Third-Party Parts Makers: Rivals for the AnnuityNarrow moat

Lam Research (LRCX) — moat facet

Third-party parts makers never bid for a Lam tool, but they compete for the spares that make every tool pay twice.

The competitor that never bids for a new tool is the one that sells the parts for it. The 10-K says Lam must serve its installed base "in the presence of competition from third-party spare parts providers"1. A fab that owns a Lam chamber can buy consumable parts from someone else.

Customer support growth less systems growth (points)-5.2FY2021+5.5FY2022+19.5FY2023+5.5FY2024-12.7FY2025-9.3FY2026Calculated from Lam Research Forms 10-K, revenue by type
Support outgrew tools from FY2022 to FY2024, not since.

This competitor is aimed at the most attractive part of Lam's business. Customer support-related revenue, which includes spares, was $8,347.2 million in fiscal 20262, and its growth is what makes each installed chamber pay twice.

The pressure has a local form in China, where the 10-K expects more competition from domestic "equipment and spare parts manufacturers"3. It also rises when chipmakers cut costs, because running cost is where third-party parts compete.

Lam's defence is that its parts are designed with the chamber and backed by fleet services, upgrades and process knowledge that an outside supplier cannot copy. Its spares product line focuses on running cost optimisation and product life extension4, which is the ground third parties attack.

Lam's answer includes selling the customer what a parts maker cannot: running cost optimisation programmes and product life extension from the spares line5, and upgrades that carry new technology into old chambers6. The parts makers compete on price for a part; Lam competes on the performance of the fleet.

The evidence would be in growth rates. Customer support grew 20.2% in fiscal 2026 against 29.5% for systems7; if the gap persists into a year when new-tool sales slow, the parts makers are taking share of the fleet.

Moat trajectory: Holding steady

Support growing, but slower than systems in FY2025-FY2026.

The number that tests this moat
Moat Explorer calc
Customer support growth less systems growth, full year
-9.3 points (FY2026: +20.2% vs +29.5%)

Whether the service business keeps pace with the fleet; a persistent negative gap in a slow year would point to parts makers taking share.

How it's calculated: Customer support-related revenue growth minus systems revenue growth, from Lam's Form 10-K FY2026 MD&A.
Source: Moat Explorer calculation from Lam Research filings ↗
References
  1. ReportedThe 10-K says Lam must serve its installed base "in the presence of competition from third-party spare parts providers".
    Lam Research Form 10-K for fiscal 2026 (year ended 28 June 2026) - Item 1 business: competition and intellectual property. — FY2026 · publ. 7 August 2026 · source ↗
  2. ReportedCustomer support-related revenue, which includes spares, was $8,347.2 million in fiscal 2026, and its growth is what makes each installed chamber pay twice.
    Lam Research Form 10-K for fiscal 2026 (year ended 28 June 2026) - Item 7 MD&A and revenue notes: revenue by type, region and end market, and margins. — FY2026 · publ. 7 August 2026 · source ↗
  3. ReportedThe pressure has a local form in China, where the 10-K expects more competition from domestic "equipment and spare parts manufacturers".
    Lam Research Form 10-K for fiscal 2026 (year ended 28 June 2026) - Item 1 business: competition and intellectual property. — FY2026 · publ. 7 August 2026 · source ↗
  4. ReportedIts spares product line focuses on running cost optimisation and product life extension, which is the ground third parties attack.
    Lam Research Form 10-K for fiscal 2026 (year ended 28 June 2026) - Item 1 business: products, strategy, competitors, customers and employees. — FY2026 · publ. 7 August 2026 · source ↗
  5. ReportedLam's answer includes selling the customer what a parts maker cannot: running cost optimisation programmes and product life extension from the spares line, and upgrades that carry new technology into old chambers.
    Lam Research Form 10-K for fiscal 2026 (year ended 28 June 2026) - Item 1 business: products, strategy, competitors, customers and employees. — FY2026 · publ. 7 August 2026 · source ↗
  6. ReportedLam's answer includes selling the customer what a parts maker cannot: running cost optimisation programmes and product life extension from the spares line, and upgrades that carry new technology into old chambers.
    Lam Research Form 10-K for fiscal 2026 (year ended 28 June 2026) - Item 1 business: products, strategy, competitors, customers and employees. — FY2026 · publ. 7 August 2026 · source ↗
  7. ReportedCustomer support grew 20.2% in fiscal 2026 against 29.5% for systems; if the gap persists into a year when new-tool sales slow, the parts makers are taking share of the fleet.
    Lam Research Form 10-K for fiscal 2026 (year ended 28 June 2026) - Item 7 MD&A and revenue notes: revenue by type, region and end market, and margins. — FY2026 · publ. 7 August 2026 · source ↗
Sources
Generated September 25, 2026