> ## Content Index > Fetch the complete content index at: https://www.sotkn.com/llms.txt > Use this file to discover other available public pages before exploring further. # What Does Lam Research Do? The Etch-and-Deposition Model - URL: https://www.sotkn.com/stack/semiconductors/what-does-lam-research-do/ - Published: 2026-10-20T04:40:17.000Z - Updated: 2026-10-20T04:40:17.000Z - Description: Lam Research sells etch and deposition chambers: it gets paid when a system is recognised, while the wafer still waits on an ASML slot. - Author: Sean - Tags: #layer-semiconductors Lam Research sells the etch and deposition chambers that carve and build the film after the scanner prints the pattern: it gets paid when a system is recognised, while the wafer still waits on an ASML slot. `SEMICONDUCTORS` · `Data as at 29 Jul 2026` · `Next update: after Lam Q1 FY2027 results (company calendar, 21 Oct 2026)` **Affects:** Semiconductors · Taiwan · Korea · US It is the etch-and-deposition company on the [semiconductors](https://www.sotkn.com/stack/semiconductors/) layer: the machines that carve deep holes and lay down films once [EUV](https://www.sotkn.com/explained/euv-lithography-explained/) has printed the pattern. Memory is the heavier mix this quarter. The foundry that still buys most of the leading-edge boxes around it is [TSMC](https://www.sotkn.com/stack/semiconductors/cowos/what-does-tsmc-do/). See [who makes wafer fab equipment](https://www.sotkn.com/explained/who-makes-wafer-fab-equipment/) and [memory process tools](https://www.sotkn.com/explained/memory-process-tools-hbm-explained/). **In short:** Lam sells etch, deposition and clean tools, then services the fleet. The June 2026 quarter printed $6.722bn of revenue — $4.250bn systems, $2.472bn customer support-related. Memory was 46% of systems mix (DRAM 23%, NAND 23%). Chambers ship if the cleanroom can take them. The layer’s stuck step is still the scanner slot. *Education only, not advice to buy or sell any security. Figures are from company filings and company releases dated as shown. Outlook is labelled outlook.* ## Numbers that matter | Print | Figure | Date | What it tells us | | ------------------------------- | ------------------ | --------------------------- | ---------------------------------- | | Total revenue | $6.722bn | June 2026 qtr · 29 Jul 2026 | Printed | | Systems | $4.250bn | Same 8-K | Who gets paid on the chamber | | Customer support-related (CSBG) | $2.472bn | Same 8-K | Service, spares, upgrades, Reliant | | Foundry | 44% of systems mix | Company slides, 29 Jul 2026 | Mix | | Memory (DRAM 23% + NAND 23%) | 46% of systems mix | Same slides | Mix, the heavier seat | | Logic / other | 10% of systems mix | Same slides | Mix | | GAAP gross margin / net income | 51.7% / $2.277bn | Same 8-K | Printed | | China (geo) | 26% of total | Same 8-K | Mix, not EUV | | Taiwan / Korea | 27% / 20% of total | Same 8-K | Where the invoice lands | | Sep 2026 qtr revenue guide | $8.10bn ± $400m | Outlook, 29 Jul 2026 | Not a print | Sources: [Lam Research results for the quarter ended 28 Jun 2026, Form 8-K exhibit 99.1](https://www.sec.gov/Archives/edgar/data/707549/000070754926000033/lrcx%5Fexhibitx991xq4x2026.htm?ref=sotkn.com), 29 Jul 2026; [June quarter 2026 financial results slides](https://filecache.investorroom.com/mr5ir%5Flamresearch2/1500/Q4%5F2026%5Fslides%5Ffull%5Ffinal.pdf?ref=sotkn.com), 29 Jul 2026\. Status chips are Second Order’s read. Systems mix percentages are the slides’; the 8-K does not print foundry/DRAM/NAND dollars. September figures are guidance. The print for that guide is due 21 Oct 2026. **Our arithmetic.** Systems were **63.2%** of the quarter (4,249.848 ÷ 6,722.238 = 0.632). CSBG **36.8%** (2,472.390 ÷ 6,722.238 = 0.368). Total was up **30.0%** year over year (6,722.238 ÷ 5,171.393 = 1.300) and **15.1%** sequentially, matching the 8-K. Mix applied to 8-K systems: about **$1.87bn** foundry (0.44 × 4,249.848), **$0.98bn** DRAM (0.23 × 4,249.848), **$0.98bn** NAND, **$0.43bn** logic/other. Memory **$1.95bn** (0.46 × 4,249.848). The slides’ mix footnote is broader than the 8-K systems line — it includes equipment-upgrade and Reliant sales — so treat those dollars as a read of mix, not a second income statement. Net margin **33.9%** (2,277.282 ÷ 6,722.238). China 26% of total is about **$1.75bn** (0.26 × 6,722.238); Taiwan 27% about **$1.82bn**; Korea 20% about **$1.34bn**. ## What does Lam Research actually do? Three steps, in order. Carve. Ship. Service. 