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Lam Research Corp - Stock Quote LRCX

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Morningstar's Lam Research Corp Stock Analysis

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March Quarter Supply Chain Woes Don’t Constrain Our Long-Term Optimism for Wide-Moat Lam Research

Abhinav Davuluri, CFA Sector Strategist

Analyst Note

| Abhinav Davuluri, CFA |

Wide-moat Lam Research reported fiscal third-quarter results that came in below our expectations and the midpoint of management's guidance due to delays in system components and broad supply chain hurdles. Nonetheless, management remained confident that equipment demand is still robust and anticipates calendar 2022 wafer fab equipment, or WFE, spending of around $100 billion, which is consistent with our estimates. Supporting this growth in WFE are large 2022 capital expenditure budgets from TSMC ($44 billion) and Intel ($27 billion). Although Lam has historically had greater exposure to memory end markets, we think it has improved its foundry and logic design wins in recent years sufficiently to achieve healthy growth in 2022 once it is able to overcome supply chain headwinds. Our $720 fair value estimate remains intact, and we think prospective investors should find current levels attractive, particularly amidst the recent sell-off in technology stocks.

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Lam Research Corp's 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, Intel, 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, 2022
Fiscal Year End Jun 30, 2021
Stock Type Cyclical
Employees 16,900

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