARC ALD tool and ALTUS Halo molybdenum deposition gained traction in NAND, while the new Akara etch system secured DRAM and foundry logic wins. “Our competitive differentiation is enabling our customers’ competitive advantage,” Archer highlighted.
🛠️ Installed Base Upgrades: The upgrades business set records, with customers leveraging Lam’s existing footprint to optimize advanced nodes. CFO Doug Bettinger noted, “We saw record upgrade revenue as NAND and DRAM customers repurpose existing tools for new applications.”
🔮 Resilient Outlook: June quarter revenue guidance is $5B (± $300M), with gross margins edging even higher to 49.5% (± 1ppt). “We do not see any changes in customers’ long-term plans,” Bettinger emphasized, underscoring Lam’s confidence in outpacing broader wafer fab equipment growth.
Why AI/Semiconductor Investors Should Care: Lam’s quarter underscores how demand for next-generation chips, needed in everything from AI data centers to advanced packaging, is fueling strong tool sales and upgrades. The company’s ability to drive technology inflections (e.g., gate-all-around, backside power, advanced packaging) positions it well for continued market share gains. As capital spending broadens across the globe, Lam’s flexible manufacturing strategy and leading etch/deposition solutions should keep it on investors’ radar for both near-term resilience and long-term growth potential.
Intel Corporation (NASDAQ: INTC)
✂️ Intel’s Leaner, Faster Future: Bold Shake-Up Under New CEO
What The Chip: On April 24, 2025, Intel delivered its Q1 earnings under new CEO Lip-Bu Tan’s leadership and announced a sweeping plan to flatten the organization, reduce spending, and reignite innovation. They beat guidance on revenue and earnings, but warned of macroeconomic uncertainty, tariffs, and the need for a leaner operating model.
The Situation Explained:
📈 Strong Q1 Numbers: Intel posted Q1 revenue of $12.7 billion, with non-GAAP gross margins of 39.2% and EPS of $0.13, all above prior guidance. CFO David Zinsner noted demand outperformed, thanks to robust Raptor Lake PC sales.
✂️ Cutting Costs & CapEx: Intel will lower annual OpEx to $17B in 2025 and $16B in 2026. CapEx for 2025 is now guided at $18B (down from $20B), reflecting Lip-Bu Tan’s move to “eliminate inefficiencies and transform how we do business.”
⚠️ Tariffs & Macro Worries: Management cautioned that new trade policies and potential tariffs could constrain second-half demand. While Q1 demand was healthy, Intel is planning conservatively for a possible slowdown.
🤖 Refocused AI Strategy: Lip-Bu Tan highlighted a holistic AI approach, investing in new workloads—like reasoning and “agentic AI”—to recapture growth. “We must remain laser-focused on execution,” he said.
💰 Altera Partial Sale: Intel sold 51% of its Altera unit to Silver Lake for net proceeds of $4.4B. This helps shore up its balance sheet while still retaining a 49% stake in the FPGA business.
⚙️ Operational Shake-Up: The new CEO is flattening Intel’s organizational structure, mandating four days in the office weekly by Q3 2025, and aiming to speed up decision-making, especially in its core client and server lines.
💬 Quotes Worth Noting:
Lip-Bu Tan: “Organizational complexity has suffocated our innovation… I’m here to fix this.”
Michelle Holthaus (Intel Products CEO): “We want a very strong say-do ratio. We’re committing to numbers we can beat.”
Why AI/Semiconductor Investors Should Care: Intel’s pivot under Lip-Bu Tan underscores a major push to regain lost market share and stay relevant in the fast-evolving AI landscape. Investors should watch how these cost cuts, cultural changes, and product road map shifts (like 18A process technology) play out amidst looming tariffs and macro headwinds. If Intel executes, it could stabilize margins, spark new AI-driven growth, and position itself to compete more effectively in data center and client computing over the long run.
Texas Instruments (NASDAQ: TXN)
🏗️Industrial Rebound Driving Next Wave
What The Chip: On April 23, 2025, Texas Instruments announced first-quarter results showing revenue of $4.1 billion, up 11% year-over-year, fueled by a strong rebound in industrial demand. Management highlighted caution around newly imposed tariffs but doesn’t see an immediate Q2 impact, guiding revenue between $4.17 billion and $4.53 billion.
