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1. Company Snapshot

1.a. Company Description

Lam Research Corporation designs, manufactures, markets, refurbishes, and services semiconductor processing equipment used in the fabrication of integrated circuits.The company offers ALTUS systems to deposit conformal films for tungsten metallization applications; SABRE electrochemical deposition products for copper interconnect transition that offers copper damascene manufacturing; SOLA ultraviolet thermal processing products for film treatments; and VECTOR plasma-enhanced CVD ALD products.It also provides SPEED gapfill high-density plasma chemical vapor deposition products; and Striker single-wafer atomic layer deposition products for dielectric film solutions.


In addition, the company offers Flex for dielectric etch applications; Kiyo for conductor etch applications; Syndion for through-silicon via etch applications; and Versys metal products for metal etch processes.Further, it provides Coronus bevel clean products to enhance die yield; Da Vinci, DV-Prime, EOS, and SP series products to address various wafer cleaning applications; and Metryx mass metrology systems for high precision in-line mass measurement in semiconductor wafer manufacturing.The company sells its products and services to semiconductors industry in the United States, China, Europe, Japan, Korea, Southeast Asia, Taiwan, and internationally.


Lam Research Corporation was incorporated in 1980 and is headquartered in Fremont, California.

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1.b. Last Insights on LRCX

Lam Research's recent performance was driven by robust financials, record revenues, and strong margins in the September quarter. The company's AI-driven chip demand momentum remains a key growth driver. Analysts have upgraded their ratings, with Sanford C. Bernstein raising their price target to $175.00. Additionally, institutional investors have increased their stakes, including Black Creek Investment Management Inc. and Advisors Asset Management Inc. The company's low-debt capital structure and operational efficiency also contribute to its positive outlook.

1.c. Company Highlights

2. Lam Research Corporation Delivers Record Quarterly Performance

Lam Research Corporation reported a record September quarter with revenue of $5.3 billion, up 3% from the June quarter, and a gross margin of 50.6%. The company's operating margin was 35%, a record in the post-Novellus period. Earnings per share (EPS) came in at $1.26, beating analyst estimates of $1.22. The strong financial performance was driven by the foundry segment, which accounted for 60% of systems revenue, with investments at the leading edge and mature node spending in China. The customer support business group generated $1.8 billion in revenue, driven by strength in spares and upgrades.

Publication Date: Oct -23

📋 Highlights
  • Record Revenue and Margins:: Lam reported $5.3B revenue (3% QoQ growth) and a 50.6% gross margin, with operating margin at 35%, a post-Novellus record.
  • Foundry and Memory Revenue Mix:: Foundry accounted for 60% of systems revenue, while memory contributed 34% (18% nonvolatile, 16% DRAM).
  • China Regulatory Impact:: The 50% affiliate rule is expected to cost $200M in 2025 and $600M in 2026, reducing China revenue to below 30% by 2026.
  • Customer Support Strength:: CSPG generated $1.8B revenue, driven by spares/upgrades, with operating margin outperforming corporate averages.
  • 2026 Growth Drivers:: $40B NAND upgrade TAM, $8B WFE from data centers per $100B investment, and AI-driven WFE growth to offset China headwinds.

Segment Performance and Outlook

Foundry accounted for 60% of systems revenue, driven by investments at the leading edge and mature node spending in China. Memory was 34% of systems revenue, with nonvolatile memory at 18% and DRAM at 16%. The company expects a $200 million revenue impact from the 50% affiliate rule restricting shipments to certain domestic China customers, which is expected to affect calendar year 2026 revenues by approximately $600 million. For the December quarter, Lam expects revenue of $5.2 billion and a gross margin of 48.5%.

Growth Prospects and Valuation

Lam Research is poised to close a record calendar year 2025 and expects solid WFE growth in 2026, driven by AI-related demand. Analysts estimate next year's revenue growth at 12.4%. With a current P/E Ratio of 33.59 and an EV/EBITDA of 27.3, the market appears to have priced in significant growth expectations. The company's ROIC of 34.17% and ROE of 58.48% indicate strong profitability. The $40 billion TAM for NAND upgrades is on track, with some acceleration in demand, and Lam's upgrade business in NAND will remain strong in 2026.

Drivers of Growth and Challenges

Data center investments will drive growth, with an estimated $8 billion of WFE for every $100 billion in data center investment. Lam's opportunity in this space is growing due to its products required for leading-edge nodes. However, clean room space availability could be a limitation for WFE growth in 2026. China's revenue will drop below 30% next year, likely a $1.5 billion headwind, but global multinationals will offset this.

New Products and Future Prospects

Lam Research's new products, such as Acara and Altus Halo, are seeing increased engagement, particularly in foundry logic and DRAM applications. Backside power contributions are expected to ramp in the next couple of years, with no changes to the timing or magnitude. The company's ability to work with customers in an agnostic way allows them to adapt to different customer needs, positioning Lam Research for continued growth.

