Lam Research Corp.

Overview Key strengths Key risks Leading market positions in the etch and deposition product segments of the semiconductor capital equipment industry. High industry volatility and customer concentration. Consistent free cash flow (FCF) generation through industry cycles. Above-industry exposure to the highly cyclical memory subsector of the semiconductor market. Strong balance sheet with net cash or near net cash position after shareholder returns. Supply chain obstacles have constrained margins and top-line growth. Lam?s revenue increased at a compound annual growth rate of approximately 19% between 2013 and 2021, exceeding WFE industry growth, as more complex process geometries increased the number of etch and deposition steps involved in semiconductor manufacturing, particularly in logic and memory devices. This expansion of Lam?s addressable market

...A leading market position in etch and deposition tools has enabled Lam Research Corp. to outgrow the wafer fabrication equipment (WFE) market, although supply constraints have weighed on results in recent quarters. Lam's revenue increased at a compound annual growth rate of approximately 19% between 2013 and 2021, exceeding WFE industry growth, as more complex process geometries increased the number of etch and deposition steps involved in semiconductor manufacturing, particularly in logic and memory devices. This expansion of Lam's addressable market has underpinned broad-based growth across all served markets, including NAND, DRAM, and foundry logic. Nevertheless, pervasive component shortages have limited Lam's ability to meet customer demand, and fiscal 2022 sales growth declined to 17.8% from over 45% in the prior year. Although Lam has been harder hit by these...

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