Lam Research: The Etch King

Lam Research Corporation designs, manufactures, markets, refurbishes, and services semiconductor processing equipment used in the fabrication of integrated circuits. The company offers ALTUS systems to deposit conformal films for tungsten metallization applications; SABRE electrochemical deposition products for copper interconnect transition that offers copper damascene manufacturing; SOLA ultraviolet thermal processing products for film treatments; and VECTOR plasma-enhanced CVD ALD products. It also provides SPEED gapfill high-density plasma chemical vapor deposition products; and Striker single-wafer atomic layer deposition products for dielectric film solutions. In addition, the company offers Flex for dielectric etch applications; Kiyo for conductor etch applications; Syndion for through-silicon via etch applications; and Versys metal products for metal etch processes. Further, it provides Coronus bevel clean products to enhance die yield; Da Vinci, DV-Prime, EOS, and SP series products to address various wafer cleaning applications; and Metryx mass metrology systems for high precision in-line mass measurement in semiconductor wafer manufacturing. The company sells its products and services to semiconductors industry in the United States, China, Europe, Japan, Korea, Southeast Asia, Taiwan, and internationally. Lam Research Corporation was incorporated in 1980 and is headquartered in Fremont, California.

Executive Summary

Lam Research (LRCX) dominates two specific steps in chipmaking: Etch (removing material) and Deposition (adding material). The thesis is "Vertical Scaling." Since we can't make chips much smaller (physics limits), we are building them taller (3D NAND, HBM). Building tall structures requires drilling incredibly deep, precise holes. That is Lam's monopoly.

1. 3D NAND & HBM

Cryo Etch: To drill a hole through 300 layers of memory without the hole collapsing requires extreme engineering (Cryogenic Etching). Lam owns this technology.
Memory Exposure: Lam is more exposed to the Memory market (Samsung/Micron) than logic. The AI Memory supercycle benefits Lam disproportionately.

Risks to the Thesis

Memory Winter: If memory prices crash, Lam crashes harder than AMAT.
China: A huge percentage of Lam's installed base is in China.

Conclusion

Lam Research is the "Pick and Shovel" play for the 3D architecture of modern chips.

Lam Research: The Etch King

Executive Summary

1. 3D NAND & HBM

Risks to the Thesis

Conclusion

LRCX Valuation Model

Lam Research Corporation (LRCX)

The Semiconductor Primer

LRCX