Thematic Exposure -- 8.8/10

Lam Research dominates etch (~50% share) and deposition (~30% share) within the semi equipment oligopoly (Lam/AMAT/TEL/KLAC). Every major semiconductor scaling trend -- vertical NAND stacking, gate-all-around (GAA), 3D DRAM, advanced packaging -- increases etch and deposition intensity. SAM has expanded from the low-30s to mid-30s percent of WFE in CY2025, targeting the high-30s over the next several years. Ship share of WFE grew well over one percentage point in CY2025. Weight: 25%

Key Thematic Metrics

Etch Market Share

~50%

Global etch dominance

Deposition Market Share

~30%

Second major franchise

SAM as % of WFE

Mid-30s%

Up from low-30s, targeting high-30s

CY2026E WFE

~$135B

+23% YoY, clean room constrained

Installed Base

100K+

Chambers, crossed CY2025

WFE Ship Share Gain

>1pp

CY2025 share of WFE

1. Gate-All-Around (GAA)

~$1B Incremental SAM per 100K WSPM -- Aqara Wins Accelerating

Lam estimates approximately $1B of incremental SAM for every 100K wafer starts per month of GAA capacity. Customers are accelerating the GAA migration. The Aqara conductor etch tool doubled its installed base in CY2025 with production-tool-of-record wins for EUV and high-aspect-ratio etch in advanced DRAM and foundry logic. Management expects approximately 2x more applications using Aqara in next-generation GAA devices.

Incremental SAM

~$1B

Per 100K WSPM of GAA

Aqara Installed Base

Doubled in CY2025

Next-Gen GAA Apps

~2x More

Applications using Aqara

2. Advanced Packaging / HBM

SABRE 3D Leadership -- 6,000+ Installed Cells -- 40%+ Growth CY2026

Lam is the leader in electroplating (SABRE 3D platform with 6,000+ installed plating cells) and TSV etch for advanced packaging. The advanced packaging business is expected to grow 40%+ in CY2026, outperforming overall WFE growth. The transition from HBM3e to HBM4/4e with up to 16-layer stacking is a major tailwind, as each additional layer increases etch and deposition content per device.

SABRE 3D Installed Base

6,000+

Plating cells installed

CY2026 Adv Pkg Growth

40%+

Outpacing WFE growth

HBM Stacking

Up to 16L

HBM4/4e transition

3. NAND Upgrade Cycle

$40B+ Opportunity -- +90% YoY CY2025 -- AI Inference Use Case Emerging

The NAND upgrade opportunity exceeds $40B over several years and is tracking ahead of schedule. CY2025 upgrade revenue was a record, up 90%+ year-over-year. Two-thirds of industry NAND bits were still at sub-200 layers as of early CY2025, leaving a massive runway for upgrades. A new use case is emerging: non-volatile context memory for large-scale AI inference. Management estimates every 2-3 million accelerators sold adds approximately one percentage point to NAND bit demand growth.

Total Upgrade Opportunity

$40B+

Multi-year runway

CY2025 Upgrade Rev Growth

+90% YoY

Record upgrade revenue

Sub-200L NAND Bits

~67%

Of industry, as of early CY2025

AI Inference Driver

2-3M GPUs

= ~1pp NAND bit demand growth

4. ALD Moly (Halo Platform)

3x Metal Deposition SAM at GAA Nodes -- PTOR at Multiple NAND Customers

The Halo ALD Moly tool is the production tool of record at multiple NAND customers for 3+ consecutive nodes and is expanding into foundry and logic applications. The transition to molybdenum interconnects at advanced GAA nodes creates approximately a 3x increase in metal deposition SAM per wafer, representing a step-change expansion in addressable market for Lam in deposition.

Metal Dep SAM Expansion

~3x

Per wafer at GAA nodes

NAND PTOR Wins

3+ Nodes

Multiple customers

Expansion

Foundry/Logic

Beyond NAND into GAA

5. Backside Power Delivery

Upcoming SAM Expansion Driver -- More Etch and Deposition on Wafer Backside

Backside power delivery networks represent a major upcoming SAM expansion driver. This architecture moves power delivery to the back of the wafer, requiring additional metallization and interconnect steps -- translating directly into incremental etch and deposition content. While not yet contributing meaningful revenue, it is on the product roadmap and will benefit Lam disproportionately given its etch and deposition leadership.

6. China Exposure Normalizing

Declining from ~42-43% Peak Toward ~35% -- 50% Affiliate Rule ~$600M Impact

China as a percentage of total revenue has been declining from a peak of approximately 42-43% toward 35% and is expected to move lower in CY2026 as non-China WFE grows faster. The 50% affiliate rule restricts certain domestic Chinese customers, with an estimated ~$600M revenue impact in CY2026. The mix is normalizing, which reduces concentration risk but introduces a near-term revenue headwind.

System Revenue Mix by End Market

Segment	CY23Q4	CY24Q1	CY24Q3	CY24Q4	CY25Q1	CY25Q3	CY25Q4	YoY
Memory	48%	44%	35%	50%	43%	34%	34%	-16pp
Foundry	38%	44%	41%	35%	48%	60%	59%	+24pp
Logic/IDM	14%	12%	24%	15%	9%	6%	7%	-8pp

Memory Sub-Mix (DRAM vs. NVM)

Sub-Segment	CY23Q4	CY24Q1	CY24Q2	CY24Q3	CY24Q4	CY25Q1	CY25Q2	CY25Q3	CY25Q4	YoY
DRAM	31%	23%	19%	24%	26%	23%	14%	16%	23%	-3pp
NVM (NAND)	17%	21%	17%	11%	24%	20%	27%	18%	11%	-13pp

Score Rationale

8.8/10 — Lam Research sits at the intersection of every major semiconductor scaling trend. With ~50% etch share and ~30% deposition share, the company benefits from increasing process intensity at every successive technology node. Six overlapping growth vectors -- GAA ($1B incremental per 100K WSPM), advanced packaging/HBM (40%+ growth CY2026), NAND upgrades ($40B+ opportunity, +90% YoY), ALD Moly (3x metal dep SAM), backside power delivery, and China normalization -- collectively expand SAM from the low-30s to the high-30s percent of WFE. The score does not reach 9+ because: (1) China still represents ~35% of revenue with regulatory uncertainty, (2) the NAND upgrade cycle, while powerful, is inherently lumpy and cyclical, and (3) backside power delivery has not yet contributed meaningful revenue.

Data sourced from Daloopa and company filings (FY2026Q2, FY2026Q1, FY2025Q4, FY2025Q3 transcripts).