Lam Research warns of shortages, sending chip stocks into a Thursday rout
Clean-room space and parts are running short: equipment maker Lam Research reins in its outlook. The US semiconductor index fell 6.7%, with all 30 members lower.
Symbolic image · Photo: Rob Bulmahn / Wikimedia Commons, CC BY 2.0 (cropped and resized)
US chip-equipment maker Lam Research triggered a sell-off in semiconductor stocks with a warning about supply bottlenecks. Its results were strong: revenue in the September quarter rose 54% to $8.22 billion, the company said, and its operating margin hit a record 40.2%. For the December quarter, Lam forecast $8.6 billion, plus or minus $400 million. But Chief Financial Officer Doug Bettinger said the outlook would have been higher without "near-term supply chain constraints", and some shipments could slip into the March quarter.
Chief Executive Tim Archer expects a lack of clean-room space and scarce components to hold back chipmakers and equipment suppliers into 2027. At the same time, Lam expects spending on chipmaking equipment to exceed $200 billion in 2027. China's share of revenue rose to 35% in the quarter from 26% in the June quarter.
The warning weighed heavily on markets on Thursday: Lam shares fell 11.8% and the Philadelphia Semiconductor Index dropped 6.7%, with all 30 members closing lower. AMD and Marvell each lost more than 8%, Nvidia 4.4%. Tokyo Electron, SK Hynix and Infineon also fell sharply. The Nasdaq Composite closed 2.6% lower.