Can Lam Research's (LRCX) EUV Collaboration Redefine Its Edge in Advanced Chipmaking?

• Lam Research and JSR Corporation announced a cross-licensing and collaboration agreement to accelerate semiconductor manufacturing, focusing on developing dry resist technology for extreme ultraviolet (EUV) lithography and next-generation chip materials.
• This partnership aims to facilitate the industry's transition to advanced patterning, supporting the rapid growth of AI and high-performance computing applications by addressing the demands of modern chip architectures.
• We'll explore how Lam Research's expansion into advanced EUV and dry resist process technologies may influence its long-term market outlook.

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Lam Research Investment Narrative Recap

To invest in Lam Research, you need to believe in continued demand for next-generation semiconductor manufacturing equipment, as AI and high-performance computing drive investments in advanced chip architectures. The recent cross-licensing agreement with JSR Corporation supports Lam's focus on EUV and dry resist innovation, but does not significantly impact the company's customer concentration risk, which remains the most material short-term issue given Lam's reliance on a select group of major global chipmakers.

Among recent announcements, the launch of the VECTOR TEOS 3D deposition tool stands out for its direct alignment with industry catalysts, specifically, the shift to advanced packaging to support rising AI workloads. This product aims to solve tough manufacturing hurdles and may help reinforce Lam’s competitive position as fabrication complexity rises, but the concentration of customers still limits revenue visibility.

On the other hand, investors should be aware that any shift in capital spending from Lam’s largest customers could...

Read the full narrative on Lam Research (it's free!)

Lam Research's outlook anticipates $23.6 billion in revenue and $6.7 billion in earnings by 2028. This is based on projected annual revenue growth of 8.5% and a $1.3 billion increase in earnings from the current level of $5.4 billion.

Uncover how Lam Research's forecasts yield a $110.53 fair value, a 16% downside to its current price.

Exploring Other Perspectives

Nineteen members of the Simply Wall St Community set Lam’s fair value from US$56.57 to US$135, underscoring widely differing opinions. Your outlook may depend on the pace of AI-driven demand and how concentrated customer risk could affect Lam’s future earnings, take a look at these contrasting perspectives before making assumptions.

Explore 19 other fair value estimates on Lam Research - why the stock might be worth less than half the current price!

Build Your Own Lam Research Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Lam Research research is our analysis highlighting 3 key rewards that could impact your investment decision.
• Our free Lam Research research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Lam Research's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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