⚡What does Lam Research do, in 30 seconds?
Lam Research sells the machines and services that chipmakers use to make chips 4. It sold $23.2bn ✓ in FY2026, and new machines made up 64% ✓ of that. The rest came from service, spare parts, upgrades and older-style machines 15.
📱What does Lam Research sell?
Lam has two business lines: new machines, and support for the machines it has already sold. Here is what each one is and who buys it.
New machines (systems)
New leading-edge machines for deposition, etch, clean and other chipmaking steps 1. In FY2026, this line brought in $14.9bn ✓. Machine families include ALTUS and VECTOR for deposition, Kiyo and Flex for etch, and Coronus for cleaning 3. Lam also sells tools that stack memory chips for high bandwidth memory (HBM) 4.
👥 Chipmakers that make flash memory, DRAM memory and logic chips, including foundries that build chips for others 4.
Customer support and other
Service, spare parts and upgrades, plus new and refurbished older machines sold under the Reliant name 15. In FY2026, this line brought in $8.3bn ✓. Many new features also come as upgrades for machines customers already own 5.
👥 Chip plants that already run Lam machines and want them to work faster with fewer defects 5.
How the mix has shifted
Where the customers are
Most of Lam's sales come from Asia, and China is the biggest single market at 34% ✓ in FY2026. Taiwan added 22% ✓ and South Korea 19% ✓. The United States added just 7% ✓. US export licence rules have limited how much Lam can sell in China 22.
💸How does Lam Research make money?
Follow the money from left to rightfrom top to bottom: what customers pay for, what it costs to make, and what is left as profit.
Lam sold $23.2bn ✓ of machines and services in FY2026. Building those machines and providing service cost $11.5bn ✓. What is left is gross profit, the money kept after paying for what was sold. That came to $11.7bn ✓.
Next come the costs of running the company. Research and development took $2.4bn ✓, and sales, marketing and admin took $1.1bn ✓. What remains is operating profit, the profit from the main business, which was $8.2bn ✓. After tax of $1.0bn ✓ and a little other income, net income was $7.3bn ✓. Put simply, out of every hundred dollars of sales, Lam kept about $31 ✓ as profit.
Out of every $100 customers paid in FY2026…
⏱️ Lam Research by the clock
Spread the FY2026 totals evenly over its 364 days and you get this. Source: LAM RESEARCH CORP 10-K [6].
📈How is Lam Research doing?
Lam is growing fast right now, but its sales have swung up and down over the years. Sales rose 26.0% ✓ in FY2026 to $23.2bn ✓. Lam says the main reason was that foundry customers spent more on equipment 1. It also says AI is pushing up spending on both memory and other chips 1.
Over the long run, the trend is strong. From FY2016 to FY2026, sales grew 14.7% ✓ a year on average. Sales rose in 8 ✓ of those 10 ✓ years. But the dips were sharp: sales fell 12.9% ✓ in FY2019 and fell 14.5% ✓ in FY2024. Lam also keeps more of each sale than it used to. Operating margin rose from 18.3% ✓ in FY2016 to 35.3% ✓ in FY2026.
The latest four quarters, to 27 September 2026, look even stronger. Sales reached $26.1bn ✓, up 33.4% ✓ on the four quarters before. Operating margin climbed to 37.0% ✓. In the September 2026 quarter alone, revenue was $8.22 billion, up 22% on the June quarter 27. Lam expects about $8.60 billion for the quarter ending in December 2026, give or take $400 million 27. That is a forecast, not a result.
📝 The report card
Lam earns an A ✓ for profit and an A ✓ for cash. It gets a B ✓ for growth and a B ✓ for its balance sheet. Steadiness is its weak spot, with an F ✓. Every company is graded on the same fixed scale, so an A means the same thing on every page. The strip shows where Lam Research (orange) and its 2 peers land; further right is better.
Growth
Lam's sales grew 10.1% ✓ a year over its last three fiscal years, which earns a B ✓ on the fixed scale. That is the fastest of the three companies here. KLA grew 9.0% ✓ a year, a C ✓. Applied Materials grew 3.2% ✓ a year over its own latest three fiscal years, a D ✓.
