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Lam Research Corp LRCX

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Lam Research Shows No Signs of Slowing Down with Record Fiscal Q3; Raising FVE to $600

Abhinav Davuluri, CFA Sector Strategist

Analyst Note

| Abhinav Davuluri, CFA |

Wide-moat Lam Research reported fiscal third-quarter results that came in ahead of our expectations. Sustained memory sales were bolstered by record foundry revenue. We appreciate the fact that Lam has become more diversified in end-market exposure. Based on recent capital expenditures raises from TSMC and Intel and improved memory spending, we think the wafer fab equipment market will be up 20% in 2021. After incorporating Lam’s guidance for the June quarter ($4 billion in revenue at the midpoint) and positive outlook for calendar 2021, we now think fiscal 2021 sales will grow over 45%. We are raising our fair value estimate to $600 per share from $505 as a result, and we view shares as fairly valued.

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Company Profile

Business Description

Lam Research manufactures equipment used to fabricate semiconductors. The firm is focused on the etch, deposition, and clean markets, which are key steps in the semiconductor manufacturing process, especially for 3D NAND flash storage, advanced DRAM, and leading-edge logic/foundry chipmakers. Lam's flagship Kiyo, Vector, and Sabre products are sold in all major geographies to key customers such as Samsung Electronics, Micron, and Taiwan Semiconductor Manufacturing.

4650 Cushing Parkway
Fremont, CA, 94538
T +1 510 572-0200
Sector Technology
Industry Semiconductor Equipment & Materials
Most Recent Earnings Mar 31, 2021
Fiscal Year End Jun 30, 2021
Stock Type Cyclical
Employees 13,100