Lam Research Corporation

Like most of its semiconductor peers, Lam has witnessed a strong correction after its earlier highs. The company’s quarterly results were reasonably good and it outperformed analyst expectations on all counts. It demonstrated its sustained strength in execution by surpassing the $5 billion revenue for the first time. They made significant strides in the quarter thanks to remarkable technological victories for many customers. It is ramping up output levels and has increased revenue by almost 10% compared to the previous quarter. Supply chain problems have started to get a little better. They are still dealing with specific inflationary pressures and output restrictions. Besides, the management is working with customers to uncover other efficiencies, such as yield improvement. Their Coronus product line serves as an illustration of the opportunities this presents. Customers use Lam’s Coronus double etch method to prevent process-related flaws, which can hinder cost-per-bit scalability. Because of this, they have noticed a consistent rise in the quantity of bevel edge passes used with each new NAND technology node. We give Lam a ‘Hold’ rating with a revised target price.