- The Wafer Fabrication Equipment [WFE] market is growing from $57-59 billion in 2020 to $67-$70 billion in 2021 itself as opposed to earlier expectations of achieving this in CY2023/CY2024.
- By 2024, Lam Research is targeting to increase market share from 20% to 25%; i.e. revenue of $14-$17 billion and FCF of $4-$5 billion.
- Enterprise value of $78 billion and past FCF of $2.4 billion give an FCF yield of 3%, while the targeted FCF of $4-5 billion could yield 5% to 6.4%.
- Even the past decade's 6-7% industry growth puts it into double-digit total returns. Lam Research has grown at twice the rate of the industry in the past decade. With Cloud, AI, IoT and 5G coming together, future growth rates could be much higher for the industry and for Lam.
- This is a cyclical business with a secular growth tailwind. The FCF and revenues, and thus, share price will go through volatility.
For further details see:
Lam Research: AI, IoT, 5G, And Gaming Tailwinds