The rating on Freemont, Calif.-based Lam Research Corp. reflects the company's narrow business focus and high customer and product concentration in the volatile semiconductor capital equipment industry. This is offset partially by Lam's leadership position in its main niche (etch tools), good liquidity, and low debt leverage. Lam is a global developer, manufacturer, and marketer of wafer etch, patterning, and cleaning tools used to manufacture memory, logic, and microelectromechanical systems. Lam has a leading share of the etch market, a niche segment in the semiconductor capital equipment market. Given its relatively narrow product focus, the company selectively competes against more diversified players such as Applied Materials Inc. and Tokyo Electron Ltd. On March 11, 2008, the company completed its cash
