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Lam Research Corp LRCX

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Record Fiscal Q4 for Lam Research Thanks to Impressive Equipment Demand; Raising FVE to $640

Abhinav Davuluri, CFA Sector Strategist

Analyst Note

| Abhinav Davuluri, CFA |

Wide-moat Lam Research reported fiscal fourth-quarter results that came in ahead of our expectations, led by sales to NAND and foundry chipmakers. We appreciate that Lam has become more diversified in end-market exposure, whereas historically Lam’s equipment sales were more memory-centric. Based on large capital expenditure budgets at TSMC and Intel as well as improved memory spending, we now think the wafer fab equipment market will be up 30% in 2021 (up from 20%). After incorporating Lam’s guidance for the September quarter ($4.3 billion in revenue at the midpoint) and positive outlook for calendar 2021, we raise our fair value estimate to $640 per share from $600. Shares look modestly undervalued at current levels.

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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.

Contact
4650 Cushing Parkway
Fremont, CA, 94538
T +1 510 572-0200
Sector Technology
Industry Semiconductor Equipment & Materials
Most Recent Earnings Jun 30, 2021
Fiscal Year End Jun 30, 2021
Stock Type Cyclical
Employees 14,100

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