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Lam Research Corp LRCX

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Morningstar’s Analysis

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Lam Research Enjoying Strong Equipment Spending Amid Record Q1 Results; Raising FVE to $400

Abhinav Davuluri, CFA Sector Strategist

Analyst Note

| Abhinav Davuluri, CFA |

Wide-moat Lam Research reported fiscal first-quarter results that came in ahead of our expectations. Sustained logic and foundry strength were bolstered by an improvement in NAND and DRAM revenue. Management anticipates growing equipment sales in memory entering 2021, as NAND customers pursue 96-layer 3D NAND and beyond and DRAM spending recovers following a stretch of limited capacity expansion. Based on Lam’s guidance for the December quarter ($3.3 billion in revenue at the midpoint) and positive outlook for calendar 2021, we think fiscal 2021 (ending in June 2021) sales will grow in the double-digits. We are raising our fair value estimate for Lam Research to $400 per share from $360 as we incorporate a stronger growth outlook.

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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 and Taiwan Semiconductor Manufacturing.

Contact
4650 Cushing Parkway
Fremont, CA, 94538
T +1 510 572-0200
Sector Technology
Industry Semiconductor Equipment & Materials
Most Recent Earnings Sep 30, 2020
Fiscal Year End Jun 30, 2021
Stock Type Cyclical
Employees 11,700

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