Why this measure? (higher is better)
Growing sales is the engine of a business. Mature giants rarely grow fast, so 5% a year already earns a C.
Profitability
Over the last three years combined, Lam kept 32.5% ✓ of sales as operating profit, which clears the bar for an A ✓. KLA kept even more, at 37.3% ✓, also an A ✓. Applied Materials came in at 29.0% ✓, a B ✓.
Why this measure? (higher is better)
Operating margin is the share of each sales dollar left after running the business. Software and platforms often clear 30%; hardware makers usually sit below 10%.
Cash generation
Over the last three years combined, Lam turned 25.7% ✓ of sales into free cash flow, an A ✓. KLA leads at 29.7% ✓, also an A ✓. Applied Materials is close to Lam at 25.3% ✓, an A ✓ as well.
Why this measure? (higher is better)
Free cash flow is the cash left after paying for factories, data centres and equipment. It funds dividends, buybacks and new bets.
Balance sheet
At the end of FY2026, Lam's cash and investments minus its borrowings (leases and stakes in other companies not counted) equalled 8.0% ✓ of a year's sales, a B ✓. That net cash was $1.9bn ✓. By 27 September 2026 it had grown to $3.7bn ✓, with $7.4bn ✓ of cash and investments against $3.7bn ✓ of debt. KLA owes more than it holds, at -17.3% ✓ of sales, a D ✓.
Why this measure? (higher is better)
More cash than debt gives a company room to ride out bad years. Some debt is normal; a lot of it makes a company fragile.
Steadiness
Lam's yearly growth swings a lot, with a standard deviation of 21.2% ✓, which earns an F ✓. Sales jumped 45.6% ✓ in FY2021 but fell 14.5% ✓ in FY2024. KLA is steadier at 10.6% ✓, a C ✓.
Why this measure? (lower is better)
Steady growers are easier to plan around. Big swings mean sales depend on product cycles, the economy or one-off events.
🧑🏫 How the grades work
- Same scale for everyone. Each measure has fixed cut-offs (shown under each strip). Clear the A line and you get an A, whatever your peers do.
- Three years together. Profitability and cash generation add up the last three fiscal years before dividing, so one unusual year counts for less than it would on its own (a year much bigger than the others still weighs most).
- Peers for context. The rank shows how Lam Research compares with the group. Companies within 0.1 percentage point share a rank.
- Same source. Every company's figures come from its own latest annual report (10-K), so fiscal years end in different months.
- Judgement, openly stated. The cut-offs are QuantVantage.ai's view of what good looks like for a large, established company. They are not a forecast or a recommendation.
11 years at a glance
Where the cash goes
From FY2016 to FY2026, Lam handed back about as much cash as it made. It spent $35.4bn ✓ on buybacks and dividends, against $35.3bn ✓ of free cash flow. In FY2026 alone, payouts equalled 105% ✓ of free cash flow. Lam has paid a dividend every quarter since April 2014 26.
🧮Ratios 101: what are Lam Research's key financial ratios?
Ratios shrink Lam's big numbers into easy comparisons with Applied Materials and KLA, the two peers on this page. A ratio divides one number by another so companies of any size can be compared. Each card shows the formula with Lam Research's real FY2026 numbers, the peer median and the trend.
💰 Profitability: how much of each sale is kept?
Gross margin
What is left from each sale after paying to make the product or deliver the service.
👉 At 50.5% ✓, up from 44.5% ✓ in FY2016, Lam trails the 55.0% ✓ peer median. KLA pulls the median up with 61.3% ✓.
📏 Rule of thumb: Above 40% usually signals pricing power or a big software or services mix.
Operating margin
What is left after also paying for research, marketing and running the company.
👉 Lam's 35.3% ✓ is just above the 34.8% ✓ peer median and nearly double the 18.3% ✓ of FY2016.
📏 Rule of thumb: Above 20% is strong for a large company.
Net margin
The bottom line: profit after interest and taxes, per dollar of sales.
👉 Lam kept 31.3% ✓ of sales as final profit in FY2026, about twice the 15.5% ✓ of FY2016 and a bit above the 30.1% ✓ peer median.
