EBIT = earnings before interest and taxes. That could be due to both its smaller size and its high exposure to memory products, which have recently been booming even more than the semiconductor industry as a whole.ĪMAT EBIT Margin (TTM) data by YCharts. As you can see, Lam has posted slightly better growth during the recent period. Lam and Applied Materials have both been posting pretty stellar numbers during this current semiconductor boom. In contrast, Lam Research had four 10% or more customers, so Applied Materials is more diversified by individual customers as well. In addition, Applied Materials only had two customers that accounted for more than 10% of its sales in 2017. While it's likely that an economic downturn could take down all four of these categories, Applied Materials' customers are more evenly dispersed, so it has a slight advantage here. The process is repeated over and over again across a variety of materials and shapes until a complex circuit is completed.ĭata sources: Lam Research and Applied Materials company filings.Īs you can see, Applied Materials' end markets are more evenly dispersed among non-volatile memory (NVM), dynamic random access memory (DRAM), semiconductor foundry, and logic manufacturers, while Lam is mostly exposed to NVM and DRAM memory markets.

Etching machines then remove portions of the material from the wafer, leaving the deposit in the shape of the chip design. Deposition is when a machine 'deposits' a material on a silicon wafer - whether copper, tungsten, or another substance. While Lam and Applied Materials don't sell the exact same products, there's a large product overlap between the two in the deposition and etching equipment markets.

So which of these two companies is the better buy today? companies Lam Research ( LRCX 4.24%) and Applied Materials ( AMAT 3.67%). Like the semiconductor and memory industries, the semiconductor equipment industry has consolidated, to a handful of key global players. One way to play this trend is semiconductor equipment stocks, which sell the 'picks and shovels' to chip manufacturers worldwide. As the world becomes more technological, demand for semiconductors and memory - the building blocks of all our ultracool gadgets - is likely to soar.

Compare two stocks nvda lrcx