1. **It carves the hole, then builds the film.** Lithography prints the pattern. Lam’s tools do the deep work around it: conductor and dielectric etch, deposition and clean. The 10-K is the catalogue — Kiyo and Akara for conductor etch, Vantex for high-aspect-ratio dielectric holes, VECTOR/ALTUS/SABRE for films, Syndion for TSV. [ASML](https://www.sotkn.com/stack/semiconductors/what-does-asml-do/) prints. [Applied](https://www.sotkn.com/stack/semiconductors/what-does-applied-materials-do/), Lam and Tokyo Electron build and carve. KLA checks. Memory tools: [memory process tools](https://www.sotkn.com/explained/memory-process-tools-hbm-explained/). This page is the carve specialist. 2. **It ships a counted invoice, not a counted scanner plan.** There is no “65 Low-NA” equivalent. June systems were $4,250 million versus $3,438 million a year earlier (4,249.848 ÷ 3,437.625 = **+23.6%**, our arithmetic). Company slides put NAND revenue as having **doubled sequentially**. DRAM held 23% of systems mix. Foundry was 44%. Do not read $4.250 billion as a shipped accelerator. 3. **It services the installed fleet.** Customer support-related revenue is parts, engineers, upgrades and the Reliant non-leading-edge line. The 8-K printed $2,472 million, up 17.1% sequentially (2,472.390 ÷ 2,110.906 = 1.171) and 42.6% year over year (2,472.390 ÷ 1,733.768 = 1.426). Company slides put the conductor-etch installed base at **more than 40,000 chambers**. That invoice does not wait for a new tool to ship. | Step | What it means | Where the risk sits | | ------- | -------------------------------------------- | -------------------------------------------------------- | | Carve | Etch, deposition, clean; HAR holes, GAA, TSV | Which layer the foundry or memory maker can actually run | | Ship | Systems recognised | Cleanroom space, export licences, Lam’s own output | | Service | CSBG — spares, upgrades, Reliant | Whether the installed fleet stays busy | Lam also sells TSV etch and electroplating into advanced packaging; the slides say that line is **on track for more than 70% year-over-year growth**. That is outlook, and a neighbour clock on [hybrid bonding](https://www.sotkn.com/explained/hybrid-bonding-explained/) and [CoWoS](https://www.sotkn.com/explained/cowos-explained/). It is not the June $4.250 billion. ## How does Lam Research make money? It gets paid when a system is recognised, and again when the installed fleet is serviced. Three things decide which cash prints, and when: - **Recognition** — a tool in deferred revenue is not the quarter’s sales until Lam’s accounting says it is. Deferred revenue was **$2.434 billion** at 28 June 2026, up from $2.221 billion at 29 March 2026\. Shipments to Japan sit outside that balance until customer acceptance; estimated future revenue from those shipments was **$490.2 million** at 28 June 2026. - **Mix** — foundry versus DRAM versus NAND versus logic; new systems versus CSBG. - **The installed base** — idle chambers still need parts; busy chambers buy upgrades, Equipment Intelligence software, and the Dextro automation the slides are rolling from NAND into DRAM. On 29 July 2026 the 8-K printed **$6,722 million** of revenue: **$4,250 million** systems, **$2,472 million** customer support-related. GAAP gross margin 51.7%, operating margin 37.4%, net income $2,277 million, diluted EPS $1.81\. Cash, cash equivalents and restricted cash **$5.598 billion**. Operating cash flow $1,457 million minus capex $189 million = **$1.268 billion** left after tools (ours). Full-year FY2026 revenue was **$23.233 billion**, against $18.436 billion (23,232.690 ÷ 18,435.591 = **+26.0%**). **Who gets paid.** Lam, on the recognised chamber and on CSBG. **Who pays.