Chip Equipment Makers Hone In
One company that I have been eyeing for a juicy trade alert is Lam Research Corporation (LRCX).
They make the equipment in which chip companies use to make chips.
It’s quite the meat and potatoes tech company, one that the ecosystem cannot get rid of, and one at the intersection of innovation and robust demand.
They are the global leader in semiconductor wafer fabrication equipment and serve a critical role in enabling the production of advanced integrated circuits, robust financial performance, and strategic positioning in high-growth markets like artificial intelligence (AI) and memory chips.
When the next meaningful dip happens, I will be executing bullish trades with the rest of the dip buyers.
Lam Research designs, manufactures, markets, refurbishes, and services semiconductor processing equipment essential for fabricating integrated circuits.
Lam’s equipment is vital for major chipmakers like TSMC, Samsung, Intel, and Micron, ensuring steady demand.
The company holds a leading market share in etch equipment and is the second-largest player in deposition, trailing only Applied Materials. These processes are foundational to semiconductor manufacturing, involving the precise layering and patterning of materials on wafers. With chip complexity increasing—driven by trends like AI, 5G, and Internet of Things (IoT)—Lam’s expertise in delivering high-precision, high-yield solutions positions it as a linchpin in the industry.
The semiconductor industry is experiencing robust growth, fueled by transformative technologies. AI, in particular, is a significant driver, as it requires advanced chips with high computational power. Lam Research benefits directly from this trend, as its equipment is used to manufacture the complex, high-performance chips powering AI applications.
The proliferation of 5G networks, autonomous vehicles, and IoT devices further amplifies demand for semiconductors, almost gifting money to LAM.
Lam Research’s operational improvements have enhanced its gross margins, bringing them closer to long-term targets. Investments during the NAND downturn have strengthened its competitive edge, particularly in etch and deposition technologies. The company’s Vantex etch system, for example, leverages RF technology and Equipment Intelligence solutions for superior wafer-to-wafer performance, catering to the precision demands of advanced nodes.
Lam Research is strategically positioned to capitalize on several industry trends. The shift to advanced nodes (e.g., 3nm and below) requires more complex manufacturing processes, increasing demand for Lam’s etch and deposition equipment. Additionally, the company’s exposure to memory markets, particularly NAND, aligns with growing storage needs for AI and cloud computing.
Investing in LRCX offers a unique opportunity to gain exposure to the semiconductor industry’s growth, driven by AI, 5G, and IoT.
Tech stocks have really shown their worth in 2025 after that massive pullback.
Many were casting aside tech as an industry of yesteryear, but the Nasdaq has come roaring back, and the industry has a positive setup for the rest of 2025.
The AI narrative will need to stay intact for the Nasdaq to perform well.
No doubt that we are in risky times, but tech has been the most resilient part of the American economy, and that won’t change anytime soon.
LAM is a core part of this strength in the tech industry, and they will continue to be leaders in chip equipment for years to come.
