Business Strategy and Outlook
| Abhinav Davuluri, CFA |Lam Research is a major vendor of semiconductor fabrication tools. The firm is the leader in dry etch, a critical step in the chipmaking process where material is selectively removed. We believe Lam has a wide economic moat as a result of cost advantages and intangible assets related to equipment design. Lam's leadership position creates scale advantages that fuel research and development spending at levels only Applied Materials and Tokyo Electron can match. At the end of 2021, Lam had an installed base of 75,000 units, up from 40,000 in 2015. This large installed base creates stickiness and offers Lam an intimate look into problems faced by chipmakers, providing valuable information it can use to implement solutions and additional capabilities in future tools.