Lam Research Bets Big on ALD and Dry EUV: Will This Pay Off?

Core Insights - Lam Research Corporation (LRCX) is focusing on atomic layer deposition (ALD) and dry EUV (Extreme Ultraviolet) resist processing technologies as chips become smaller and more complex [1][9] - The company reported strong demand for its Striker SPARC ALD and ALTUS Halo systems in Q3 of fiscal 2025, particularly in NAND for AI and high-speed memory applications [1][9] - Lam Research is making progress in dry EUV technology, which is gaining traction among DRAM and foundry customers [2] Company Performance - LRCX is experiencing strong growth in foundry and NAND markets, driven by advanced tools [3][9] - The company is facing macroeconomic challenges, including customer spending slowdowns and global trade issues, which may impact its near-term prospects [3] - Despite challenges, Lam Research's margin improvements and strong product wins indicate that its strategies are effective [4] Competitive Landscape - Lam Research faces competition from Applied Materials (AMAT) and KLA Corporation (KLAC) in advanced chipmaking tools [5][9] - Applied Materials is a strong competitor in ALD with its Olympus and Endura platforms and is exploring dry resist solutions for EUV lithography [6] - KLA is increasingly involved in enabling EUV lithography, focusing on process control systems essential for defect identification [7] Market Valuation - LRCX shares have increased by 25.9% year-to-date, outperforming the Zacks Electronics – Semiconductors industry, which rose by 6% [8] - The company trades at a forward price-to-earnings ratio of 22.94, below the industry average of 31.33 [10] - The Zacks Consensus Estimate for fiscal 2025 indicates a year-over-year increase of 33.8%, while a slight decline of 0.5% is expected for fiscal 2026 [11]