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

Lam Research Corporation LRCX is putting a major focus on two key technologies — atomic layer deposition (ALD) and dry EUV (Extreme Ultraviolet) resist processing. These are becoming more important as chips get smaller and more complex.In the third quarter of fiscal 2025, Lam Research reported strong demand for its Striker SPARC ALD and ALTUS Halo systems. These tools help improve chip performance, especially in NAND used for artificial intelligence (AI) and high-speed memory.Lam Research is also making progress in dry EUV, a technology that supports better chip patterning. It’s gaining attention from both DRAM and foundry customers. These tools support big industry shifts like gate-all-around transistors and advanced chip packaging. Lam Research believes these areas will help it grow faster than the overall chip equipment market.LRCX is currently seeing strong growth in foundry and NAND, and it’s winning new business, thanks to its advanced tools. However, there are certain macroeconomic challenges, including customer spending slowdowns and global trade issues, which might hurt its prospects in the near term.Nonetheless, Lam Research’s margin improvements, strong product wins and focus on enabling long-term customer roadmaps suggest that the company’s strategies are on the right track. If LRCX maintains execution, its investments in ALD and dry EUV could become key drivers of sustainable competitive advantage and long-term growth.Rivals Challenge Lam Research in ALD and EUV Process ToolsLam Research faces strong competition in advanced chipmaking tools from Applied Materials AMAT and KLA Corporation KLAC.Applied Materials is a strong rival in ALD with its Olympus and Endura platforms. It’s also exploring dry resist solutions for EUV lithography through partnerships with key customers. Applied Materials' wide portfolio and strong customer base in foundry and logic give it a solid edge in competing for next-gen inflection spending.KLA, while best known for inspection and metrology tools, is increasingly involved in enabling EUV lithography. KLA’s process control systems are essential for identifying defects in complex EUV layers and ensuring the success of innovations like dry resist.While Lam Research is gaining traction with tools like Striker SPARC and ALTUS Halo, maintaining leadership will depend on sustained innovation and customer adoption against these strong players.LRCX’s Price Performance, Valuation and EstimatesShares of Lam Research have soared 25.9% year to date against the Zacks Electronics – Semiconductors industry’s rise of 6%.Image Source: Zacks Investment ResearchFrom a valuation standpoint, LRCX trades at a forward price-to-earnings ratio of 22.94, significantly below the industry’s average of 31.33.Image Source: Zacks Investment ResearchThe Zacks Consensus Estimate for Lam Research’s fiscal 2025 implies a year-over-year increase of 33.8% while a decline of 0.5% for fiscal 2026. The estimates for fiscal 2025 and fiscal 2026 have been revised upward in the past 30 days.Image Source: Zacks Investment ResearchLam Research currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>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