Will Dextro Cobot Accelerate LRCX's CSBG Growth With AI Precision?

Lam Research Corporation LRCX is redefining fab maintenance with its groundbreaking Dextro collaborative robot (cobot), an AI-powered assistant built to automate complex servicing tasks in semiconductor facilities. As part of the company’s Customer Support Business Group (“CSBG”), Dextro aims to bring precision, consistency and safety to traditionally manual and error-prone operations. LRCX expects that the cobot has the potential to unlock a new margin expansion area and provide a competitive advantage.

Dextro directly addresses one of the industry's most critical bottlenecks, like maintenance inefficiency. In semiconductor fabs, even minor errors can lead to yield loss or extended downtime. With more than twice the precision of human operators, Dextro performs delicate maintenance tasks with machine-guided accuracy, boosting tool uptime, reducing labor burden and minimizing costly rework.

This aligns directly with CSBG’s goal of providing high-margin, recurring service revenues, and reinforces customer loyalty through enhanced performance. In the third quarter of fiscal 2025, CBSG generated $1.68 billion in revenues, up 20% year over year. Lam Research expects CSBG to continue growing faster than its installed base by integrating Dextro and other intelligent service offerings, such as equipment analytics and predictive maintenance. The company is transitioning CSBG from a parts-and-service unit into a strategic, margin-rich platform.

As chipmakers increasingly prioritize uptime, automation and cost efficiency, Dextro positions Lam Research to lead the shift toward AI-driven fab support. More than just a robotic upgrade, it’s a catalyst for scaling service quality and deepening customer relationships, putting the company on a solid path to long-term margin expansion.

How Does LRCX Stack Up Against Rivals in the Fab Equipment Race?

As semiconductor demand surges, Lam Research faces intensifying competition from industry heavyweights like Applied Materials AMAT and KLA Corporation KLAC across critical chipmaking and fab support segments.

Applied Materials is a global leader in equipment for semiconductor, LCD and solar PV fabrication. Applied Materials offers a wide-ranging toolset, covering deposition, etch, inspection, CMP and packaging that spans all major wafer-fab processes.

KLA Corp specializes in wafer inspection, metrology and process-control systems, making it indispensable to semiconductor yield optimization. KLA Corp is well-positioned to benefit from AI-driven chip complexity, which increases demand for advanced defect detection and process precision.

LRCX’s Price Performance, Valuation & Estimates

Shares of Lam Research have gained 34.5% year to date compared with the Zacks Electronics – Semiconductors industry’s growth of 13.2%.

From a valuation standpoint, its forward price-to-earnings ratio of 24.39 is significantly below the industry’s average of 33.19, which implies the stock is undervalued relative to the industry.

The Zacks Consensus Estimate for Lam Research’s fiscal 2025 earnings has been revised upward by 2 cents 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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