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LRCX Bets on TEOS 3D: Will it Strengthen Packaging Leadership?
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Key Takeaways
{\"0\":\"Lam Research\'s packaging-related revenue topped $1B in 2024, with AI fueling 3D architecture demand.\",\"1\":\"New TEOS 3D deposits thick dielectric films, offering faster throughput and lower ownership costs.\",\"2\":\"Combined with SABRE 3D, TEOS 3D strengthens LRCX\'s portfolio as chiplet adoption accelerates.\"}
Lam Research (LRCX - Free Report) is putting more focus on advanced packaging as demand for AI chips grows. In the fourth quarter of fiscal 2025, management noted that demand for AI chips is pushing the industry toward more complex 3D architectures. Buoyed by this demand, Lam Research’s advanced packaging-related revenues crossed $1 billion mark in the calendar year 2024.
The growth was supported by tools like SABRE 3D copper plating, which is expected to gain about five points of market share over the calendar year 2025. Moreover, the management believes that advanced packaging could generate more than $3 billion in 2025 revenues.
Building on this momentum, Lam Research recently introduced the VECTOR TEOS 3D deposition system. This new system addresses one of the hardest challenges in packaging, such as filling the gaps between stacked dies without defects. TEOS 3D can deposit thick, crack-free dielectric films up to 60 microns, and it can scale to more than 100 microns. It also uses Lam’s bowed wafer handling to process wafers under stress, reducing problems like delamination and cracks.
With its quad station module design, TEOS 3D enables parallel processing for nearly 70% faster throughput and 20% lower cost of ownership compared to earlier gapfill solutions. It also includes Lam Research’s Equipment Intelligence technology for process monitoring and reliability.
By combining SABRE 3D for copper plating and TEOS 3D for dielectric gapfill, Lam Research is expanding its packaging portfolio at a time when AI is driving faster adoption of chiplet designs. This positions the company to strengthen its leadership in advanced packaging as it benefits from the rising adoption of AI, which has become one of the fastest-growing areas of semiconductor manufacturing.
How Competitors Fare Against LRCX
Two major competitors of Lam Research in the advanced packaging space are Applied Materials (AMAT - Free Report) and KLA Corporation (KLAC - Free Report) .
Applied Materials is a direct rival in deposition and etch technologies, both areas which are 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 Estimates
Shares of Lam Research have risen 74.8% year to date compared with the Zacks Electronics – Semiconductors industry’s growth of 33.3%.
LRCX YTD Price Return Performance
Image Source: Zacks Investment Research
From a valuation standpoint, Lam Research trades at a forward price-to-earnings ratio of 27.06, significantly lower than the industry’s average of 37.07.
LRCX Forward 12-Month P/S Ratio
Image Source: Zacks Investment Research
The 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: Bigstock
LRCX Bets on TEOS 3D: Will it Strengthen Packaging Leadership?
Key Takeaways
Lam Research (LRCX - Free Report) is putting more focus on advanced packaging as demand for AI chips grows. In the fourth quarter of fiscal 2025, management noted that demand for AI chips is pushing the industry toward more complex 3D architectures. Buoyed by this demand, Lam Research’s advanced packaging-related revenues crossed $1 billion mark in the calendar year 2024.
The growth was supported by tools like SABRE 3D copper plating, which is expected to gain about five points of market share over the calendar year 2025. Moreover, the management believes that advanced packaging could generate more than $3 billion in 2025 revenues.
Building on this momentum, Lam Research recently introduced the VECTOR TEOS 3D deposition system. This new system addresses one of the hardest challenges in packaging, such as filling the gaps between stacked dies without defects. TEOS 3D can deposit thick, crack-free dielectric films up to 60 microns, and it can scale to more than 100 microns. It also uses Lam’s bowed wafer handling to process wafers under stress, reducing problems like delamination and cracks.
With its quad station module design, TEOS 3D enables parallel processing for nearly 70% faster throughput and 20% lower cost of ownership compared to earlier gapfill solutions. It also includes Lam Research’s Equipment Intelligence technology for process monitoring and reliability.
By combining SABRE 3D for copper plating and TEOS 3D for dielectric gapfill, Lam Research is expanding its packaging portfolio at a time when AI is driving faster adoption of chiplet designs. This positions the company to strengthen its leadership in advanced packaging as it benefits from the rising adoption of AI, which has become one of the fastest-growing areas of semiconductor manufacturing.
How Competitors Fare Against LRCX
Two major competitors of Lam Research in the advanced packaging space are Applied Materials (AMAT - Free Report) and KLA Corporation (KLAC - Free Report) .
Applied Materials is a direct rival in deposition and etch technologies, both areas which are 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 Estimates
Shares of Lam Research have risen 74.8% year to date compared with the Zacks Electronics – Semiconductors industry’s growth of 33.3%.
LRCX YTD Price Return Performance
Image Source: Zacks Investment Research
From a valuation standpoint, Lam Research trades at a forward price-to-earnings ratio of 27.06, significantly lower than the industry’s average of 37.07.
LRCX Forward 12-Month P/S Ratio
Image Source: Zacks Investment Research
The 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 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.