Lam Research grows FQ3 revenue and profits from 2019

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Lam Research pledges $25 million to global coronavirus pandemic relief.
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Lam Research recently reported growing its revenue and net income in the fiscal third quarter compared to last year. Though the company encountered significant disruption due to COVID-19, the company’s labs and manufacturing facilities are once again operational.

While the firm declined to offer fourth-quarter guidance, its assessment of the post-coronavirus component sector landscape suggests good things about its future.

Strength in Diversity

In the period ending March 31, Lam generated $2.50 billion in revenue, up from $2.43 billion in FQ3 2019. The semiconductor manufacturing equipment company also improved its profits from $547.3 million to $574.7 million year-over-year. The firm also brought its quarterly earnings per share to $3.88, exceeding the $3.47 per share it recorded last year.

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Lam CEO Tim Archer revealed his corporation faced significant headwinds in the March quarter due to the coronavirus pandemic, including sourcing issues, production delays, and shipping stoppages.

Nevertheless, the company managed to beat its sales and net income intake on an annual basis because of its resiliency and diversity. Archer said Lam utilized remote support resources to help its clients install recently purchased equipment, mitigating COVID-19 travel restrictions. The CEO also highlighted the value of maintaining production capacity in South Korea and Taiwan to complement its U.S. facilities.

Lam’s positive third-quarter results underline a key takeaway of the pandemic’s impact on the semiconductor industry; operational adaptability and geographical variation in manufacturing are critical to 21st-century crisis management.

Robust Long-Term Outlook

The Fremont, California-based manufacturer declined to provide fiscal fourth-quarter guidance due to the ongoing impact of COVID-19. However, the firm’s chief executive expressed faith in the components industry’s ability to mount a recovery. Archer also provided some context about the component sector that informs the company’s near and long-term prospects.

The executive said his firm had not experienced a drop off in demand, but its ability to fulfill orders is compromised because of coronavirus related disruption. However, he also said the firm exited last quarter with record backlog that it would address throughout 2020.

In addition, Archer cited third-party estimates that cloud service providers experienced a tenfold usage increase because of widespread remote work transitions. To compensate, those firms have made large memory module purchases to increase their capacity. While the CEO expects the trend will be temporary, it will prompt chipmakers to future-proof their factories with upgraded equipment.

Given its ability to persevere through a global crisis, Lam will likely see long-term gains from the industry’s new normal.

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