Can Advanced Packaging Boost Systems Sales at Lam Research in FY26?

Lam Research Corporation LRCX sees advanced packaging as a major growth driver for its Systems segment sales in fiscal 2026. The company crossed $1 billion in advanced packaging-related revenues in the calendar year 2024, highlighting how quickly demand is rising in areas such as high-bandwidth memory (HBM) and advanced logic.As AI workloads and high-performance computing expand, the push toward more efficient and powerful chip designs is creating additional need for Lam Research’s etch and deposition systems. In fiscal 2025, the company’s Systems segment’s revenues soared 28.8% year over year to $11.49 billion.Packaging complexity is increasing as the industry transitions from 2.5D approaches to 3D system-on-integrated-chip architectures. HBM, in particular, is moving from 8-high to 12-high and even 16-high stacks, requiring more precise through-silicon vias and advanced interconnects. These steps depend heavily on Lam Research’s process technology, creating a huge opportunity for the company in the advanced packaging space.From a system sales perspective, the impact is significant. Each generation of advanced packaging involves both upgrades to existing equipment and purchases of new tools, creating recurring opportunities. With AI workloads accelerating and chipmakers investing in more advanced memory and logic nodes, Lam Research’s system sales tied to packaging are positioned to benefit.LRCX expects revenues from advanced packaging solutions to triple to more than $3 billion in 2025. This is likely to give a significant boost to LRCX’s Systems segment’s revenues in fiscal 2026. The Zacks Consensus Estimate for Systems’ fiscal 2026 revenues is pegged at $12.57 billion, calling for a year-over-year increase of 9.3%.Lam Research’s Competitors in Advanced PackagingTwo major competitors of Lam Research in the advanced packaging space are Applied Materials AMAT and KLA Corporation KLAC. Both companies bring different strengths that make them important players as HBM adoption expands.Applied Materials is a direct rival in deposition and etch technologies — areas critical for advanced packaging. The company has been investing in new materials and packaging solutions to address the rising complexity of HBM and 3D integration. Applied Materials’ broad product portfolio allows it to compete closely with Lam Research in supplying key process tools for chipmakers transitioning to more advanced packaging designs.Meanwhile, KLA Corporation competes through process control and inspection tools. As packaging density increases, ensuring yield and reliability becomes more difficult. KLA Corporation’s equipment is vital for identifying defects and improving manufacturing efficiency.LRCX’s Share Price Performance, Valuation and EstimatesShares of Lam Research have risen 45.4% year to date compared with the Zacks Electronics – Semiconductors industry’s gain of 26.9%.LRCX YTD Price Return PerformanceImage Source: Zacks Investment ResearchFrom a valuation standpoint, Lam Research trades at a forward price-to-earnings ratio of 23.38, significantly lower than the industry’s average of 35.98.LRCX Forward 12-Month P/S RatioImage Source: Zacks Investment ResearchThe Zacks Consensus Estimate for Lam Research’s fiscal 2026 and 2027 earnings implies a year-over-year increase of approximately 6.8% and 9.2%, respectively. Estimates for fiscal 2026 and 2027 earnings have been revised upward in the past 30 days.Image Source: Zacks Investment ResearchLam Research currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Quantum Computing Stocks Set To SoarArtificial intelligence has already reshaped the investment landscape, and its convergence with quantum computing could lead to the most significant wealth-building opportunities of our time.Today, you have a chance to position your portfolio at the forefront of this technological revolution. In our urgent special report, Beyond AI: The Quantum Leap in Computing Power, you'll discover the little-known stocks we believe will win the quantum computing race and deliver massive gains to early investors.Access the Report Free Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report KLA Corporation (KLAC): Free Stock Analysis Report Lam Research Corporation (LRCX): Free Stock Analysis Report Applied Materials, Inc. (AMAT): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks