Lam Research (LRCX)

Etch & deposition equipment — critical for 3D NAND and advanced logic/HBM

AI exposure 33% — derived from reported segment revenue, not asserted.

Where it sits

Silicon Layer → Semiconductor Equipment · figures rebased to FQ4 FY2026, reported 2026-07-29

Etch + deposition systems (3D NAND, DRAM, advanced logic) — memory-heavy leads 2 businesses in this sub-tier that together are 100% of revenue, so Semiconductor Equipment is effectively the whole company rather than one leg of it.

Reported segments

• Systems revenue (etch & deposition) — 62.8% of revenue
• Customer Support & Services (CSBG) — 37.2% of revenue

Lam Research ($6.72B Q4 FY2026, +30% YoY, +15% sequential; Q1 FY2027 guided ~$8.1B). Systems 62.8% (~$4.2B — etch and deposition; the systems mix was memory 46% at a record, foundry 44%, logic and other 10%, with NAND and DRAM each 23%) = primary B1 Semiconductor Equipment; Customer Support 37.2% (a record near $2.5B — spares, service, upgrades, Reliant and Equipment Intelligence). Memory-weighted, so HBM and advanced DRAM capex is the swing factor.

How the 33% is built

• Systems revenue (etch & deposition) — 62.8% of revenue × 40% AI-driven (estimate). Memory was a record 46% of systems in the June quarter and HBM plus advanced DRAM drive it, but NAND and trailing-edge foundry are also in the mix
• Customer Support & Services (CSBG) — 37.2% of revenue × 20% AI-driven (disclosed). Service and spares follow the entire installed fleet, most of which is not leading edge

Investment read

Moat. Technology leadership in etch and deposition inside a three-player structure (with Applied Materials and TEL), where high-aspect-ratio etch — the step that makes 200+ layer NAND and HBM stacking possible — is Lam's strongest position. The compounding half is the installed base: 80,000+ chambers generating a Customer Support annuity that crossed $2B in a single quarter, growing with every tool shipped and largely indifferent to the order cycle.

Bottleneck / pricing power. Strong pricing power (few alternatives for leading-edge etch/dep) + recurring service revenue; a structural beneficiary of HBM/advanced-packaging.

Role in the AI stack. The etch/deposition tool layer — enables HBM, 3D NAND, advanced logic.

Connected companies

• Taiwan Semiconductor (TSM) — LRCX supplies: etch & deposition
• Micron Technology (MU) — LRCX supplies: memory etch tooling
• Intel (INTC) — LRCX supplies: etch + deposition tools for Intel Foundry
• Applied Materials (AMAT) — LRCX competes with: Deposition + etch overlap — AMAT leads deposition, LRCX leads etch
• Sandisk (SNDK) — LRCX supplies: etch/deposition equipment for 3D NAND fabrication
• SK Hynix (SKHY) — LRCX supplies: etch/deposition for SK Hynix HBM/NAND
• GlobalFoundries (GFS) — LRCX supplies: etch/deposition equipment for GlobalFoundries
• Ultra Clean Holdings (UCTT) — LRCX is supplied by: Critical UHP subsystems/modules built into Lam Research fab tools — LRCX is a top-2 customer (~part of 58.7% top-2 concentration)
• MP Materials (MP) — LRCX is supplied by: Rare-earth oxides underlie Lam etch chamber coatings, but MP does not commercially supply yttria and no MP->LRCX link is evidenced
• Lynas Rare Earths (LYC) — LRCX is supplied by: yttria chamber coatings and rare-earth compounds for etch chambers
• Alcoa (AA) — LRCX is supplied by: primary aluminum feedstock for machined vacuum-chamber bodies and structural parts
• Tower Semiconductor (TSEM) — LRCX supplies: Etch and deposition equipment for Tower's specialty and silicon-photonics process flows

Others in Semiconductor Equipment

• ASML Holding (ASML)
• Applied Materials (AMAT)
• KLA Corporation (KLAC)
• Teradyne (TER)
• Onto Innovation (ONTO)
• Ultra Clean Holdings (UCTT)

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