Key Highlights

  • Lam broke ground Aug. 26 on a 120,000-sq-ft Tualatin, Oregon lab, part of a more than $3 billion five-year global lab investment; it is due to open in 2028.
  • June-quarter Revenue rose 30% year on year to a record $6.72 billion, and Lam guided September-quarter revenue to $8.10 billion, plus or minus $400 million.
  • The board raised the quarterly Dividend 27% to $0.33, payable Oct. 14; China was 26% of June-quarter revenue.
  • For fiscal 2026, Lam reported revenue of $23.23 billion and GAAP diluted EPS of $5.76, with June-quarter GAAP gross Margin of 51.7%.

Lam Research (NASDAQ:LRCX) is putting more than $3 billion into its global network of research labs over the next five years, a bet that faster chip development will keep its etch and deposition tools at the center of AI-era semiconductor manufacturing. The company outlined the plan on August 26, when it broke ground on a new 120,000-square-foot lab at its Research and Development campus in Tualatin, Oregon.

According to Lam's release, the Oregon Facility is part of that planned Investment and will increase cleanroom lab space at the Tualatin campus by more than 50%. The lab will support advanced deposition and etch process development, materials science and hardware validation, and it will let customers work on-site with Lam engineers from early concept through deployment in their own fabs. Lam expects the lab to open in 2028.

The logic is simple. Chipmakers building processors and memory for AI need new materials, 3D structures and packaging methods faster than ever, and the equipment suppliers that can prove out those processes first tend to win the production orders that follow. By expanding a lab network that Lam says runs 24 hours a day across locations, the company aims to shorten the time between a customer's idea and high-volume manufacturing.

Inside the Oregon Groundbreaking

The Tualatin lab itself will cost about $620 million, and Lam plans to spend $1.5 billion on major R&D labs in Washington County over roughly the next decade and a half. The broader $3 billion-plus program covers labs across the U.S., Asia and Europe. The facility also qualifies for property tax breaks under a multi-year agreement with Washington County, with Lam expected to pay an estimated $111 million in taxes and fees over the life of the deal.

Lam's release estimated that construction will support about 900 jobs and $500 million in economic output over three years. Once complete, the lab is expected to add more than 400 new Lam jobs, lifting Lam-supported employment across Oregon to more than 11,000 and the company's annual economic contribution to the state to more than $1.8 billion. Lam currently employs about 3,000 people at the Tualatin campus.

"AI and the pace of innovation that it demands has changed everything," Chief Executive Tim Archer said at the event. Chief Operating Officer Sesha Varadarajan said in the company's release that the expansion reflects Lam's commitment to advancing Oregon's "Silicon Forest" in U.S. semiconductor innovation.

Record Results Fund the Build-Out

Lam is investing from a position of financial strength. In its July 29 Earnings release, the company reported revenue of $6.72 billion for the June 2026 quarter, up 15.1% from the March quarter and 30% from a year earlier. GAAP gross margin rose to 51.7%, GAAP Operating Margin reached 37.4% and GAAP Diluted Earnings per Share were $1.81. On a non-GAAP basis, EPS was $1.82. Archer said Lam delivered record revenue, operating margin and earnings per share as AI-driven Demand continues to reshape the industry.

For fiscal 2026, Lam reported revenue of $23.23 billion and GAAP diluted EPS of $5.76. Systems revenue, which covers new leading-edge equipment, was $4.25 billion in the June quarter, or 63% of the total. Customer support-related revenue, including services, spares and upgrades, contributed $2.47 billion.

The outlook points to further growth. For the quarter ending September 27, 2026, Lam guided to revenue of $8.10 billion, plus or minus $400 million, a gross margin of 52%, plus or minus one percentage point, and diluted EPS of $2.15, plus or minus $0.15.

Lam is also returning more cash to shareholders. On August 27, the day after the groundbreaking, the board approved a 27% increase in the quarterly dividend to $0.33 per share from $0.26. The dividend is payable on October 14 to holders of record on September 23.

Where Lam Fits in the AI Supply Chain

Lam is one of the largest makers of wafer fabrication equipment and is especially strong in etch and deposition, the steps used to carve and layer the ultra-thin structures inside advanced logic and memory chips. Demand for high-bandwidth memory, gate-all-around transistors and advanced packaging has boosted spending on these tools as AI data centers expand.

Its main rivals include Applied Materials (NASDAQ:AMAT), Tokyo Electron and KLA (NASDAQ:KLAC), all of which are also investing heavily in R&D capacity. Applied Materials, for example, is building its own large research center in Silicon Valley. In that setting, Lam's lab expansion is partly defensive, ensuring the company can keep pace with competitors to be designed into customers' next-generation production lines. Equipment makers that qualify a process step early with a chipmaker often keep that position for several technology generations, which is why R&D capacity and proximity to customers matter so much in this industry. Lam's customer support business, which services the large installed base of its tools, also benefits as more equipment is placed into production.

Risks to the Investment Case

The spending plan carries risks. Semiconductor equipment demand is cyclical, and a slowdown in AI-related Capital spending would pressure revenue just as Lam's lab costs rise. China accounted for 26% of revenue in the June quarter, leaving Lam exposed to changes in U.S. export controls and to Chinese spending cycles. Taiwan and Korea together made up 47% of revenue, underscoring the company's dependence on a small number of large chipmakers.

Construction timelines and cost estimates can also slip, and the Oregon lab is not expected to open until 2028, so the payoff from the investment is several years away. Rising operating expenses could also weigh on margins if revenue growth slows.

Lam's Next Milestone: The September-Quarter Report

The next test comes when Lam reports results for the September quarter, which it has typically done in late October. Investors will look at whether revenue reaches the $8.10 billion guidance midpoint, whether margins hold near 52% and what management says about 2027 equipment demand.

Updates on progress at the Tualatin site, further lab investments in Asia and Europe and any changes to U.S. export rules affecting China will also be closely followed.