The Situation Explained:
📊 Strong Q1 Numbers: Revenue rose 2% sequentially and 11% year-over-year. Analog led with 13% growth, while Embedded Processing stayed roughly flat.
🏗️ Industrial Recovery: CEO Haviv Ilan emphasized industrial demand is “really joining the pack” of recovering end markets, citing low customer inventories and a bounce-back after multiple quarters of decline.
🚗 Automotive Uptick: Auto grew modestly, continuing its slow but steady climb despite broader market uncertainties.
🌐 Geopolitics & Tariffs: Management remains vigilant about rising tariffs and supply chain disruptions, but “we don’t see near-term impact to Q2,” said Ilan.
🏭 Capacity Focus: TI’s multiple wafer fabs (including in the U.S., China, Germany, and Japan) give it what Ilan calls a “geopolitically dependable capacity” that can flex as market conditions shift.
💰 Capital Allocation: TI returned $6.4 billion to shareholders over the last 12 months (via dividends and repurchases), ended the quarter with $5 billion in cash, and carries $12.95 billion in debt at a 3.93% average coupon.
👥 Management Transition: Dave Pahl will retire from Investor Relations; Mike Beckman steps in after two decades at the company.
Why AI/Semiconductor Investors Should Care: Texas Instruments’ results signal an industrial rebound that could foreshadow broader semiconductor market recovery. Investors should watch how tariffs affect supply chains in the coming quarters and how TI’s diverse manufacturing footprint positions it to navigate ongoing uncertainties. In a tight chip cycle with low inventories, TI’s capacity investments and flexible manufacturing could become critical competitive advantages.
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Disclaimer: This article is intended for educational and informational purposes only and should not be construed as investment advice. Always conduct your own research and consult with a qualified financial advisor before making any investment decisions.
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[Paid Subscribers] Lam Research Delivers Strong Q3 2025 Results Amid Growing Foundry and NAND Momentum
Date of Event: Wednesday, April 23, 2025
Executive Summary
*Reminder: We do not talk about valuations, just an analysis of the earnings/conferences
Lam Research Corporation (NASDAQ: LRCX) reported third quarter earnings for the period ending March 30, 2025, showcasing strong execution across several business segments, particularly in foundry and NAND memory. Key quarterly highlights include an 8% sequential revenue increase to $4.72 billion, a record non-GAAP gross margin of 49%, and a new high mark in foundry-related revenue.
“We delivered a record quarter for foundry revenues, demonstrating our solid product momentum in leading-edge technology inflections,” said Tim Archer, President and Chief Executive Officer of Lam Research. The Company reported non-GAAP diluted earnings per share (EPS) of $1.04, topping internal forecasts and driven by a favorable product mix, customer upgrades, and operational efficiency gains.
Lam’s management emphasized three major themes during the call:
Accelerating Technology Conversions in NAND: Customers continue upgrading from 1xx-layer to 2xx-layer NAND, fueling Lam’s upgrades business.
Ongoing Strength in Leading-Edge Foundry: Foundry revenues reached an all-time high, accounting for 48% of system revenue, versus 35% just one quarter ago.
New Product Momentum: Solutions such as the Akara system (for advanced conductor etch) and SPARC atomic layer deposition (ALD) helped Lam reinforce market share gains.
The leadership team also noted that, despite a dynamic geopolitical environment and emerging tariff considerations, customer spending has generally remained in line with prior plans. Looking forward, Lam reaffirmed its expectation of overall wafer fabrication equipment (WFE) spending near the $100 billion range for calendar year 2025, with ongoing technology road map investments driving future demand.
Below is a data-driven exploration of the quarter’s highlights, growth opportunities, key products, and the Company’s evolving strategic outlook.
Growth Opportunities
One of Lam’s key discussion topics for this quarter centered on the growth potential in both advanced foundry and NAND segments. Management sees the following drivers accelerating Lam’s growth:
Rising Device Complexity and Deposition/Etch Intensity
As chipmakers transition to architectures like Gate-All-Around (GAA) transistors in logic/foundry, Lam anticipates increased etch steps and advanced deposition layers. This transition naturally benefits Lam’s product portfolio, which includes conductor etch, plasma etch, and plasma-enhanced chemical vapor deposition (PECVD) systems.
Transition to Higher Layer NAND