What is Lam Research’s (LRCX) Economic Moat, and is it Widening or Narrowing?

What happened: Lam Research (NASDAQ:LRCX) closed at $347.49 on October 2, up 132.98% over twelve months. The article examines the company's economic moat, which rests on high switching costs for chipmakers. Key numbers: Close $347.49 on October 2. Twelve month gain 132.98%. Operating margins 37.39%. Net profit 31.27% of revenue. Why it matters: The moat widens as chips are stacked with more layers, each needing another etch and deposition step. It narrows on export controls written by governments, which can shrink the moat overnight, and customer concentration adds to that risk.

Lam Research (NASDAQ:LRCX) closed at $347.49 on October 2, up 132.98% over twelve months. The article examines the company's economic moat, which rests on high switching costs for chipmakers.

The moat widens as chips are stacked with more layers, each needing another etch and deposition step. It narrows on export controls written by governments, which can shrink the moat overnight, and customer concentration adds to that risk.