Lam Research executives told investors at Citi’s 2026 Global TMT Conference that stronger AI‑driven data‑center spending is lifting the outlook for the wafer‑fab equipment (WFE) market. The company now expects the global WFE market to reach the low $150 billion range in calendar 2026, up from earlier estimates of $135 billion and a later view of $140 billion.
Chief financial officer Doug Bettinger highlighted that Lam’s gross margin was 52 % in the most recent quarter – the highest in two decades – and the company has guided the same 52 % for the current period. Management sees a path to the mid‑50s percent range as the product mix shifts toward higher‑margin offerings.
Lam’s share of the serviceable addressable market (SAM) has risen from the low‑30 % range to above 36 % of total WFE spend. Adoption of gate‑all‑around transistors and backside power‑delivery technologies each adds roughly $1 billion of SAM for every 100,000 wafer starts.
The firm’s AI data‑center capital‑expenditure model now links $9 billion to $10 billion of WFE spending for every $100 billion of AI data‑center capex, up from a prior $8 billion linkage. Advanced packaging revenue is growing at more than 70 % year‑over‑year, driven by both foundry and logic customers.
Lam’s Aether dry‑resist program, originally scoped as a $1.5 billion five‑year opportunity, is expected to exceed that target. The CSPG service business posted nearly $2.5 billion in revenue for a third consecutive record quarter. The company also identified a $40 billion NAND‑upgrade opportunity through calendar 2027, even as raw wafer starts are projected to fall about 20 % from peak capacity by year‑end.
Operationally, clean‑room capacity remains the primary bottleneck for industry spending, with constraints expected to linger through 2026 and ease only gradually in 2027. Lam anticipates eight to ten new tier‑1 fabs becoming operational by the end of 2027. A second manufacturing facility in Malaysia is slated to open as a replica of the existing plant, supporting footprint densification and supplier coordination.
Product updates included strong performance of the Akara etch tool in high‑aspect‑ratio logic applications, continued demand for Vantex, ALTUS Halo and Reliant tools, and accelerated adoption of Dextro cobots and equipment‑intelligence across eight tool types for predictive maintenance.
At the time of the conference, Lam Research shares were down 4.64 % at $301.19, with a price‑to‑earnings multiple of 54.5. The company expects clean‑room availability to improve modestly in 2027, which should support the higher‑margin growth trajectory outlined above.