📏 Rule of thumb: Above 15% is strong; one-off tax items can move it in a single year.
Return on equity (ROE)
Profit earned for each dollar that shareholders have left in the company.
👉 ROE of 58.3% ✓ is close to the 55.2% ✓ peer median and far above the 15.5% ✓ of FY2016. Buybacks, $3.9bn ✓ in FY2026 alone, keep shareholders' equity small at $12.5bn ✓, which lifts this ratio.
📏 Rule of thumb: Around 15% or more is good, but buybacks shrink equity and can make ROE look huge.
⚙️ Efficiency: how hard do the assets work?
Return on assets (ROA)
Profit earned from everything the company owns, however it was paid for.
👉 ROA of 30.9% ✓ beats the 23.1% ✓ peer median and is about four times the 7.5% ✓ of FY2016.
📏 Rule of thumb: Above 10% is strong; banks and factories usually earn less.
Asset turnover
Dollars of sales squeezed out of each dollar of assets.
👉 Lam's sales were 1.0x ✓ the value of everything it owns, above the 0.8x ✓ peer median and double the 0.5x ✓ of FY2016.
📏 Rule of thumb: Retailers often top 2x; asset-heavy businesses can sit below 0.5x.
Inventory days
How many days of products sit in warehouses before they are sold.
👉 Lam holds 136 ✓ days of stock, more than the 109 ✓ days of FY2016 but fewer than the 201 ✓ peer median.
📏 Rule of thumb: Fewer days means less cash tied up and less risk of products going stale.
🛟 Safety: could it survive a bad year?
Current ratio
Can short-term assets (cash, money owed by customers, stock) pay the bills due within a year?
👉 Lam's 2.6x ✓ means short-term assets easily cover bills due within a year. It sits near the 2.7x ✓ peer median, down from 3.8x ✓ in FY2016.
📏 Rule of thumb: Above 1.0x is the classic comfort line, but cash-rich giants can run below it on purpose.
Debt to equity
How much the company has borrowed for each dollar shareholders have in it.
👉 Lam's 0.3x ✓ is down from 0.7x ✓ in FY2016 and below the 0.6x ✓ peer median. It had $3.7bn ✓ of debt against $12.5bn ✓ of equity.
📏 Rule of thumb: Below 1.0x is conservative. Like ROE, it can rise when buybacks shrink equity, even if debt has not changed.
Interest cover
How many times over operating profit could pay the year's interest bill.
👉 Operating profit covered interest costs 52.3x ✓ in FY2026, up from 8.0x ✓ in FY2016 and about twice the 25.0x ✓ peer median.
📏 Rule of thumb: Above 5x is comfortable; below 2x is a warning sign.
💵 Cash and owners: where does the money end up?
Cash conversion
Does reported profit turn into real cash? Free cash flow is operating cash minus capital spending.
👉 Lam turned profit into free cash at 0.7x ✓ in FY2026, a little below the 0.8x ✓ peer median and well below the 1.3x ✓ of FY2016. Free cash flow was $4.9bn ✓ against net income of $7.3bn ✓.
📏 Rule of thumb: Near or above 1.0x means profits are backed by cash.
R&D intensity
How much of each sales dollar goes into inventing future products.
👉 Lam spends 10.2% ✓ of sales on R&D, below the 11.9% ✓ peer median and the 15.5% ✓ of FY2016. The dollars still grew, from $0.9bn ✓ in FY2016 to $2.4bn ✓ in FY2026.
📏 Rule of thumb: Tech companies often spend 10% to 20%; more is not always better if it does not pay off.
Stock pay
Pay given to staff in shares instead of cash. It is a real cost to owners because it adds shares.
👉 Stock pay was 1.7% ✓ of sales, below the 2.3% ✓ peer median and the 2.4% ✓ of FY2016.
📏 Rule of thumb: Under 5% of sales is modest for a tech company.
Shareholder payout
How much of the year's profit was handed back to owners.
👉 Lam returned 70.5% ✓ of FY2026 profit through dividends and buybacks, below the 79.5% ✓ peer median but up from 38.2% ✓ in FY2016.
📏 Rule of thumb: Above 100% means it returned more than it earned, using cash savings or debt.