** TSMC, Samsung, Intel Foundry, SK hynix, Micron — the same wafer buyers as on the [Applied](https://www.sotkn.com/stack/semiconductors/what-does-applied-materials-do/) page. **Money sticks** at the recognised tool and the service contract, not at a foundry capex headline. See the [Taiwan capex-split Pulse](https://www.sotkn.com/markets/taiwan/taiwan-tsmc-capex-split-september-2026/). Guidance for the quarter ended 27 September 2026 was **$8.10 billion ± $400 million**, non-GAAP gross margin 52.0% ± 1%, non-GAAP operating margin 39.5% ± 1%, non-GAAP diluted EPS $2.15 ± $0.15\. Midpoint versus June is +20.5% (8,100 ÷ 6,722 = 1.205). That is outlook. The print is the 21 October call. ## What limits it? Scanner slots first. Cleanroom conversion second. China mix third. Neighbour clocks fourth. 1. **A shipped etch chamber does not print a leading-edge die by itself.** Every advanced logic wafer and most new DRAM still need an [ASML](https://www.sotkn.com/stack/semiconductors/what-does-asml-do/) scanner. On 14 October 2026 ASML said planned supply for 2027 and 2028 will not fully meet demand. See the [Wire](https://www.sotkn.com/wire/asml-2027-2028-supply-short-of-chip-demand-wire/). Lam can raise a systems invoice while the wafer still waits on a Low-NA slot. Do not read $4.250 billion as a shipped accelerator. 2. **The hole still has to convert.** NAND doubling sequentially is a conversion print — 256-layer and above, on the slides — not a new-fab print. DRAM mix at 23% can stay “strong” on the slides while [HBM](https://www.sotkn.com/explained/hbm-explained/) cubes wait on [SK hynix](https://www.sotkn.com/stack/semiconductors/hbm/what-does-sk-hynix-do/) allocation and [Micron](https://www.sotkn.com/stack/semiconductors/hbm/what-does-micron-do/) cleanroom timing. See the [US Micron Idaho Pulse](https://www.sotkn.com/markets/us/us-micron-10k-idaho-october-2026/). A Vantex or Akara box in a bay is not a tested stack. 3. **China is a mix, not an EUV escape.** The 8-K geo table puts China at **26%** of total revenue, Taiwan 27%, Korea 20%, Japan 9%, United States 9%. Lam’s China print is process tools. It is not a scanner substitute, and it moves with licences. 4. **A processed wafer still needs a stack and a slot.** [HBM](https://www.sotkn.com/explained/hbm-explained/) and [CoWoS](https://www.sotkn.com/explained/cowos-explained/) sit after the chamber. Packaging tools on the slides — TSV etch, electroplating, panel-level shipments — are Lam’s seat on that neighbour. They do not move the scanner bind. Calendar-2026 WFE in the **low $150 billion** range is the company’s outlook, not this 8-K. The honest uncertainty is conversion. An $8.10 billion September guide can still miss if installs slip, licences stall, or the NAND conversion the slides flagged does not hold in the 21 October print. ## Who else does this? Roles, not a league table. | Company | What it does | What makes it different | | -------------------------------------------------- | ------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------- | | **Lam Research** | Etch and deposition, including deep 3D-memory etch; CSBG on the fleet | $4.250bn systems this quarter; memory mix 46%; CSBG 36.8% of sales; no EUV scanner | | **Applied Materials** | Widest process catalogue: deposition, etch, implant, CMP, epi, packaging, eBeam | Broader catalogue; Q3 FY2026 systems $7.040bn. See [What Does Applied Materials Do?](https://www.sotkn.com/stack/semiconductors/what-does-applied-materials-do/) | | **ASML** | Production EUV scanners, DUV, Installed Base Management | Only qualified EUV seller. See [What Does ASML Do?](https://www.sotkn.com/stack/semiconductors/what-does-asml-do/) | | **Tokyo Electron** | Coater/developers beside the scanner, plus etch, deposition, clean | Sits next to every scanner track | | **KLA** | Inspection and measurement | Checks the work; does not carve the hole | | **TSMC, Samsung, Intel Foundry, SK hynix, Micron** | Buy and run the tools; sell wafers, HBM, packages | Get paid when layers yield. TSMC still owns CoWoS. See [What Does TSMC Do?](https://www.sotkn.com/stack/semiconductors/cowos/what-does-tsmc-do/) | What