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Will ALD and Etch Deal Wins Anchor LRCX's Systems Revenue Growth?
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Key Takeaways
LRCX Q3 systems revenues rose 27% YoY to $3.04B, driven by demand for advanced deposition and etch tools.
Striker SPARC and ALTUS Halo ALD tools secured key wins in 3D NAND and foundry spacer applications.
Akara etch system gained traction at DRAM customers, supporting future 3D DRAM and CFET roadmaps.
Lam Research Corporation (LRCX - Free Report) continues to ride strong momentum in its systems business, driven by customer demand for its advanced deposition and etch tools. In the third quarter of fiscal 2025, systems revenues reached $3.04 billion, rising 15.6% sequentially and 27% year over year. This segment contributed about 64% of total revenues, reinforcing its role as a key growth driver for the company.
The growth is fueled by Lam Research’s advanced products that address the needs of next-generation memory and logic technologies. Within deposition, Lam Research’s Striker SPARC atomic layer deposition (ALD) is delivering the industry’s densest conformal low-k carbide films and has secured multiple wins for spacer applications and with a leading-edge foundry.
The ALTUS Halo system supports barrierless atomic layer deposition of molybdenum, which reduces resistance in interconnect layers by 50% versus legacy technologies. This is critical for achieving the high I/O performance needed in 3D NAND for AI workloads. During the last reported quarter, Lam Research stated that Halo’s molybdenum process is seeing increased adoption across its leading 3D NAND customers, contributing to strong systems demand. This growing traction underscores Halo’s role in driving the company’s overall systems revenue growth.
Within the edge, its Akara system has been gaining traction, with multiple wins in critical etch at a major Dynamic random-access memory (DRAM) customer. Its ultrafast plasma control enables improved etch selectivity and precision, which supports Lam Research’s long-term DRAM roadmaps, positioning LRCX for future device architectures like 3D DRAM and CFET.
Lam Research projected fourth-quarter revenues to be approximately $5.0 billion (±$300 million). However, management remains cautious about macroeconomic factors that could influence customer spending trends. With strong adoption of Striker, Halo, and Akara, and rising demand for advanced NAND and DRAM nodes, Lam Research’s systems business appears well-positioned to support long-term growth.
How Competitors Fare Against Lam Research
Semiconductor heavyweights like Applied Materials (AMAT - Free Report) and ASML Holding (ASML - Free Report) are also seeing strong momentum as memory makers invest in next-generation technologies.
During second-quarter fiscal 2025 results, Applied Materials projected that revenues from its advanced DRAM customers would grow more than 40% in fiscal 2025. Applied Materials expects this demand to be driven by increased investments in DDR5 and high-bandwidth memory.
In the first quarter of 2025, ASML Holding stated that 42% of its net system sales came from memory. Moreover, ASML Holding highlighted strong customer demand for its products. The demand was driven by ASML’s DRAM and logic customers, which are ramping leading-edge nodes using ASML’s NXE:3800E EUV systems.
LRCX's Price Performance, Valuation & Estimates
Shares of Lam Research have gained 40.8% year to date compared with the Zacks Electronics – Semiconductors industry’s growth of 14.1%.
LRCX YTD Price Return Performance
Image Source: Zacks Investment Research
From a valuation standpoint, its forward price-to-earnings ratio of 25.34 is significantly below the industry’s average of 33.24.
LRCX Forward 12-Month P/E Ratio
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Lam Research’s fiscal 2026 earnings has been revised upward by 2 cents over the past 30 days to $4 per share. The estimated earnings figure for fiscal 2026 depicts a flat growth compared with fiscal 2025.
Image: Bigstock
Will ALD and Etch Deal Wins Anchor LRCX's Systems Revenue Growth?
Key Takeaways
Lam Research Corporation (LRCX - Free Report) continues to ride strong momentum in its systems business, driven by customer demand for its advanced deposition and etch tools. In the third quarter of fiscal 2025, systems revenues reached $3.04 billion, rising 15.6% sequentially and 27% year over year. This segment contributed about 64% of total revenues, reinforcing its role as a key growth driver for the company.
The growth is fueled by Lam Research’s advanced products that address the needs of next-generation memory and logic technologies. Within deposition, Lam Research’s Striker SPARC atomic layer deposition (ALD) is delivering the industry’s densest conformal low-k carbide films and has secured multiple wins for spacer applications and with a leading-edge foundry.
The ALTUS Halo system supports barrierless atomic layer deposition of molybdenum, which reduces resistance in interconnect layers by 50% versus legacy technologies. This is critical for achieving the high I/O performance needed in 3D NAND for AI workloads. During the last reported quarter, Lam Research stated that Halo’s molybdenum process is seeing increased adoption across its leading 3D NAND customers, contributing to strong systems demand. This growing traction underscores Halo’s role in driving the company’s overall systems revenue growth.
Within the edge, its Akara system has been gaining traction, with multiple wins in critical etch at a major Dynamic random-access memory (DRAM) customer. Its ultrafast plasma control enables improved etch selectivity and precision, which supports Lam Research’s long-term DRAM roadmaps, positioning LRCX for future device architectures like 3D DRAM and CFET.
Lam Research projected fourth-quarter revenues to be approximately $5.0 billion (±$300 million). However, management remains cautious about macroeconomic factors that could influence customer spending trends. With strong adoption of Striker, Halo, and Akara, and rising demand for advanced NAND and DRAM nodes, Lam Research’s systems business appears well-positioned to support long-term growth.
How Competitors Fare Against Lam Research
Semiconductor heavyweights like Applied Materials (AMAT - Free Report) and ASML Holding (ASML - Free Report) are also seeing strong momentum as memory makers invest in next-generation technologies.
During second-quarter fiscal 2025 results, Applied Materials projected that revenues from its advanced DRAM customers would grow more than 40% in fiscal 2025. Applied Materials expects this demand to be driven by increased investments in DDR5 and high-bandwidth memory.
In the first quarter of 2025, ASML Holding stated that 42% of its net system sales came from memory. Moreover, ASML Holding highlighted strong customer demand for its products. The demand was driven by ASML’s DRAM and logic customers, which are ramping leading-edge nodes using ASML’s NXE:3800E EUV systems.
LRCX's Price Performance, Valuation & Estimates
Shares of Lam Research have gained 40.8% year to date compared with the Zacks Electronics – Semiconductors industry’s growth of 14.1%.
LRCX YTD Price Return Performance
Image Source: Zacks Investment Research
From a valuation standpoint, its forward price-to-earnings ratio of 25.34 is significantly below the industry’s average of 33.24.
LRCX Forward 12-Month P/E Ratio
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Lam Research’s fiscal 2026 earnings has been revised upward by 2 cents over the past 30 days to $4 per share. The estimated earnings figure for fiscal 2026 depicts a flat growth compared with fiscal 2025.
Image Source: Zacks Investment Research
Lam Research currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.