Ratios use fiscal-year-end balance sheet values. Inputs are shown rounded, so dividing them can differ from the result in the last digit. A peer median leaves out peers that do not report the inputs, or where the ratio means nothing (for example, negative shareholders' equity). Rules of thumb are general guides from QuantVantage.ai, not hard limits. No share-price ratios (like price-to-earnings) are shown on this page.
🥊Who are Lam Research's competitors?
Lam's closest rival is Applied Materials, which Lam names as its main competitor in deposition and one of its main ones in etch 10. KLA sells to the same chip plants, but mostly makes tools that inspect and measure wafers 111213.
| Company | Where they compete | Revenue | Growth/yr (3y) | Op. margin | FCF margin |
|---|---|---|---|---|---|
| Lam Research (LRCX, FY2026) | Deposition, etch and clean machines, plus service, spares and upgrades 1 15 | $23.2bn | 10.1% | 35.3% | 21.1% |
| Applied Materials (AMAT, FY2025) | Deposition and etch machines sold to the same chipmakers 10 | $28.4bn | 3.2% | 29.2% | 20.1% |
| KLA (KLAC, FY2026) | Tools that inspect and measure wafers in the same chip plants 111213 | $13.6bn | 9.0% | 40.4% | 27.7% |
Many of Lam's other rivals are based outside the US. Lam names ASM International, Wonik IPS, Hitachi, Tokyo Electron, Screen Holding and Semes as competitors in deposition, etch or wet clean 10. It also competes with outside firms that sell spare parts for its machines 10.
🧭Lam Research SWOT: strengths, weaknesses, opportunities and threats
💪 Strengths
- Once a chipmaker approves a Lam machine for a production step, it usually keeps it while the machine performs 10.
- Lam's biggest customers include Micron, Samsung, SK hynix and TSMC 14.
- Over the last three years combined, Lam turned 25.7% ✓ of sales into free cash flow, an A ✓ on our report card.
- In FY2026, its support line brought in $8.3bn ✓ from service, spares and upgrades for machines already installed 15.
🩹 Weaknesses
- Sales swing a lot from year to year, so steadiness earns an F ✓.
- In FY2026, four customers made up about 16%, 15%, 12% and 12% of Lam's revenue 20.
- Some parts can only be bought from a single supplier, and Lam outsources some manufacturing and logistics 21.
- Lam spends 10.2% ✓ of sales on R&D, below the 11.9% ✓ peer median.
🚀 Opportunities
- Chipmakers are turning to 3D designs, new materials and advanced packaging, which Lam says raises demand for its machines 4.
- Lam says AI is driving more spending on both memory and other chips 1.
- Lam sells tools for stacking high bandwidth memory 4.
- New features are often sold as upgrades for machines customers already own 5.
⚠️ Threats
- China made up about 34% of revenue in FY2026, and US export licence rules have limited Lam's market there 22.
- Lam says US export controls give an edge to foreign rivals that are not bound by them 10.
- Applied Materials warns of more competition from Chinese equipment makers backed by local government funding 2324.
- Third-party spare parts suppliers compete for business on Lam's installed machines 10.
🏰Does Lam Research have a moat?
Why 3?
Lam's customer list includes Micron, Samsung, SK hynix and TSMC 14. Its milestones run from its first product, the AutoEtch, in 1981 to its first production-ready atomic layer etch system in 2014 15. But chipmakers judge suppliers on results, defects, support and total cost, which leaves less room for the name alone 10.
Why 4?
Once a chipmaker picks and approves a supplier's machine for a step, it generally keeps that choice for that chip generation, as long as the machine works as promised 10. Approving a new machine takes a big investment, so a rival that is already in place can be hard to dislodge 10. Lam then sells upgrades and services to that fleet 5. But outside spare parts suppliers compete for that business 10.
Why 2?
Lam says it learns from its large installed base of machines, alongside its own research and close work with customers 4. That is a learning loop, not a network where each new user makes the product better for others.
A moat is what keeps rivals from taking a company's customers and profits. Scores are QuantVantage.ai's judgement (5 = strongest), set with the same rubric on every explainer (orange is Lam Research; grey dots are peers).
