Lam Research Dominates Etch and Deposition and Merits a Wide Moat

Lam Research is a major vendor of semiconductor fabrication tools. Specifically, it is the market share leader in dry etch, a critical step in the chipmaking process where material is selectively removed. We believe Lam has a wide economic moat as a result of cost advantages and intangible assets related to equipment design. Lam's leadership position creates scale advantages that fuel research and development spending at levels only wide-moat Applied Materials can match. Lam’s large installed base creates stickiness and offers Lam an intimate look into problems faced by chipmakers, providing valuable information it can use to implement solutions and additional capabilities in future tools.