separates them is who can ship a qualified EUV box — that is ASML — versus who gets paid on the hundreds of other steps. Lam sits on the carve seat. Applied sits on the widest chamber seat. They overlap on etch and deposition; they do not overlap on implant, CMP breadth, or EUV. ## What would change this view? The read on the model weakens if: - The 21 Oct 2026 print comes in well below the $8.10 billion ± $400 million guide - Memory mix rolling over, or NAND’s sequential doubling failing to show as dollars in the next 8-K - China geo jumping as a share of the invoice, or export licensing cutting the 26% - Conductor-etch installs stalling while the slides still cite more than 40,000 chambers as if they were busy - ASML 2027–2028 supply remaining short while Lam’s systems invoice is sold as if wafers were unconstrained - CoWoS or HBM remaining so tight that processed wafers queue anyway — the neighbour clock stealing the bind It stays intact while systems stay \~63% of the invoice, CSBG keeps a good third of the quarter, memory mix holds in the mid-40s, China stays a process-tool mix rather than an EUV story, and the scanner slot remains the layer’s stuck step. ## Practical takeaways - Lam’s model on this layer is Carve → Ship → Service: chambers around the scanner, a recognised systems invoice, then CSBG - June 2026 quarter: $6.722bn sales, $4.250bn systems (63.2%), $2.472bn CSBG (36.8%), 51.7% GAAP gross margin, $2.277bn net income - Mix (slides): foundry 44% / DRAM 23% / NAND 23% / logic 10% of systems. Our arithmetic on 8-K systems: \~$1.87bn / $0.98bn / $0.98bn / $0.43bn - China 26% of total revenue (\~$1.75bn); Taiwan 27%; Korea 20% - Stuck step on the layer: ASML scanner slots for 2027–2028\. Lam’s own clock: NAND/DRAM conversion and the $8.10bn ± $400m September guide, due 21 Oct 2026 - A processed wafer still waits on [HBM](https://www.sotkn.com/stack/semiconductors/hbm/) and [CoWoS](https://www.sotkn.com/stack/semiconductors/cowos/) ## FAQ **What does Lam Research do?** Lam Research designs, builds and services wafer-process tools — primarily etch, deposition and clean, including the deep high-aspect-ratio etch used in 3D memory — and then charges again to keep those chambers running. It does not sell production EUV scanners. Systems revenue in the June 2026 quarter was $4.250 billion. **What does Lam Research do in simple terms?** It makes the machines a chip factory uses to carve deep holes and lay down films on a wafer after the pattern is printed, then charges again to service those machines. **Is Lam Research profitable?** Yes on the dated print. The June 2026 quarter’s net income was $2.277 billion on $6.722 billion of revenue, a 33.9% net margin, with a 51.7% GAAP gross margin (Form 8-K exhibit 99.1, 29 Jul 2026). That is not a forecast. **How is Lam Research different from Applied Materials?** Both sell process tools around the scanner. Applied has the wider catalogue — implant, CMP, epitaxy, packaging and eBeam on top of deposition and etch. Lam is narrower: etch and deposition, with a heavier memory mix this quarter (46% of systems) and a larger service share (CSBG 36.8% of sales). Neither sells production EUV. See [What Does Applied Materials Do?](https://www.sotkn.com/stack/semiconductors/what-does-applied-materials-do/). **What share of Lam’s sales is memory?** On the 29 July 2026 slides, memory — DRAM 23% plus NAND 23% — was 46% of systems mix, not 46% of total revenue. That is about $1.95 billion on our arithmetic (0.46 × $4.250 billion). CSBG is not split the same way in the 8-K. **Should I buy Lam Research shares?