3. NewsRoom

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Groupe la Francaise Has $5.05 Million Holdings in Lam Research Corporation $LRCX

Dec -04

Source: defenseworld.net

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Fisher Asset Management LLC Sells 469,613 Shares of Lam Research Corporation $LRCX

Dec -03

Source: defenseworld.net

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Lam Research: AI Foundry Growth Keeps The Upside Case Alive

Dec -02

Source: seekingalpha.com

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Lam Research Corporation (LRCX) Presents at UBS Global Technology and AI Conference 2025 Transcript

Dec -02

Source: seekingalpha.com

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Lam Research Corporation $LRCX Stake Decreased by Brentview Investment Management LLC

Dec -01

Source: defenseworld.net

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Potentially 12%-15% Consistent Income: Monthly Options Series (December 2025)

Nov -30

Source: seekingalpha.com

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Artisan Select Equity Fund Q3 2025 Portfolio Review

Nov -27

Source: seekingalpha.com

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Lam Research: Fundamentals Remain Solid And I Remain Bullish

Nov -27

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (11.00%)

6. Segments

Manufacturing and Servicing of Wafer Processing Semiconductor Manufacturing Equipment

Expected Growth: 11.0%

Lam Research's wafer processing semiconductor manufacturing equipment growth (11.0%) is driven by increasing demand for advanced semiconductors, rising complexity of chip designs, and expansion of manufacturing capacity by semiconductor producers. The company's strong portfolio of innovative equipment solutions and growing market share also contribute to its growth.

7. Detailed Products

ETCH PRODUCTS

Lam Research's etch products are designed to remove material from a substrate, typically silicon, during the fabrication process. These tools use various etch techniques, including plasma-based etching, to create precise patterns on the substrate.

DEPOSITION PRODUCTS

Lam Research's deposition products are designed to deposit thin films of material onto a substrate, typically silicon, during the fabrication process. These tools use various deposition techniques, including chemical vapor deposition (CVD) and atomic layer deposition (ALD).

CLEANING PRODUCTS

Lam Research's cleaning products are designed to remove contaminants and impurities from substrates, typically silicon, during the fabrication process. These tools use various cleaning techniques, including wet cleaning and dry cleaning.

STRIP AND CURE PRODUCTS

Lam Research's strip and cure products are designed to remove photoresist and other organic materials from substrates, typically silicon, during the fabrication process. These tools use various strip and cure techniques, including plasma-based strip and cure.

8. Lam Research Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

The semiconductor industry is highly specialized, and Lam Research Corporation's products are crucial for the manufacturing of semiconductors. The threat of substitutes is low as customers rely heavily on Lam's equipment for their manufacturing processes.

Bargaining Power Of Customers

Lam Research Corporation's customers are primarily large semiconductor manufacturers. While they have some bargaining power due to their significant purchasing volumes, Lam's dominant position in the market and the critical nature of its equipment limit the customers' ability to negotiate aggressively.

Bargaining Power Of Suppliers

Lam Research Corporation has a diverse supplier base and is not heavily reliant on any single supplier. This reduces the bargaining power of suppliers, allowing Lam to maintain stable and favorable supply terms.

Threat Of New Entrants

The barriers to entry in the semiconductor equipment industry are high due to significant research and development costs, complex technology, and established relationships with customers. This makes it difficult for new entrants to compete effectively, reducing the threat to Lam Research Corporation.

Intensity Of Rivalry

The semiconductor equipment industry is highly competitive, with a few major players competing for market share. The competition is intense, with companies constantly innovating and improving their products to gain an edge over their rivals.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 36.85%
Debt Cost 4.33%
Equity Weight 63.15%
Equity Cost 12.14%
WACC 9.26%
Leverage 58.36%

11. Quality Control: Lam Research Corporation passed 8 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Lam Research

A-Score: 5.5/10

Value: 0.8

Growth: 8.1

Quality: 8.3

Yield: 2.0

Momentum: 9.0

Volatility: 4.7

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A-Score: 5.4/10

Value: 0.8

Growth: 8.4

Quality: 7.9

Yield: 2.0

Momentum: 8.5

Volatility: 5.0

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Broadcom

A-Score: 5.4/10

Value: 0.0

Growth: 7.6

Quality: 8.1

Yield: 3.0

Momentum: 9.5

Volatility: 4.0

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Applied Materials

A-Score: 4.9/10

Value: 1.6

Growth: 8.1

Quality: 8.1

Yield: 2.0

Momentum: 5.0

Volatility: 4.7

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Texas Instruments

A-Score: 4.5/10

Value: 1.5

Growth: 3.6

Quality: 6.9

Yield: 6.0

Momentum: 3.0

Volatility: 6.0

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Microchip Technology

A-Score: 3.3/10

Value: 2.9

Growth: 1.9

Quality: 3.6

Yield: 5.0

Momentum: 2.5

Volatility: 4.0

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

157.09$

Current Price

157.09$

Potential

-0.00%

Expected Cash-Flows