Lam Research Expects Packaging Growth of 50%: Is It a Hidden Catalyst? - The Globe and Mail

Lam Research's advanced packaging business is emerging as a key growth driver amid the transformative impact of artificial intelligence (AI) on chip design. Advanced packaging is essential for connect... Read original →

Advanced packaging is transitioning from a peripheral process to the linchpin of AI chip performance. Lam Research’s etch and deposition tools are strategically positioned to capture surging demand driven by HBM and chiplet architectures requiring TSVs and hybrid bonding. This shift isn’t just boosting equipment orders—it’s rebalancing the semiconductor value chain, potentially doubling packaging’s capex share from under 10% to over 20%. Yet geopolitical friction looms: U.S. export controls now target advanced packaging tools, pressuring customers in Taiwan, China and mainland China to accelerate domestic substitution, raising Lam’s compliance overhead. Applied Materials is countering via panel-level packaging acquisitions, while KLA leverages inspection solutions—setting up a fierce three-way battle through 2026–2027. Without converting technical leadership into pricing power, Lam’s >50x P/E appears unsustainable. Within 24 months, advanced packaging will become a mandatory gatekeeper for AI chip production, transforming equipment vendors from process enablers into architecture co-definers.