🔭What should you watch next?
December 2026 quarter results
Lam expects revenue of about $8.60 billion, give or take $400 million, and a gross margin near 52.5% 27. Figures on this page run to FY2026 and the four quarters to 27 September 2026.
AI-driven spending on chip plants
Lam says spending on chipmaking equipment kept growing in 2026, with AI driving it 1. Lam's sales have swung a lot in past years, and its steadiness grade is an F ✓.
Foundry and memory customers
Four customers made up about 16%, 15%, 12% and 12% of revenue in FY2026 20. A change in plans at any one of them could move Lam's results.
📚Learn the words
❓Frequently asked questions about Lam Research
What does Lam Research do?
Lam Research sells the machines and services that chipmakers use to make chips 4. Its main machines handle deposition, etch and cleaning 1. Those chips end up in phones, PCs, servers, cars and data storage 4.
Does Lam Research make chips?
No, Lam does not sell chips. It sells equipment and services to memory makers, foundries and other chipmakers 4.
How does Lam Research make money?
Lam makes most of its money selling new machines, and the rest from supporting machines it already sold. In FY2026, new machines brought in $14.9bn ✓ and customer support and other $8.3bn ✓.
Who are Lam Research's biggest customers?
Lam's biggest customers include Micron, Samsung, SK hynix and TSMC 14. In FY2026, four customers made up about 16%, 15%, 12% and 12% of revenue 20.
Who are Lam Research's competitors?
Applied Materials is Lam's main rival in deposition and one of its main rivals in etch 10. Lam also names Tokyo Electron, ASM International, Hitachi, Screen Holding, Semes and Wonik IPS 10. KLA sells to the same chip plants but mostly makes inspection tools 111213.
Is Lam Research's revenue growing?
Yes, Lam's revenue is growing fast. Sales rose 26.0% ✓ in FY2026 and 33.4% ✓ in the four quarters to September 2026. Over ten years, growth averaged 14.7% ✓ a year.
How much of Lam's sales come from China?
China is Lam's biggest market, at 34% ✓ of sales in FY2026. US export licence rules have limited how much Lam can sell there 22.
🎮Play: higher or lower, then test yourself
Figures come from each company's latest annual report (10-K); fiscal years end in different months. Sources: [6] [8] [7].
🧠 Test yourself
5 quick questions. Score: 0 / 5
1. What does Lam Research mainly sell?
2. Which country bought the biggest share of Lam's sales in FY2026?
3. Atomic layer deposition adds material to a wafer how fast?
4. Who founded Lam Research?
5. Which is Lam's weakest mark on our report card?
🔎Sources and method
Every figure comes from a source listed here or is calculated from those sources (marked ✓). Company financials are taken from SEC filings (10-K and 10-Q) as tagged in XBRL. Peer grades rank the same measures across the company and its peers. This page contains no share-price data and no valuation.
- Lam Research 10-K for fiscal 2026 (filed 2026-08-07) — Item 7 MD&A: executive summary and revenue by systems and customer support (accessed 2026-10-29)
- Lam Research (LRCX) Form 10-K for fiscal year 2026, filed 2026-08-07 — revenue by product, segment and geography (accessed 2026-10-28)
- Lam Research 10-K for fiscal 2026 (filed 2026-08-07) — Item 1 Business: products table and deposition, etch, clean and dry resist product families (accessed 2026-10-29)
- Lam Research 10-K for fiscal 2026 (filed 2026-08-07) — Item 1 Business: overview, headquarters, customers served, advanced packaging, industry trends (accessed 2026-10-29)
- Lam Research 10-K for fiscal 2026 (filed 2026-08-07) — Item 1 Business: Customer Support Business Group (services, spares, upgrades, Reliant) (accessed 2026-10-29)
- SEC EDGAR companyfacts: Lam Research (LRCX) — annual 10-K facts (accessed 2026-10-28)
