Lam Research Expands in India: A Strategic Hedge Against Trade Risks?

Lam Research Corporation LRCX is expanding its global footprint, and its new destination is India. In the third quarter of fiscal 2025, the company reported capital expenditures of $288 million, a $100 million sequential increase. LRCX stated that a major part of this increase in capital spending was for a land purchase in India for its planned lab expansions.

Lam Research already has a significant presence in India with an engineering center that focuses on software development and hardware engineering. However, the company announced earlier this year that it is set to build a manufacturing facility in India with an investment of more than $1.2 billion.

Over the last few years, Lam Research has executed its broader strategy to build a flexible supply chain and manufacturing network across the United States and Asia. This strategy enables LRCX to stay close to its consumers, allowing the company to optimize its global operations in response to tariffs and trade restrictions. A manufacturing facility in India will enable Lam Research to navigate smoothly during a highly uncertain and unstable geopolitical scenario.

LRCX’s global footprint of its factories expands across the United States, Austria, Malaysia, Taiwan, and Korea. Expansion in India will provide the required flexibility to adjust its production as and when needed.

As trade tensions rise and semiconductor supply chains face increased scrutiny, Lam Research’s India expansion could provide a strategic hedge against future disruptions. The investment also supports LRCX’s long-term research and development roadmap, enabling it to further expand its global manufacturing footprint.

Currently, India’s role in Lam Research’s operations is still evolving. The company’s ability to diversify production and service customers worldwide could strengthen its competitive position in an increasingly complex market environment.

India Attracts More Semiconductor Players

Lam Research is not the only semiconductor company that is expanding its presence in India. Applied Materials AMAT and Micron Technology MU have also announced their investment plan for the country.

Applied Materials is investing $400 million over four years in a new engineering center in India, with the potential to support more than $2 billion in planned investments. Applied Materials’ planned investment will create approximately 500 jobs.

Micron is setting up a semiconductor assembly and testing facility with a total investment of $825 million. Micron’s facility is nearing completion and is expected to become operational in the second half of 2025.

LRCX's Price Performance, Valuation & Estimates

Shares of Lam Research have gained 38.3% year to date compared with the Zacks Electronics – Semiconductors industry’s growth of 13.3%.

LRCX YTD Price Return Performance

From a valuation standpoint, its forward price-to-earnings ratio of 24.91 is significantly below the industry’s average of 33.07.

LRCX Forward 12-Month P/S Ratio

The Zacks Consensus Estimate for Lam Research’s fiscal 2026 earnings has been revised upward by a penny to $4 per share over the past seven days. The estimated earnings figure suggests a year-over-year decline of 0.2 %. 

 
Lam Research currently carries a Zacks Rank #3 (Hold). 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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