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By Priyanka G
(Reuters) -Chip-making equipment supplier Lam Research (NASDAQ:LRCX) beat Wall Street expectations for third-quarter revenue on Wednesday, fueled by robust demand for advanced AI chips, sending the company’s shares up 4.5% in extended trading.
The increased appetite for high-performance AI chips and processors — essential for powering AI workloads — is prompting major chip manufacturers like Taiwan Semiconductor Manufacturing Co, one of Lam’s biggest customers, to ramp up orders. This surge is benefiting equipment suppliers such as Lam as well.
Lam posted revenue of $4.72 billion for the three months ended March 30, beating analysts’ estimate of $4.65 billion, according to data compiled by LSEG.
Kinngai Chan, senior analyst at Summit Insights Group, said the third-quarter "outperformance was due to stronger shipments to Taiwan, while shipments into China remain robust."
Lam derived 31% revenue from China and 24% from Taiwan in the reported quarter.
The strong results have come despite ongoing concerns related to U.S. export controls and tariffs, which have posed challenges for the semiconductor industry.
"Our outlook remains strong even as we address near-term tariff-related uncertainty" said Lam CEO Tim Archer.
For the fourth quarter, the company expects revenue of $5 billion, plus or minus $300 million, compared with analysts’ estimate of $4.59 billion.
In February, Lam’s CFO Douglas Bettinger said the company expects revenue between $25 billion and $28 billion by 2028, a sharp increase from $16.2 billion in 2024.
Lam develops tools essential for semiconductor manufacturing. Its products are primarily used in a wide range of wafer processing and wiring of semiconductor devices.
The company posted an adjusted profit of $1.04 per share, beating analysts’ estimate of $1.01.
The company’s systems revenue which includes sales of new leading-edge equipment in deposition, etch, clean and other wafer fabrication markets generated $3.04 billion in the third quarter.