Lam Research CorporationLRCX

Morningstar Rating

Stock Research and Analysis

by Andy Ng

Lam Research has had great success in the etch segment of the semiconductor equipment market. Its efficient manufacturing model has allowed Lam to become one of the more profitable chip equipment firms. In June 2012, the firm acquired deposition tool Read more

Bulls Say

Lam is a leader in the etch and deposition markets and counts major chipmakers, such as Samsung and Toshiba, as customers.

Lam has an excellent operating model. The use of outsourcing has improved profitability and provides a variable cost structure for better responsiveness to industry downturns.

Demand is strong for new equipment technologies and materials--copper and low-k dielectrics--because they help chipmakers produce cheaper, faster, smaller chips.

Lam estimates that it has continued to gain share in the etch market, especially in Japan against major rival Tokyo Electron.

Lam recently acquired Novellus, a top supplier of deposition and strip tools. We think the move will bolster the competitive and technology positions of the combined firm. Read more

Bears Say

Lam faces major competition from Applied Materials and Tokyo Electron.

The firm operates in the deeply cyclical semiconductor equipment industry.

Lam has been unable to win any business from the world's largest chipmaker, Intel.

Lam does the bulk of its business with a small number of large chipmakers that can wield considerable influence. Read more

Management

Martin Anstice became the CEO of Lam Research in January 2012, taking over for Stephen Newberry, who remains with the firm as executive vice chairman. Anstice joined Lam in 2001, and has served as CFO and COO during his tenure. CFO Doug Bettinger joined Read more

Profile

Lam Research manufactures equipment used to fabricatesemiconductors. The firm is focused on the etch market, which is akey step in the semiconductor manufacturing process. Read more