LRCX Leans on CSBG & Semiverse Solutions: Will it Drive Growth?

Lam Research Corporation LRCX is building a durable competitive edge through two powerful growth engines, the Customer Support Business Group (CSBG) and Semiverse Solutions. Together, these growth engines will allow the company to smooth revenue volatility and strengthen its leadership position in the fast-changing semiconductor landscape.

CSBG has emerged as a reliable growth engine, benefiting from strong demand for upgrades and repurposing of existing tools, particularly in NAND, DRAM and logic technologies. In the third quarter of fiscal 2025, CSBG revenues reached $1.68 billion, up 20% year over year. CSBG is expected to grow at 1.5x the rate of the wafer fab equipment (WFE) market growth. By delivering recurring, high-margin revenues through spares, upgrades and field services, CSBG adds a much-needed layer of stability to complement the company’s cyclical equipment sales.

Meanwhile, Lam Research’s Semiverse Solutions is carving out new ground in virtual process development. Tools like SEMulator3D are enabling semiconductor manufacturers to simulate complex chip fabrication processes, cutting development costs, speeding up product timelines and reducing environmental impact. The business is gaining clear traction, with multiple new licensing deals signed with major chipmakers, as well as strategic partnerships with academic and government institutions.

Together, CSBG and Semiverse form a well-balanced growth engine for Lam Research. CSBG offers a stable foundation of recurring revenues, while Semiverse drives innovation-led expansion through software and IP. This dual-engine strategy enhances long-term resilience, deeper customer engagement and leadership in the digital future of chipmaking.

LRCX Faces Pressure From Rising Competitors

As Lam Research strengthened its position in semiconductor manufacturing, two notable rivals, Applied Materials AMAT and Onto Innovation ONTO, have emerged with distinct competitive edges.

Applied Materials directly challenges Lam Research across critical wafer fabrication stages, leveraging a vast, vertically integrated portfolio. Its reach spans deposition, etch, CMP and inspection, backed by deep R&D investment and strategic partnerships with fabs like TSMC, Intel and Samsung. With a broad global footprint and exposure to high-growth markets, Applied Materials combines scale with innovation-driven resilience.

Onto Innovation focuses on metrology, inspection and advanced packaging. Onto Innovation offers advanced defect inspection, metrology, probe card testing and lithography, along with sophisticated yield-enhancing software. Its JetStep panel lithography system for advanced packaging is a niche edge in growing markets.

LRCX's Price Performance, Valuation & Estimates

Shares of Lam Research have gained 28.6% year to date compared with the Zacks Electronics – Semiconductors industry’s growth of 5.2%.

From a valuation standpoint, its forward price-to-earnings ratio of 23.26 is significantly below the industry’s average of 31.01.

The Zacks Consensus Estimate for Lam Research’s fiscal 2025 earnings has been revised upward by 7.2% over the past 60 days to $4 per share. The estimated earnings figure suggests year-over-year growth of 33.78%.

Lam Research currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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