Lam Research Enters Panel-Level Packaging: Is This a Growth Catalyst?

LRCX expands into PLP as larger AI chips drive demand, targeting a fast-growing advanced-packaging opportunity.

Anirudha Bhagat

3 min read

Lam Research Corporation LRCX is expanding its opportunity in advanced packaging as artificial intelligence (AI) chips become larger and more complex. The company seems to be now focusing on the Panel-Level Packaging (“PLP”) method. In this connection, it established a Panel-Level Packaging Center of Excellence in Salzburg, Austria, in May 2026 to accelerate research, customer qualification and production readiness.

PLP is a semiconductor packaging method in which multiple chips are assembled on a large, flat panel rather than individual circular wafers. This approach allows manufacturers to process more chips at once, potentially reducing production costs and improving efficiency.

The move is strategically important because future AI systems are expected to use more chiplets, high-bandwidth memory (HBM) stacks and larger packages. Lam Research expects advanced-packaging revenues to grow more than 70% year over year in calendar year 2026, providing a potentially meaningful new growth driver.

PLP could also expand Lam Research’s served market. The company has already shipped 510x515-millimeter panel systems to development programs in multiple regions and plans to ship its first 310x310-millimeter panel tool this year. These tools are designed to address the manufacturing challenges created by larger AI packages.

The opportunity comes at an attractive time. Lam Research generated record fourth-quarter fiscal 2026 revenues of $6.72 billion, up 30% year over year and 15% sequentially. Non-GAAP earnings per share (EPS) jumped nearly 37% year over year and 24% sequentially to $1.82. Management expects 2026 wafer fabrication equipment spending to reach the low-$150 billion range, which bodes well for the company.

PLP is more than a niche initiative. If AI package sizes continue expanding, this technology could widen Lam Research’s market opportunity and support sustained growth beyond traditional wafer-fab equipment. The Zacks Consensus Estimate for fiscal 2027 revenues is pegged at $33.9 billion, indicating a year-over-year increase of approximately 46%.

Can Rivals Challenge Lam Research in Advanced Packaging?

Lam Research is not alone in targeting the fast-growing advanced-packaging market. Applied Materials, Inc. AMAT is expanding its packaging portfolio as AI chips require more complex integration. Applied Materials expects its advanced-packaging revenues to grow more than 50% in calendar year 2026, making it a significant competitor to LRCX’s push into panel-level packaging. In the last reported financial results for the second quarter of fiscal 2026, Applied Materials’ revenues increased 11.4% year over year to $7.91 billion, while non-GAAP EPS rose 19.7% to $2.86.

KLA Corporation KLAC is another strong competitor, particularly in inspection and process control for advanced packaging. KLAC expects advanced-packaging revenues to be between $1 billion and $1.1 billion in 2026, up from approximately $635 million in 2025. Its packaging portfolio covers process control for wafers, panels and components, giving it exposure to the same shift toward larger and more complex packages. In the last reported financial results for the fourth quarter of fiscal 2026, KLAC’s revenues increased 15.2% year over year to $3.66 billion, while non-GAAP EPS jumped 11.7% to $1.05.

The competitive landscape is strengthening as AI drives greater use of chiplets, HBM and larger packages. However, Lam’s focus on panel-level processing could differentiate it, particularly as AI packages become too large for traditional wafer-based approaches.

LRCX’s Share Price Performance, Valuation and Estimates

Shares of Lam Research have surged 79% year to date compared with the Zacks Electronics – Semiconductors industry’s rise of 32.8%.

Lam Research YTD Price Return Performance

Image Source: Zacks Investment Research

From a valuation standpoint, Lam Research trades at a forward price-to-earnings ratio of 32.32, significantly higher than the industry’s average of 14.54.

Lam Research Forward 12-Month P/E Ratio

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for Lam Research’s fiscal 2027 and 2028 earnings implies a year-over-year increase of approximately 59% and 23%, respectively. Estimates for fiscal 2027 have been revised upward over the past 30 days, while estimates for fiscal 2028 have been raised over the past seven days.

Image Source: Zacks Investment Research

Lam Research currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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