** We do not make buy or sell calls, and nothing here is a recommendation. What we can tell you is what the company does, how it gets paid, and which figures would change the picture. The decision is yours. ## Keep reading on the map - **The layer:** [Semiconductors](https://www.sotkn.com/stack/semiconductors/) - **The mechanism:** [Who makes wafer fab equipment](https://www.sotkn.com/explained/who-makes-wafer-fab-equipment/) · [Memory process tools](https://www.sotkn.com/explained/memory-process-tools-hbm-explained/) - **The scanner:** [EUV, explained](https://www.sotkn.com/explained/euv-lithography-explained/) · [What Does ASML Do?](https://www.sotkn.com/stack/semiconductors/what-does-asml-do/) - **The foundry:** [Foundry and advanced packaging](https://www.sotkn.com/explained/foundry-advanced-packaging-explained/) · [What Does TSMC Do?](https://www.sotkn.com/stack/semiconductors/cowos/what-does-tsmc-do/) - **The neighbours:** [CoWoS](https://www.sotkn.com/explained/cowos-explained/) · [HBM](https://www.sotkn.com/explained/hbm-explained/) · [SK hynix](https://www.sotkn.com/stack/semiconductors/hbm/what-does-sk-hynix-do/) · [Micron](https://www.sotkn.com/stack/semiconductors/hbm/what-does-micron-do/) · [Applied Materials](https://www.sotkn.com/stack/semiconductors/what-does-applied-materials-do/) - **The Wire:** [ASML 2027–2028 supply short](https://www.sotkn.com/wire/asml-2027-2028-supply-short-of-chip-demand-wire/) - **Where it happens:** [Taiwan](https://www.sotkn.com/markets/taiwan/) · [TSMC capex split](https://www.sotkn.com/markets/taiwan/taiwan-tsmc-capex-split-september-2026/) · [Korea HBM](https://www.sotkn.com/markets/korea/korea-hbm-memory-september-2026/) · [Micron Idaho](https://www.sotkn.com/markets/us/us-micron-10k-idaho-october-2026/) The members cut on the long clock is already live: [Where does the stuck step move?](https://www.sotkn.com/analysis/where-does-the-stuck-step-move/). This page stays the free Stack read of the Lam model. ## How we check this Figures come from company filings and company releases, each dated below. Segment mix percentages are the 29 July slides’; dollar splits from those percentages applied to the 8-K systems line are our arithmetic, and the slides’ mix footnote is broader than the 8-K systems definition. NAND “doubled sequentially” is the slides. China 26% is the geo table. September $8.10 billion ± $400 million, CY26 WFE in the low $150 billion range and advanced-packaging “more than 70%” year-over-year are outlook. Conductor-etch installed base “>40,000 chambers” is the slides. Where we work something out ourselves, the arithmetic is shown in full. **Last reviewed:** 20 Oct 2026 · **Next review:** after Lam Q1 FY2027 results (company calendar, 21 Oct 2026) print revenue against the $8.10 billion ± $400 million guide Spot an error? Tell us; we will correct it here. [Editorial standards →](https://www.sotkn.com/editorial-standards/) ## Sources 1. Lam Research, [results for the quarter ended 28 Jun 2026](https://www.sec.gov/Archives/edgar/data/707549/000070754926000033/lrcx%5Fexhibitx991xq4x2026.htm?ref=sotkn.com) (Form 8-K exhibit 99.1), 29 Jul 2026 — $6,722m revenue; systems $4,250m; CSBG $2,472m; GM 51.7%; net income $2,277m; China 26%; Taiwan 27%; Korea 20%; deferred revenue $2.43bn; Japan shipments $490.2m; Sep guide $8.10bn ± $400m 2. Lam Research, [Form 8-K](https://www.sec.gov/Archives/edgar/data/707549/000070754926000033/lrcx-20260729.htm?ref=sotkn.com), 29 Jul 2026 3. Lam Research, [IR copy of the same release](https://investor.lamresearch.com/2026-07-29-Lam-Research-Corporation-Reports-Financial-Results-for-the-Quarter-Ended-June-28,-2026?ref=sotkn.com), 29 Jul 2026 4. Lam Research, [June quarter 2026 slides](https://filecache.investorroom.com/mr5ir%5Flamresearch2/1500/Q4%5F2026%5Fslides%5Ffull%5Ffinal.pdf?ref=sotkn.com), 29 Jul 2026 — systems mix foundry 44% / DRAM 23% / NAND 23% / logic 10%; NAND doubled sequentially; CSBG $2.47bn; conductor etch >40,000 chambers; CY26 WFE low $150bn (outlook); advanced packaging >70% YoY (outlook) 5. Lam Research, [Form 10-K for the fiscal year ended 28 Jun 2026](https://www.sec.gov/Archives/edgar/data/707549/000070754926000037/lrcx-20260628.htm?ref=sotkn.com) — etch, deposition and clean catalogue; CSBG definition 6. Lam Research, [September 2026 earnings conference call listing](https://investor.lamresearch.com/events?ref=sotkn.com) — 21 Oct 2026, 2:00pm PDT 7. ASML, via [Wire: 2027–2028 supply short](https://www.sotkn.com/wire/asml-2027-2028-supply-short-of-chip-demand-wire/), 14 Oct 2026 All external links `rel="nofollow noopener"`.