01—Abstract
Summary
Summary of the 10-K filed August 17, 2021. Cited figures are marked; the original filing is the authoritative source.
Lam Research Corporation (LRCX) reported a strong fiscal year 2021, with revenue increasing by 45.6% to $14.63 billiona, driven by robust demand for semiconductor equipment across various markets including high-performance computing, PCs, and 5G networks.
The company demonstrated significant operational execution, increasing production output while adhering to COVID-19 safety protocols, though it did experience higher freight and logistics costs. Net income saw a substantial increase of 73.6% to $3.91 billionb, leading to diluted earnings per share of $26.90. The company continues to invest heavily in research and development, focusing on innovations in deposition, etch, and clean technologies to address technological inflections like 3D device scaling and multiple patterning.
Lam Research's strong global presence and collaborative approach with ecosystem partners position it well to capitalize on the long-term secular growth trend in the semiconductor industry, driven by demand from cloud computing, IoT, and other advanced markets. The company also actively manages its capital through share repurchases and dividends, indicating a commitment to shareholder returns.
02—Key points
Key Highlights
- Revenue surged by 45.6% year-over-year to $14.63 billion, driven by strong demand in the semiconductor industry.
- Net income increased significantly by 73.6% to $3.91 billion, resulting in diluted EPS of $26.90.
- Gross margin improved slightly to 46.5% of revenue, despite increased freight and logistics costs, due to favorable customer and product mix.
- The company demonstrated strong operational performance, increasing production while managing COVID-19 safety protocols.
- Significant investment in R&D (10.2% of revenue) reflects a focus on innovation in deposition, etch, and clean technologies.
- International sales continue to dominate, with China, Korea, and Taiwan representing a substantial portion of revenue.
- Lam Research actively returned capital to shareholders through $2.7 billion in share repurchases and $727 million in dividends during fiscal year 2021.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2021, Lam Research Corp kept $0.27.
- Revenue$14.63B100.0%
- Cost of revenue−$7.82B53.5%
- Gross profit$6.81B46.5%
- Operating costs−$2.32B15.9%
- Operating income$4.48B30.6%
- Interest, other & tax−$573.6M3.9%
- Net income$3.91B26.7%
Where FY2021 revenue went
$14.63B- Cost of revenue: $7.82B, 53% of revenue
- Net income: $3.91B, 27% of revenue
- R&D: $1.49B, 10% of revenue
- SG&A: $829.9M, 5.7% of revenue
- Interest, other & tax: $573.6M, 3.9% of revenue
Kept 27% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2021filed August 17, 2021Financial Statements
FY2021 against FY2020
| Line item | FY2021FY2020 | Change |
|---|---|---|
| Revenue | $14.63B$10.04B | +45.6% |
| Cost of Revenue | $7.82B$5.44B | +43.9% |
| Gross Profit | $6.81B$4.61B | +47.7% |
| R&D Expenses | $1.49B$1.25B | +19.2% |
| SG&A Expenses | $829.88M$682.48M | +21.6% |
| Operating Expenses | $2.32B$1.93B | +20.1% |
| Operating Income | $4.48B$2.67B | +67.6% |
| Interest Expense | $208.60M$177.44M | +17.6% |
| Net Income | $3.91B$2.25B | +73.6% |
| EPS (Basic) | $2.72$1.55 | +75.0% |
| EPS (Diluted) | $2.69$1.51 | +78.1% |
| Shares Outstanding (Basic) | 1.44B1.45B | −0.8% |
| Shares Outstanding (Diluted) | 1.45B1.49B | −2.5% |
05—Questions
Frequently Asked Questions
What were the primary drivers of Lam Research's strong revenue growth in fiscal year 2021?
Lam Research experienced robust revenue growth primarily due to increased capital equipment spending by semiconductor manufacturers, fueled by strong secular demand for semiconductors in markets like high-performance computing, personal computers, and 5G networks. Higher revenue from the Customer Support Business Group for spares, services, and upgrades also contributed.
How did Lam Research manage its costs and margins amidst supply chain challenges and the pandemic?
While Lam Research successfully increased production output and maintained a favorable customer and product mix, leading to a slight improvement in gross margin to 46.5%, it did face higher costs related to freight, logistics, and new facility startup expenses. The company continued to operate under COVID-19 safety protocols.
What is Lam Research's strategic focus regarding research and development?
Lam Research continues to make substantial investments in R&D, allocating 10.2% of its revenue in fiscal year 2021. The focus is on developing leading-edge deposition, etch, and clean technologies to support significant industry inflections such as 3D device scaling, multiple patterning, and advanced packaging, aiming to enhance its strategic relevance with customers.
How diversified is Lam Research's customer base, and what are the key geographic markets?
Lam Research serves leading semiconductor memory, foundry, and integrated device manufacturers. Geographically, the Asia region continues to be the largest market, with China, Korea, and Taiwan representing a significant majority of its revenue. While a few key customers contribute a substantial portion of revenue, the company's broad customer base across major semiconductor manufacturers provides some diversification.
06—Continue