Lam Research is a top-2 supplier in thin film deposition (CVD, ALD) and the leading provider of wet clean equipment. Deposition revenue (~$7.2B in CY2025) represents roughly 35% of total revenue and is the second-largest segment. Advanced packaging revenue exceeded $1B in CY2025 and is expected to grow 40%+ in CY2026, driven by 2.5D/3D packaging for AI chips that requires multiple deposition layers for redistribution and bonding. ALD (atomic layer deposition) is becoming critical for gate-all-around transistors at sub-3nm nodes, where atomic-precision film thickness control is essential. Applied Materials is the primary competitor in CVD, while Lam competes strongly in selective deposition and clean technologies.
Advanced packaging revenue exceeded $1B in CY2025 and is expected to grow 40%+ in CY2026, driven by 2.5D/3D packaging for AI chips
Advanced packaging (2.5D/3D) is the fastest-growing application for Lam's deposition tools. AI chips from NVIDIA, AMD, and custom ASICs use chiplet architectures with CoWoS-like interposers that require multiple CVD and ALD layers. Lam's advanced packaging revenue exceeded $1B in CY2025 -- growing from a much smaller base -- and management expects 40%+ growth in CY2026. This application is relatively new for the equipment industry and sits at the intersection of Lam's etch and deposition capabilities, giving Lam a potential technology bundling advantage. The TAM for advanced packaging equipment could reach $5-8B by 2028 as chiplet architectures proliferate.
Lam's advanced packaging revenue exceeded $1B in CY2025 and is expected to grow 40%+ in CY2026
ALD deposits films one atomic layer at a time, providing the precision required for sub-3nm gate-all-around transistors and advanced memory structures. As device dimensions shrink, ALD replaces conventional CVD for critical films where thickness uniformity must be controlled at the angstrom level. Lam competes with ASM International and Applied Materials in ALD. The transition to GAA creates a meaningful step-up in ALD content per wafer. The ALD market is expected to grow faster than the overall deposition market as more process steps require atomic-level precision.
ALD market is growing faster than overall deposition, driven by sub-3nm GAA adoption that requires atomic-precision film control for gate dielectrics and work function metals