- SEC EDGAR companyfacts: KLA CORP (KLAC) — annual 10-K facts (accessed 2026-10-28)
- SEC EDGAR companyfacts: APPLIED MATERIALS INC /DE (AMAT) — annual 10-K facts (accessed 2026-10-28)
- SEC EDGAR companyfacts: Lam Research (LRCX) — balance sheet at 2026-09-27 (accessed 2026-10-28)
- Lam Research 10-K for fiscal 2026 (filed 2026-08-07) — Item 1 Business: Competition (named rivals, equipment qualification, export-control effects) (accessed 2026-10-29)
- KLA Corporation Form 10-K for fiscal year ended June 30, 2026 (filed 2026-08-06) — Item 1 Business: company, segments, history, industry, R&D, manufacturing, sustainability goals (accessed 2026-10-29)
- KLA Corporation Form 10-K for fiscal year ended June 30, 2026 (filed 2026-08-06) — Item 1 Business: customers, sales and service, international revenue share (accessed 2026-10-29)
- Lam Research Corporation Form 10-K for fiscal year ended June 28, 2026 (filed 2026-08-07) — Item 1 Business: what Lam sells, its main customers, competition and equipment qualification (accessed 2026-10-29)
- Lam Research 10-K for fiscal 2026 (filed 2026-08-07) — Item 1 Business: Customers (most significant customers FY2024-FY2026) (accessed 2026-10-29)
- Lam Research company history (lamresearch.com) — Founding, first product, listing year and etch milestones (accessed 2026-10-29)
- Lam Research 10-K for fiscal 2026 (filed 2026-08-07) — Item 1 Business: Marketing, Sales, and Service (service network by region) (accessed 2026-10-29)
- Lam Research 10-K for fiscal 2026 (filed 2026-08-07) — Item 1 Business: Human Capital (employee count and location, as of 2026-08-04) (accessed 2026-10-29)
- Lam Research 8-K on completion of the Novellus merger (filed 2012-06-04) — Novellus Systems merger completed 2012-06-04 (accessed 2026-10-29)
- Lam Research 10-K for fiscal 2026 (filed 2026-08-07) — Item 1 Business: Patents and Licenses (accessed 2026-10-29)
- Lam Research 10-K for fiscal 2026 (filed 2026-08-07) — Note 19: major customers (share of revenue by customer, FY2026) (accessed 2026-10-29)
- Lam Research 10-K for fiscal 2026 (filed 2026-08-07) — Item 1 Business: Manufacturing (outsourcing, single-source components) (accessed 2026-10-29)
- Lam Research 10-K for fiscal 2026 (filed 2026-08-07) — Item 1A Risk Factors: non-US sales share and China revenue share, export licences (accessed 2026-10-29)
- Applied Materials Form 10-K, fiscal year ended October 26, 2025 (Item 1, Marketing and Sales; Competition) — Direct sales force, largest customers' revenue shares, competitive factors and China competition (accessed 2026-10-29)
- Applied Materials Form 10-K, fiscal year ended October 26, 2025 (Item 7 MD&A) — Semiconductor Systems customer markets, AGS service agreements, display in Corporate and Other, China export rules (accessed 2026-10-29)
- SEC EDGAR companyfacts: Lam Research (LRCX) — quarterly 10-Q/10-K facts (accessed 2026-10-28)
- Lam Research 10-K for fiscal 2026 (filed 2026-08-07) — Item 5: dividends since April 2014 and May 2024 repurchase authorization (accessed 2026-10-29)
- Lam Research results for the quarter ended 2026-09-27 (8-K Exhibit 99.1, 2026-10-21) — September 2026 quarter results, dividend declared, outlook for December 2026 quarter (accessed 2026-10-29)
- Lam Research 10-K for fiscal 2026 (filed 2026-08-07) — Item 1 Business: Executive Officers (CEO and COO tenure) (accessed 2026-10-29)
- Lam Research 10-K for fiscal 2026 (filed 2026-08-07) — Note 2: fiscal year (52/53-week year ending last Sunday of June) (accessed 2026-10-29)
- Lam Research 8-K, Item 5.02 (filed 2026-08-27) — Two directors retiring from the board effective 2026-11-02 (accessed 2026-10-29)
- Lam Research 2026 proxy statement (DEF 14A, filed 2026-09-24) — 2026 annual meeting date and format (accessed 2026-10-29)